Abu Dhabi’s LuLu Group will spend Dh1 billion in the next three years on its ecommerce and logistics capabilities and be a Top 3 online retailer in the Middle East.
“In the last three years, we have moved from being a brick-and-mortar retailer to having a presence in online shopping as well,” said Yusuff Ali M.A., Chairman. “In the next three years, we will build on what’s been achieved so far and be among the Top 3 ecommerce names in the UAE and Gulf. We can do it.”
Spending big
Currently, online sales form around 5 per cent of LuLu’s overall sales, but Yusuff Ali wants to push that to 15-20 per cent by end 2024. The Chairman did not divulge current sales levels, but the Group had reported a turnover of $7 billion plus in 2019.
The Dh1 billion spend will go into ‘fulfilment centres’ – which are critical to handling the stock needs – as well as in buying a fleet required for last-mile delivery. “We own and operate the entire fleet rather than subcontract,” said Yusuff Ali. “We need to be a true omni-channel company and we will own what we use.”
What will change?
As much as anything else, mindsets too will change at the Abu Dhabi headquartered group. In the online push, LuLu will bring in smaller online focused vendors as well as product categories that are not part of their stores.
“What usually all the retailer do is morph everything that worked for physical retail space onto the ecommerce,” said Yusuff Ali. “That’s not how it should be – retail will have its own focus within the Group from now.”
Speed up change
While noon and Amazon battle it out as pure-play e-marketplaces, the region’s leading retailers such as LuLu, Majid Al Futtaim and Landmark are bulking up their online channels. The year of the pandemic speeded up investments in digital channels, the focus on contactless payments, and any retail trend that can help push sales – and grab more market share (online and offline).
It is a ‘Super Friday’
Part of that strategy shift is already in evidence at the ongoing ‘LuLu Super Friday’ promotions. “A much wider range of products are available, and these online promotions come with their special offers too,” said V. Nandakumar, Chief Commercial Officer.
“We need to bring in more vendors, even those who do not typically sell through our stores. There are new demographics, new consumer tastes and wants that need to be fulfilled. We are open to meeting all possible consumer wants through LuLu Online.”
