tv Leaders with Lacqua Bloomberg April 11, 2018 9:30pm-10:00pm EDT
♪ >> what do the world tallest with an have in common e-commerce site? they are owned by millionaire mohamed alabbar. he was named the most influential man in dubai and consistently ranks among the top five most powerful error business leaders, but it's not all business all the time -- most powerful arab business
leaders. he's also an active sportsman. today, on "leaders with lacqua," we meet mohamed alabbar. thank you for joining us. you have built a conglomerate, a company that has multiple interests, multiple units, multiple portfolios. did you diversify because you saw an opportunity, or because you had to? mr. alabbar: i think looking at and thele east industries that i went in with my team, we saw amazing opportunities in the middle east in these sectors, and i'm glad past two ofough the years have been difficult, still these businesses are operating well. definitely, there's opportunities and sectors with long-term growth potential. francine: where do you see the
most growth coming from? which portfolio or part of your business will do better than the others? region isr: the food operating well, especially with the food delivery business, which is another story. e-commerce business is something that is very, very interesting. that isan amazing team also growing quite fast, but even with this growth, one has to be realistic as well. you look at this growth and look at what is going on in the middle east and government policies. look at the world economy and what changes might take place. francine: what does that mean? do you expect a lot of growth in the middle east? do you expect it to grow threefold, fivefold? mr. alabbar: i would say that our real estate business should
continue to grow about 20% a year. that is the shareholders' expectation. it is hard work to achieve that number and keep costs and margins under control. plus, macroeconomic issues in hand. a food business that should be growing 10% year on year in the region. keep in mind, we are talking about the middle east where there is a need for most industries to grow. i think the middle east still the wholeo grow, but demographics are in our favor. because they are young and the youth will spend four and five or 10 years -- in -- spend more in five or 10 years. mr. alabbar: i think the governments are working harder,
and you see the changes taking place. positive changes are happening in saudi arabia. the same thing in uae. we are quite interested in egypt as well and the changes taking place in egypt. with all the other issues we have in the middle east, i do not think it is going to get any worse than this. we are looking forward to a more positive trend in policy, in politics, in economic growth as well. terms of growth, country by country, what country will outperform the others in the middle east? of ourbbar: the majority focus is saudi arabia, uae, egypt, and i would say egypt is growing faster now. saudi arabia, i'm quite optimistic with the changes you have seen taking place. in the coming 24 months, i think you will see quite a good trend, and the uae as well. and of course, there are other arab countries, some slow, some
moving forward, but the majority of our business is in these countries. more,ne: will there be for example, property in saudi arabia? mr. alabbar: the public investment fund there is with us in our e-commerce business but also our food business. are we going to do more together ? i think there is a possibility. there is a lot of work they're doing in saudi arabia and outside saudi arabia and in the region and outside. saudi arabia looks very interesting in the coming years. grow,ne: how much can a property in saudi arabia over the coming years? mr. alabbar: saudi arabia i think is in the infant stage. if you talk about infrastructure, retail, industrial, hospitality, residential. you just have to make sure you .o into the right category
there is plenty of room to grow that way. francine: when you look at how you spend your time for each unit and each country, how do you keep on top of it all? mr. alabbar: well, i try. i would say real estate takes the majority of my time. about 40% of my time. then there is a split. food takes the least of my time because the team that sits on top of that business is really been-class, and they have in the industry. they know the industry well. team, aa vibrant vibrant organization. i have an a-team, but i am emotional about real estate. francine: that is the foundation of it all. do you still see it as your baby? hasalabbar: my connection
been to real estate more than anything else. it is a new brand of products associated. francine: when you look at various ipo's, was it to unlock value? do you also feel it was a high risk? mr. alabbar: i feel mainly to unlock value. at the same time, i really like putting management under pressure. you are out there in the public eye, under pressure to perform, but, mainly, value creation. i think that is the business we are in. francine: because shareholders understand what you do more and it focuses the mind of managers more? mr. alabbar: that is one, but many of our units under the mother umbrella, i think they are not fairly valued. out as separate entities, you create better value that way. francine: are you looking at
ipo-ing any other businesses or portfolios? mr. alabbar: we have our hospitality business, india, turkey, saudi arabia. the reality is you can take all these businesses public at the right time. i think in the coming three years, we will probably have india going forward and hospitality as well going separately the public route. francine: if i speak to you in five years -- i hope to speak to you before, but if i speak to you in five years, how much will your holdings be worth? i think we should be double in value. we should be growing 20%, 25% on an annual basis. i hope my management, my boards really put that as a focus. to be honest, i think we are capable of doing that. we just have to focus and make sure you have the right people to do it. and we do this day and night. that is really how we do
business in our region. francine: that's acquisitions or organic growth? mr. alabbar: i would look at organic growth. if you talk about acquisitions, which we have not done much of, i would expect we do more acquisitions. francine: thank you so much. coming up next, going from bricks and mortar to >>, we talk about a big push into e-commerce and how his company could become the amazon of the middle east. ♪
