In April, GMG, a global well-being company in retailing, distributing and manufacturing a portfolio of leading international and home-grown brands across sport, food and health sectors, has acquired Nike-only stores in Singapore and Malaysia from the sports retailing arm of SUTL Corporation.
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Following the completion of this acquisition, Retail in Asia had the pleasure to interview Mohammad A. Baker, GMG’s Deputy Chairman and CEO. Together we discussed what this acquisition means for GMG, its ambition in the sports retail space in Asia and the role of physical stores in an omni-channel retail experience.
RiA: GMG has a strong presence in the Middle East. It entered Southeast Asia in 2020 through the acquisition of Royal Sporting House, a leading multi-sports retailer in Singapore. Through the recent acquisition of Nike stores in Singapore and Malaysia you are solidifying your position in Asia. Why is Asia a strategic market for GMG? Can you elaborate on your expansion plans in the region?
Baker: For over forty years, GMG has been relentlessly working to be a trusted partner for growth and innovation across global markets. From humble beginnings in Dubai, our ambition and vision was to become global. This vision became a reality when we entered the Asian market in 2020. We will continue to build on our efforts to further grow our business and serve our customers across all our operational regions.
In line with this, we redesigned our business to reiterate our mission to promote healthier and more active lifestyles through four main business verticals – GMG Sports, GMG Food, GMG Health, and GMG Consumer Goods. Across all of these businesses, we are daring ourselves and others to develop better products and experiences that change lives.
GMG sees potential in every market we operate in. A renewed focus on personal well-being is a trend we are seeing across all geographies. At the end of 2020, when business sentiment was low and markets were down, we saw an opportunity and took a bold step by entering Asia through the acquisition of the popular Royal Sporting House brand. Then and now, Asia exemplifies immense potential and growth opportunities for GMG. Asian consumers offer a $10 trillion growth opportunity, according to McKinsey & Co. This is why we’re excited about expanding our presence in Singapore and Malaysia through the acquisition of Nike stores from SUTL.
Our investments in Asia allow us to reach hundreds of millions of potential new consumers and leverage our experience and expertise of over four decades as customer experience pioneers and customer satisfaction specialists. Our analysis, and that of industry experts, suggests that Asia-Pacific is propelling the global retail industry forward. It generates a substantial portion of all global retail growth while also offering the world a window into the future of retail.
In addition to a strong physical retail presence in Asia, for example, we have significantly strengthened our in-house digital expertise over recent years, and continue to do so. Currently, we offer a robust eCommerce service for Royal Sporting House in Singapore, and in the future, we have plans to extend this offering to Malaysia by 2022 and the rest of the SEA market by 2023.
To keep up with the momentum, we saw another great opportunity to solidify our position further in Malaysia and Singapore with the recent SUTL acquisition.
RiA: Let’s dive a bit deeper into your online presence in SEA. You have a robust eCommerce service for Royal Sporting House in Singapore, but GMG aims to extend this offering to Malaysia by the end of the year and the rest of the SEA market by 2023. Can you tell us more about it?
Baker: Digitalization has long been part of our business strategy. However, we greatly accelerated our digital transformation in recent years.
Undoubtedly, the retail sector has undergone massive transformation recently. With the onset of the fourth industrial revolution, there are significant societal shifts and consumer habit changes. Revenue from eCommerce in Asia is projected to touch $2.09 trillion this year. We are also noticing an uptick in livestream eCommerce in markets like China.
In line with the rapid changes and consumer demands, we deployed an expanded omnichannel ecosystem at GMG Sports in the Middle East to enhance consumer accessibility to leading sports brands through digital and mobile-commerce platforms. We have also adopted a cloud-first approach and started leveraging advanced data-intelligence solutions, including big data analytics, to drive innovations in product development.
Such investments have not only enabled us to serve the consumer better, but also to streamline processes, reduce costs, and empower our local decision-makers.
As we expand our presence in Asia, we will focus on bringing this experience and expertise to this region while paying close attention to the demands of local consumers.
RiA: GMG has four business verticals: GMG Sports, GMG Food, GMG Health, and GMG Consumer Goods. Can you walk us through your ambition in the sports retail space and more specifically in Asia?
Baker: GMG is fundamentally a growth company with long-term global ambitions. This ambition is reflected by our ongoing journey to expand our portfolio, as well as aim to double our global workforce by 2025 across our markets. The acquisition of Nike-only outlets from SUTL in Singapore and Malaysia highlights our continued commitment to growing our sports division, which has expanded from a single retail store in Dubai to over 550 stores in 57 cities across the Middle East, North Africa, and Asia. With a diverse portfolio of own concept brands as well as international powerhouse brands such as Nike, and a commitment to empowering even more people to embrace active and healthy lifestyles, GMG will continue to seek growth opportunities that will inspire others to win in all that they do.
RiA: You now operate in both the Middle East and Asia. Can you tell us more about the intricacies of these two markets both in terms of consumers and brand preferences?
Baker: Across all the markets we operate, we recognized that communities and governments around the world are striving to progress sustainable development goals that are often anchored in personal well-being. Additionally, our industries are experiencing significant disruption, whether through climate change, rapid digitalization, or the COVID-19 pandemic.
