Opportunity Analysis Of UAE Apparel Market As A Business Destination

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Question :

College: Abu Dhabi University college
INE300 Foundamentals of innovation and entrepreneurship


You will prepare an "Opportunity analysis project". this is different from a business plan: you are not defending/ selling an idea for a new business, but you propose an idea for a start up and then investigate whether this is really a good opportunity or not. you will demonstrate that you known what aspects of a potential start up are important to evaluate very critically by reporting on the critical evaluation that you have done of your own idea.

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Answer :


UAE is considered to be one of the most profitable and commercial countries and it has favorable economy for starting a business. This is a significant business hub among the Arab countries and the current economy of the country has facilitated the path of smaller businesses along with the start up business units of different entrepreneurs. UAE has its own significant place in the global apparel industry and it is one of the most popular shopping destinations of the world. Apparel industry is considered to be one of the lucrative arenas to invest in UAE and this report intends to analyze the opportunities of opening a boutique store in UAE.

Concept and vision

A boutique shop is considered a specialty retail store that provides the customers with customized clothing and along with that sells stylish clothing or apparel which is targeted towards a niche market. Boutique stores are gaining popularity in all over the world and with appropriate market analysis and target customers, it is possible to run a boutique successfully in UAE (Sharpe, 2016). A fashion boutique can be innovative for the locals of this country as there is a wide scope of developing a boutique store in this country. 

With population growth and development of the tourism industry in the country millions of  tourists are venturing several cities of this country and considering Paris and its history as the Fashion Capital of the world, it is evident that the increasing number of shoppers that venture shops of UAE on a regular basis can easily serve the purpose of the target customers of the fashion boutique store. Opening a boutique store is an innovative idea as there are lack of creativity in the clothes available for men, women and children in the most popular malls of this country. It is true that the market value of the apparels are high and also they are based on the contemporary trends of the fashion industry (Hammad, 2015). However it lacks the customized touch and personalization. Available customized clothes are expensive and can not be afforded by most of the people. Therefore, the idea of opening a boutique that offers customized service at a right price can prove to be profitable in long run.

Market analysis

Before investing in the apparel industry it is important to do a market research as there are many participants already performing effectively in the apparel industry. The first factor that requires to be scrutinized is a minute study at the products that the customers find difficult to get hold of. The products that the customers are missing and making better the already available products are important (Salamzadeh, 2015). Market research is important in identifying the customer needs and to understand the possibility of success with a particular business opportunity. The apparel market of UAE is attractive as there are market needs for trendy apparels and customers seek personalized and customized dress materials and designer outfits. 

Another important fact is that there are not many boutique stores in the market that offers outfits which reflects the cultural aspect of the country. Most of the tourists that venture the famous apparel outlets and retail stores look for traditional clothes that represent the cultural values of the country and trendy at the same time. As per the previous researches on apparel industry of the country it is evident that boutique can prove to be a successful business venture in the country. As per the market, analysis the growth of this industry is can be increased looking at the revenue of last five years. Apparel industry is not a new industry in UAE but the revenue collection of this industry is profitable enough for investing in this industry for the first time.

Customer and customer development

Customer development is one of the moot criteria for profitable business ventures and it is important to identify and segregate the customers of this industry based on their individual traits and needs. As far as the apparel industry is concerned the target customers of the boutique store is vast (Joyce, 2016). Along with the locals who can not afford the designer and customized clothes of other fashion boutiques because of its exceptionally high price can certainly be the target customers of this boutique as this boutique aims at serving the customers of different social strata with personalized clothing and outfits. As per the current study there are not much variations available in the market as far as men clothing line is concerned. This boutique can be an outstanding option for the men who are looking for personalized and customized trendy outfits. 

In order to understand the customer needs of this particular industry it has proved to be potent enough to study the current market needs of apparel industry. As per the current needs of the customers the customers can be classified into several sections and the classification can be defined as following:

  • Tourists who are looking for traditional clothing and trendy outfits that reflect the cultural values of the country.
  • Male customers who are facing issues in finding options in their clothing and are tired of the similar designs.
  • People looking for trendy and fashionable clothes at an affordable price.
  • People who intend to buy personalized and customized clothes.

The customers in order to acquire their needs currently paying  higher than the usual therefore this boutique can solve their problems regarding affordable clothing. As per the study it has been found that most of the boutiques sell their own designs or they are operated through the designs of a single designer (Hammad, 2015). This boutique intend to accommodate some of the popular brands and along with that intends to provide ample scope to the aspiring designers to showcase their clothing line and innovative designs. Compared to a retail store a boutique is a small retail and it usually has less variety of items. Therefore, this business can be started with moderate capital investment which is ideal for start ups.

