Frankly Speaking: ‘The future of retail is both physical and digital – phygital’, says MAF CEO Alain Bejjani

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Updated 29 November 2021

Frankly Speaking: ‘The future of retail is both physical and digital – phygital’, says MAF CEO Alain Bejjani

  • Head of conglomerate appears on Frankly Speaking, the series of video interviews with business people and policymakers
  • Bejjani gives his opinion on the economies of Saudi Arabia and UAE, whose resilience is being tested by the pandemic

DUBAI: Business in Saudi Arabia and the UAE is “buzzing,” Alain Bejjani, chief executive officer of the Majid Al Futtaim diversified conglomerate, told Arab News, even as the resilience of their economies is being tested by the pandemic’s unexpected twists and turns.

He gave his opinion on the state of recovery from last year’s coronavirus lockdowns on Frankly Speaking, the series of video interviews with leading business people and policymakers in the Middle East and the world.

“Saudi Arabia (has shown) great resilience during the pandemic, but actually Saudi Arabian measures (to halt the spread of the virus) were quite different from the ones that you have seen in the other markets. I’ve been there in the past few months more than three times and you (can) see that it’s buzzing. It’s coming back,” Bejjani said.

“The UAE had remarkable resilience in 2020 and now is buzzing across the board. We’ve had an excellent second half of the year, especially the third quarter and the fourth quarter that we are in, and basically things are off to a very good start in 2022.”

Business in Egypt is also on a recovery path, he said.

Bejjani has been at the helm of MAF since 2015, consolidating the group’s position as one of the leading retail, hospitality and leisure groups in the Middle East. MAF is well known by consumers throughout the region for its Carrefour supermarkets, its gigantic shopping malls and its Vox Cinemas chain.




Alain Bejjani, CEO of the Majid Al Futtaim group

In the course of a wide-ranging discussion, Bejjani also spoke about the way the pandemic had changed MAF, his plans to give cinema a big boost in the Middle East, and the sustainability of MAF’s businesses, which include a ski-slope in Dubai and another one — set to be the biggest in the world — in the under-construction Mall of Saudi in Riyadh.

On the pace of the post-pandemic economic recovery, Bejjani explained that there could be a financial “hit” to MAF this year, because consumption patterns had changed from online back to in-person retailing.

“So, 2021 was difficult and not 2020. Last year was a difficult year to be able to fulfill and to be able to serve the customers in the safety of their homes, and navigate through the very strict restrictions that we had to deal with because of the pandemic.

“But in 2021 when we had less restrictions or no restrictions, people could go back to stores, the actual consumption changed because people were consuming less. They were not at home anymore as much as they were,” he said.

He said that a full recovery across the board might not come until 2024, adding: “We are in multi-industries and some industries have recovered while others have not yet recovered. So, when you look at our overall results, they are affected by the ones that haven’t recovered yet.”


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How Majid Al Futtaim is getting to grips with the coronavirus ‘tsunami’


Elaborating on the topic, Bejjani said: “For example, the cinema business and the L&E (leisure and entertainment) business — this is a business that’s recovering slower than others and is now actually affected by supply-chain issues.

“When you look at the cinema business, this is a business that was really affected in 2021 not only by the limitations on occupancy, but also by the fact of the unavailability of movies because of production delays and all the supply-chain issues that were triggered by the pandemic.”

In Saudi Arabia, where MAF has been expanding rapidly over the past five years, growth was being spurred by the reform strategy of the Vision 2030 plan to diversify the economy, according to Bejjani.

“What’s happened in Saudi Arabia in the past five years is a blessing. Everyone was dreaming to have Saudi Arabia open up; to have Saudi Arabia come back; to actually become a vibrant and even more vibrant economy, a more inclusive economy; to get women back into the workforce and also into a role in society; to get entertainment back into the Kingdom,” he said.

MAF’s most prestigious project to date in the Kingdom is the Mall of Saudi, a $4.3 billion retail and leisure complex under construction in north Riyadh, due to open in 2025. Bejjani is confident that “mall culture” will overcome the challenges thrown up by the pandemic, but that the lockdowns will change the nature of the business in significant ways.




Frank Kane hosts Frankly Speaking: Watch more episodes.

“This is, of course, for us a very important, substantial investment and a very strategic project. We’re doing it because we really believe in the future of retail and we really believe that the future of retail is both physical and digital. There is this new word now that’s coined, it’s called ‘phygital,’ and we are seeing that more and more.

“Malls are not only spaces where you actually transact, where you actually shop for something. It’s a place where people come together. It’s a place where people meet. It’s a place where friends and family spend time and create great moments together. Of course they shop, dine or consume entertainment, but also build bonds. This is what malls’ new roles are,” he said.