The wellness market—considered a subset of the wider “well-being” concept—has expanded considerably, with McKinsey & Company estimating the value of the global wellness market at over USD1.5 trillion. Consumers today are conscious of how a brand engages and provides value to them. The relationship is no longer transactional; they want to be actively involved with brands and be aware of their impact.
In the coming decade, Asia is poised to become the consumption engine of the world, likely to account for half of all global consumption growth, according to industry analysts. Similar to the Middle East, Asian consumers are increasingly adopting digital, thanks to the high smartphone penetration rates. Additionally, sustainability is now front-of-mind for global consumers. The most recent PwC’s Global Consumer Insights Pulse survey indicated that in the post-pandemic world, Middle Eastern consumers are prioritising sustainability, health and affordability.
RiA: Your partnership with Nike started in 1982 and you distribute their apparel, footwear and accessories in Saudi Arabia, UAE, Oman, Qatar, Bahrain and Kuwait . You are now extending your partnership to the SEA region. What are your plans for Nike in the region?
Baker: We are proud to work with leading global brands across our four key divisions. We strongly believe that investing in our partners’ success has been pivotal for our success and GMG has grown with them. We have continually innovated new ways to bring superior customer experiences to our partners and customers.
Our long-standing partnership with Nike is a testament to the value GMG delivers to its partners. GMG has a long history of partnership with Nike, signing an agreement in 1982 to bring Nike products to the UAE then distributing and retailing Nike products across the GCC region as the company expanded. In 2021, we acquired Royal Sporting House, an established sports retailer with Nike as one of its key brands. More recently, GMG acquired the rights to manage, distribute, and retail the Nike brand in Egypt and Iraq.
The acquisition of Nike-only retail outlets in Singapore and Malaysia from SUTL is a natural progression of our long-standing relationship with Nike, further strengthening its position in sports retail both in Asia and globally. This gives us an opportunity to solidify our position in Asia, while enabling us to further cement our partnership with Nike and expand our footprint in Asia.
For over forty years, GMG has been a trusted partner for over 120 international brands like Nike. These brands are proud to partner with us as they know that it is not merely a business-like, transactional relationship for us – we constantly dare ourselves to achieve the impossible.
RiA: Though omnichannel is a buzzword, we also hear a lot about hyperphysical stores and the importance of customer experience in-store. What’s the role of physical stores in an omni-channel retail experience and how does that translate in the stores you own and the ones you operate for your partners?
Baker: The pandemic resulted in a huge uptick in eCommerce shopping but as the world recovers from the pandemic given the increasing vaccination rates, we’re starting to notice a new format of retail emerging. The future of retail will be hybrid and having a robust omnichannel experience will be paramount.
There is an increasing desire amongst consumers for an omnichannel experience – blurring the lines between where online and physical shopping experiences start and end. Most importantly, retailers need to provide a coherent, consistent and personalized experience across all channels.
eCommerce will continue to boom, even in the post-pandemic work but brick-and-mortar stores are here to stay. Albeit retail stores need to be able to offer an unparalleled customer experience that blends with digital services.
Customers need to be confident that what they want to buy is available nearby. If they see a pair of trainers they like online, they want to go to a store and try them on before deciding to buy. This means that brands such as Nike, which have a strong online presence as well as physical stores, remain relevant by providing their customers with the integrated retail experience they are looking for.
RiA: Many brands and retailers have been embracing the Metaverse by releasing NFTs or launching virtual stores and capsule collections. What’s your take on the Metaverse for retailers? Do you already have or do you plan to have a presence in the Metaverse?
Baker: The next few years will see a lot of conversations around non-fungible token (NFTs), the metaverse, social commerce and live streaming. With a more sustainability-conscious consumer on the rise, hybrid retail will continue to be the preferred mode of shopping.
Offering an immersive customer experience is key for any retailer, whether it is leveraging technology like AR, VR, blockchain, or the metaverse. Responding to changing consumer needs with agility and promptness will set a retailer apart from its competitors.
Another important area where we will see a lot of innovation and progress is creating a zero-friction retail experience for consumers – whether it is reducing clicks, providing detailed and accurate product information, contactless retail experiences, checkout-free stores, ultra-fast and autonomous delivery, AI- and ML- driven loyalty programs or more.
At GMG, we continue to have our finger on the pulse of the industry, and we will respond to consumer needs accordingly.
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RiA: What’s next for GMG?
Baker: Keep going, growing and evolving! We will continue to build on our solid forty-year legacy as a consumer-centric trusted partner for growth and innovation. Our partners are proud to work with us because they know that while our accomplishments speak for themselves, we will never be complacent about them.
As I mentioned, one of our values is to keep evolving. We must constantly challenge ourselves to meet ever-changing consumer demands and beyond. To do so, we must be the change we wish to see, and inspire our partners and communities to do the same. Along the way, I believe that we will always consider ourselves as a large start-up coming together as one family, digging in together to win no matter how large we become. It follows that we must care passionately about our people and the communities we serve—putting our people and our consumers first.