Competition and positioning

Boutique stores of UAE are more focused on the community selling and it is important to evaluate the potential competition for this particular boutique in the area. As per the market analysis there are not many boutique stores that offer low price and affordable buying options to the customers and thus, this is an potent advantage of this boutique store. The customer need of customized clothing is served by a few boutiques but the customer need of acquiring comfortable and customized clothing at an affordable price is not fulfilled by the already available retail stores (Vel, 2013). 

There are several boutique stores that sell imported clothing and Alexander Mcqueen and Channel are some of the most famous retail stores but the characteristics of these stores are that most of the boutiques are the branches of the foreign designer outlets and therefore they mostly sell the designs of their parent country and because of importing the clothes the price is not affordable for most of the customers.  Boutique 1 at JBR is another boutique that offers runaway collections. S*uce which is run by a Middle Eastern woman can prove to be a potent competition for this boutique. 

In order to plan an effective business strategy for the boutique it is important to understand the strengths and weaknesses of the competitors.

Advantages of the competitorsWeaknesses of the competitors
Already established business market.
Potentially well known to the local customers
Already established customer base
Better understanding of the current market.
Access to several stakeholders both from UAE and other countries   as well.
Well established marketing chains.
Over priced.
Excessive priority on the imported designer clothes.
Do not fulfill the needs of people from different economic   backgrounds.
Preferred by a single segment of customers.
 Can not fulfill the   customer needs.

The competitors or the other boutiques have 40% of the market share as far as the whole apparel industry is concerned. Apart from the boutiques, the retail stores have majority of the market share and new retail stores can prove to be a threat for this boutique as well (Joyce, 2016). In the retail industry because of its uniqueness boutiques have its own value and market share. As far the retail stores are concerned their sales are steady for the last two years but the boutiques of the country are declining because of the high prices. 

As a start up the major barriers of the business entry are the well established boutiques of this area and their loyal customer base. Along with that well established reputation of the boutiques and their marketing chains can serve as the potential barriers for this or any other start ups in this industry. These barriers can be overcome by collaborating with established and experienced stakeholders of this industry. Collaborating with different brands, aspirant designers as well as local fashion designing students can prove to be helpful for this business venture.

Business model

The market analysis and the closer look at the other boutique stores have helped in identifying the business traits of the stores. After assessing the pricing strategy of the boutiques and their promotional strategy it is evident that the weaknesses and the challenges that theses boutiques face are due to the fact that they are not cost effective enough for the customers and hence it has be problematic for them to establish a huge customer base (Rougès, 2014). They serve only a limited number of customers but it is evident that these boutiques have a strong customer loyalty towards them and therefore it is difficult for any new boutique to attract their customer base. Rather than it is important to concentrate on creating a new customer base. 

As it is a start up in the retail industry the business strategy requires to be innovative and the appropriate model for this start up can be a combination of two business models. The first one is to cut price in order to gain an industry share and then profit later on. As this start up targets at the customers from different economic backgrounds, its pricing strategy needs to be tactical enough (Hammad, 2015). Thus, this business attempts to target a huge market and sell the apparels at lower prices than its other competitors and with the growth of the company it can expand its product line as well. Negotiating product discounts with the suppliers and investing in technology can reduce the promotional and marketing costs effectively and this can speed up the customer responses and can help deliver lower costs to the customers. 

Another model is to set up a modern franchise business. From a local apparel boutique, it can effectively attract entrepreneurs from all over the world. This can prove to be helpful in gathering designers and aspirant designers from different parts of the world who share the similar vision and increase the number of stakeholders as well.

Learning and adaptation

In the process of the study the idea of establishing a new boutique store that can fulfill the needs of people who can not afford to buy customized clothing because of the high prices, it has occurred that this can be an essential opportunity of a start up. But learning about the marketing opportunities it is evident that physical retail store can not be successful enough because of the online retail stores (Dudin, 2015). Therefore, it is important to add innovation in the current idea. Online retailers exclusively provide the customers with several discounts and offers and the customers today tend to be more attracted to online shopping. Therefore, it is important for this boutique to include products that can not be availed from the online retailers. It is important to include aspirant designers and offer customized and personalized clothing options to the customers (Rougès, 2014). The products need to be innovative and captivating as well as different from the already available clothing.

In the process of the study I have found it important to calculate the budget for the start up including costs of venue, utilities, decoration and initial promotional budget and then to consult a small business consultant. 


In the light of the above study along with the gained experience it can be stated that opening a boutique shop in UAE can be a wonderful opportunity from entrepreneurial point of view and for the professional designers as well.