The Mall of Saudi will be home to the biggest ski-slope and snow dome in the world. Some environmentalists have questioned the building of gigantic indoor snow-park facilities in the Middle East, especially as concerns grow about climate change.

But Bejjani is adamant that the new ski center in Riyadh will comply with the strictest environmental and energy regulations, like Ski Dubai in the UAE does. “There is a lot of misconception around indoor ski slopes,” he said.

“If you look at Mall of the Emirates’ Ski Dubai or the one that you’re going to be having in our Riyadh project, these are actually LEED (Leadership in Energy and Environmental Design) certified assets.

“It actually has been improving quite a lot. We’ve been putting a lot of technology and investment in order to make it as sustainable as possible. So, when you look at the actual slope, it is within a fridge that preserves heat and preserves cold, so minimizes the heat going out and preserves cold inside. And we have a lot of technology to make sure that we actually use the least electricity possible and generate and have the lowest possible carbon footprint.”


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Majid Al-Futtaim chief kicks off “humungous” Mall of Saudi project


One part of the business set for big growth is the Vox Cinemas chain, which pursued an aggressive roll-out of new venues after the ban on cinemas in Saudi Arabia was lifted in 2018, only to be shut later by the pandemic. Bejjani says he is confident Vox can win business back from the at-home streaming services like Netflix that did so well during the lockdowns.

“People love the experience. Cinema is an experience that you share with others and there is nothing like the magic of being in a theater and people laughing together and living those emotions together,” he said.

Consumers had “maxxed out” on Netflix during the lockdown phase, he added.

One challenge MAF is planning to confront head on is the lack of new content, and specifically regional content, in the Middle East movie industry. Shutdowns in Hollywood and Bollywood studios during the pandemic meant a shortage of new material for movie-goers.

“Saudi Arabia is a fantastic market for local content, whether it’s Arabic content, whether it’s Khaliji or Egyptian content, and this is where we need and we are driving a lot of effort to make sure that we enable that local content much more,” he said.

Vox is sponsoring the forthcoming Red Sea Film Festival as a way to demonstrate its commitment to creating a regional production and distribution network to raise the level of local content in cinema.

“We have a huge market with a lot of young and not-so-young cultural-product consumers that want local content,” Bejjani said. “This is how we can contribute to the rebirth of our civilization, and the rebirth of the cultural life in our part of the world.”


UK government to cut funding for BBC: Mail on Sunday report

Updated 16 January 2022

UK government to cut funding for BBC: Mail on Sunday report

  • Freezing license cost at its current £159 would provide some relief to consumers battling rising costs of living
  • But it would also be a large blow to the BBC’s finances as it tries to compete with privately funded news outlets

LONDON: Britain’s government will cut the BBC’s funding by ordering a two-year freeze on the fee that people pay to watch the broadcaster, the Mail on Sunday reported.
The future of the license-payer funded British Broadcasting Corporation is a perpetual topic of political debate, with Prime Minister Boris Johnson’s government most recently suggesting its funding needs to be reformed.
Set against an inflation rate expected to reach a 30-year high of 6 percent or more in April, freezing the license cost at its current 159 pounds ($217.40) would provide some relief to consumers battling sharply rising costs of living.
But it would also be a large blow to the BBC’s finances as it tries to compete with privately funded news outlets and the likes of Netflix and other entertainment streaming services funded by consumer subscriptions.
In November, the government launched negotiations to agree how much the TV license would cost, part of a five year funding settlement due to begin in April 2022.
The Digital, Media, Culture and Sport department declined to comment when asked about the Mail on Sunday report.
Culture secretary Nadine Dorries said that the license fee settlement would be the last such agreement and tweeted a link to the Mail on Sunday article.
“Time now to discuss and debate new ways of funding, supporting and selling great British content,” she said on Twitter.
The BBC declined to comment on Dorries’ tweet or the Mail on Sunday report.
The opposition Labour Party said the funding cut was politically motivated.
“The Prime Minister and the Culture Secretary seem hell-bent on attacking this great British institution because they don’t like its journalism,” said Lucy Powell, Labour lawmaker and culture policy chief.
The BBC’s news output is regularly criticized by UK political parties. Its coverage of Brexit issues — central to Johnson’s government — has long been seen as overly critical by supporters of leaving the European Union.
Last week, one Conservative lawmaker said BBC coverage relating to parties in Johnson’s Downing Street residence during coronavirus lockdowns amounted to a “coup attempt” against the prime minister.

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Sudan revokes license of Al Jazeera Mubasher citing unprofessional coverage

Al Jazeera has given prominent coverage to the demonstrations and late last year also aired an interview with Burhan. (File)
Updated 16 January 2022

Sudan revokes license of Al Jazeera Mubasher citing unprofessional coverage

  • Sudan has been gripped by political turmoil since top military leader General Abdel Fattah Al-Burhan launched a coup on October 25

KHARTOUM: Sudan has revoked the license of Al Jazeera Mubasher, part of the Qatar-based network, accusing it of “unprofessional” TV coverage of anti-coup protests, the channel said Sunday.
“The Sudanese authorities announce they revoked the accreditation of Al Jazeera Mubasher and barred its team from working in Sudan,” tweeted the news channel.
Sudan has been gripped by political turmoil since top military leader General Abdel Fattah Al-Burhan launched a coup on October 25.
The military power grab triggered mass protests by pro-democracy movements demanding civilian rule that has met with a deadly crackdown.
At least 64 protesters have been killed, according to pro-democracy medics, and a police officer has also lost his life.
Al Jazeera has given prominent coverage to the demonstrations and late last year also aired an interview with Burhan.
In November, days after the interview, it said that its Khartoum bureau chief Al-Musalami Al-Kabbashi had been arrested at his home.
Kabbashi was released three days later with no official charges announced against him.
The editor-in-chief of the armed forces newspaper Ibrahim Al-Hory later accused Kabbashi of publishing “false” information and of airing “old video footage... that instigated strife” in the country.
Burhan declared a state of emergency on October 25, ousted the government and detained the civilian leadership.
Prime Minister Abdulla Hamdok was placed under house arrest but later reinstated in a deal with the military.
Hamdok then resigned on January 2 warning that Sudan was at a dangerous crossroads threatening its very “survival.”
Burhan has insisted the military’s move “was not a coup” but a push to “rectify the course of the transition.”

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DirecTV drops Trump-friendly One America News

Subscription television service DirecTV has decided not to renew its contract with One America News Network (OAN), an ultra-conservative, conspiratorial US channel that backs former US president Donald Trump. (Drew Angerer/GETTY IMAGES NORTH AMERICA/AFP)
Updated 16 January 2022

DirecTV drops Trump-friendly One America News

  • The right-wing TV channel has been friendly to Donald Trump and widely criticized for spreading misinformation including the former president’s false claim that he won the 2020 election

BOSTON: DirecTV plans to drop One America News Network, significantly shrinking the reach of the right-wing TV channel friendly to Donald Trump and widely criticized for spreading misinformation including the former president’s false claim that he won the 2020 election.
The satellite television provider said Saturday that it has informed OAN’s owner, Herring Networks. Inc., that it will no longer carry its two channels when their contract expires. The other, AWA, is a lifestyle channel. The decision is believed to remove OAN from millions of homes.
“We informed Herring Networks that, following a routine internal review, we do not plan to enter into a new contract when our current agreement expires,” a DirecTV spokesman said in an emailed statement.
The spokesman would not say when the contract expires, but Bloomberg News, which first reported development on Friday, said it expires in early April.
San Diego-based Herring Networks did not immediately respond to an email seeking comment.
Bloomberg said DirecTV is OAN’s largest distributor. On its website, Herring says OAN is carried by Verizon FiOS and several smaller TV providers. It can also be streamed online. Major cable companies including Comcast and Charter do not carry OAN.
AT&T has a 70 percent stake in DirecTV, which has carried OAN since April 2017 after AT&T settled a lawsuit demanding it carry the channels. Herring Networks had claimed AT&T reneged on an agreement to carry OAN on DirecTV, which it acquired in 2015.
OAN became a darling of Trump during his presidency and has continued to report his claim that the 2020 presidential election was rigged against him – a claim directly contradicted by the facts and exhaustive reporting. It has carried Trump live in post-presidency appearances, its reporters declining to challenge his contrafactual claims.
Trump came to OAN’s defense at a rally Saturday night in Arizona, praising the network — “I love One America News,” he said — and threatening to call for a boycott of DirecTV’s parent company, AT&T.
“This is horrible,” Trump said. “This is a great network. These are great people. I watch it all the time and you really get the truth. And they want to cancel them now because of politics — for purely political reasons. It’s a disgrace what’s going on.”
He added, “But I don’t think that people are gonna stand for it” and, noting the company’s founders were in the crowd, said, “Maybe what we should do is not use AT&T.”
Dominion Voting Systems sued OAN and other right-wing broadcasters in August, claiming they damaged the election technology company’s business by trumpeting lies spread by Trump adherents that it was complicit in an election-rigging conspiracy.
DirecTV does not provide a breakdown of its subscribers, but AT&T reported that as of the second quarter of 2021 it had a total of 15.4 million paid premium TV subscribers including DirecTV, AT&T U-verse wireline video and the online service AT&T TV.
The paid TV market has been steadily shrinking as more people abandon it for streaming services.


US anti-trust suit says Google, Facebook chiefs approved ‘illegal’ market pact

Updated 15 January 2022

US anti-trust suit says Google, Facebook chiefs approved ‘illegal’ market pact

  • The antitrust suit is one of three engaging Google on different fronts
  • Suit says the online search colossus sought to oust competition by manipulating ad auctions

SAN FRANCISCO, US: Top bosses of Google and Facebook were directly involved in approving an allegedly illegal 2018 deal to cement their dominance of the online advertising market, US court documents revealed Friday.
The records, part of an anti-trust lawsuit by a coalition of US states targeting Google, make serious allegations against Big Tech giants long accused of holding monopolies.
According to the states’ accusations, the online search colossus sought to oust competition by manipulating ad auctions — the ultra-sophisticated system that determines which ads appear on web pages based on the anonymized profiles of Internet users.
The legal documents filed in a New York court clearly refer to Sundar Pichai, chief of Google’s parent firm Alphabet, as well as Facebook executive Sheryl Sandberg and CEO Mark Zuckerberg — even if their names were redacted.
“Google CEO Sundar Pichai also personally signed off on the terms of the deal,” the suit said.

Google CEO Sundar Pichai. (AP file photo)


The documents note that the economic terms were emailed to Facebook’s CEO and he was advised: “’We’re nearly ready to sign and need your approval to move forward.’“
Google did not respond to a request for comment Friday, but has adamantly denied manipulating the digital ad market.
It was the third time the suit was amended, and did not list Facebook or its parent company Meta as defendants.
“Meta’s non-exclusive bidding agreement with Google and the similar agreements we have with other bidding platforms, have helped to increase competition for ad placements,” a spokesperson said in reply to an AFP inquiry.
“These business relationships enable Meta to deliver more value to advertisers while fairly compensating publishers, resulting in better outcomes for all.”
Google referred to the agreement internally as “Jedi Blue,” the color being a reference to Facebook’s logo, according to the filing.
“No rational developer would choose to have its auctions rigged by the market’s two largest buyers,” the suit said.
“So, Google and Facebook swore themselves to secrecy about the terms of their agreement.”
The antitrust suit is one of three engaging Google on different fronts.
The US government filed its blockbuster lawsuit in October of last year, accusing Google of maintaining an “illegal monopoly” in online search and advertising.
The country’s biggest antitrust case in decades, it opens the door to a potential breakup of the Silicon Valley titan.
While Google ad revenue has continued to grow, its share of the booming US online ad market is ebbing under pressure from competitors such as Facebook, Amazon and others, according to eMarketer.
 


Netflix upping US, Canada prices with competition growing

Updated 15 January 2022

Netflix upping US, Canada prices with competition growing

  • The Los Gatos, California, company said Friday that prices are going up by $1 to $2, depending on the plan
  • The Canadian version is going up by the same amount in local currency, to $16.50 Canadian dollars

NEW YORK: Netflix is raising prices for its video streaming customers in the U.S. and Canada, less than a year and a half since its last price increase, as competition from other streaming services increases.
The Los Gatos, California, company said Friday that prices are going up by $1 to $2, depending on the plan. The “standard” plan that most people take is increasing by $1.50, to $15.50. The Canadian version is going up by the same amount in local currency, to $16.50 Canadian dollars.
Price increases are becoming more of a regular feature at Netflix, which is facing saturation in the U.S. market. Of Netflix's 213.5 million subscribers, some 74 million are in the U.S. and Canada. It got an influx of global subscribers early in the pandemic, but is investing in video games as it looks beyond movies and TV for growth.
In the U.S., Netflix's most expensive plan is increasing by $2, to $20; its basic plan is up $1, to $10. The plans vary based on variables like the number of screens users can watch Netflix on at the same time and the number of phones or tablets that can have downloads. The company still mails out DVDs in a service that requires a separate plan.
The price increase is effective as of Friday. Netflix will tell customers by email and inside the Netflix app before the new price is applied to them.
Raising prices carries the risk that people will cancel. Netflix remains the dominant U.S. streaming service, but others, such as HBO Max and Disney+, have increased in popularity.
Netflix shares gained in late trading after news of the price increase came out. The stock closed up $6.49, or 1.3%, to $525.69. The company reports its fourth-quarter financial results Thursday.

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