the biggest investors is saudi arabia's public investment is notut mohamed alabbar just competing against amazon. pre-mail --g a premium retail service. do you ever feel like there's a conflict, that you actually own dubai malls but at the same time are trying to sell on e-commerce platforms? the big question is if you are relevant to the space . all in all, the economy is areming so digital, if you not thinking about it, not acting to do something about it, i think there is risk of your business being in huge danger in the coming 24 months. francine: how do you stay relevant? mr. alabbar: first of all, i
have to talk to my kids all the time, and i learn from them. i have a little girl the cells jewelry to women in korea out of dubai on her instagram. what type of world is this? all of ouri think business from real estate to retail to hospitality -- i think the digital scene is changing all of that. if we talk about e-commerce movingcally, it is just your business to the digital scene. the economy is moving that way. from health care to education to retail. we just want to be relevant, and i don't think there is any conflict because the end of the day, there ought to be a collaboration or connection between the real world and the physical world. can we really try to find a solution and work them together and stay relevant in our business? francine: how much of your sales will be done on your e-commerce
platform and 5, 10 years? in general, for the middle east, are you a step behind in selling on e-commerce? mr. alabbar: remember, when i look at the lease right now, i mean, e-commerce is 1.5% to 2%. the compared to the rest of world, so there is room for all of us to grow. where will this be? i think it will grow much faster than the rest of the world and get into the 10%, 15% quite fast, again, because of the demographics of the region, so we go live to our society that there ought to be a native organization that looks after the sector and participates. francine: what will noon become echo are you nervous that you are going head-to-head with the most successful retailer of all-time? will be an: noon
ecosystem, and of course i'm nervous. i'm nervous from everybody. competition is severe and markets are open. anybody can come in. the big payers are going to come in. some have come already. but i am from that part of the world, and i think it is our duty to participate. we as ever businessman -- as arab businessmen are tribal. that means i'm from this society. we have to be aggressive, achieve the numbers and success, but that is a duty that i feel responsible for. competency is good for the consumer and the region rather than one player coming and controlling the lives of our customers. i think it is fair to have competition. francine: how will you go against amazon?
do you have to convince retailers to sell on your platform instead of amazon's or is in a price war? withlabbar: we are working local retailers, and we are their partners. how other international players -- they do it through sourcing overseas or working some other methods -- that's their business. but our partners are the local retailers. maybe our margins will be smaller, but that is ok. we would rather win on the long term rather than alienating local retailers. will there be a price war? the price to know months, there's a price war -- the price past twos -- the munns, there's a price were. the customers are winning. people in my region do not have to buy milk for their kids 10% more expensive. ofhink this is good for all us. of course there will be
competition, but the amazing thing is the world is open. so many new opportunities are butg provided to everyone, are you planning long-term? are you serious about it? francine: is it the service or product? how does the middle east shop? what is selling at the moment and what is selling it the next 5, 10 years? the scene is not much different than what is going on in the world. people want fast delivery. people want quality. will they pay for the delivery? this point int time, we are subsidizing the delivery. that is what the firms do, get you used to this wavelike, then take a little bit of margin, maybe control the market, but and saying people want quality. they want value, consistency, a delivery time that is fast and they want the product that they
want, which changes from one month to another, and therefore, you have to provide that and get ready to provide the new thing that might be happening next month. francine: how important is market share and how important is it right at the beginning so people get used to your platform and not amazon? >> it is important and you have to be aggressive and provide the best service ever. you will be cutting prices. the good thing is that the market is big enough two players can come in. imagine if you do business in the u k and there's only one operator. how fair is that? francine: isn't there and amazon here? mr. alabbar: there are many other players in the u.k. as well. i prefer more than one player in the market. francine: up next, we talk about the leadership skills it takes to create both the world's largest mall and the tallest building in the world.
francine: the company has grown within three fulton's 2011 and expanded heavily in the middle east and north africa despite political instability in the region. what kind of leadership does it take to shepherd a global company through turbulent times? is here. and founder what kind of leader are you? we talked about encouraging your regional leaders and portfolio managers to be aggressive. do they always need to be on their toes? mr. alabbar: number one, they have to be relevant. change is taking place around the world, so are you relevant? theyou have to believe in reset. are we upgrading every month?
we have to be relevant. we have to act. we have to believe in the best people, and we have to care about society. these are the elements that i have to depend on. francine: what does it mean, being relevant? the change in pace is so fast. mr. alabbar: relevance is watching social media daily. what is going on with your customer and your business? you? ert are and alerts about how your customer feels, with what is going on in the industry, politics, with new tools of management? are you awake? you need to bedo a wake for? your clients, politics, your business interests? my people, society,
what is going on in politics, what might happen to interest rates. what is going on in technology, what is going on digitally. you have to be alert of all of this, but number one, people. then you have to make sure you share with them this environment , and are they fit in this environment? francine: are you putting the fire under your managers' feet to give them going, or do you micromanage? mr. alabbar: i don't think i micromanage, but there are certain situations where i do have to go and micromanage. mom's kitchen. i used to work and my mother's kitchen when we were all 13 kids living in one room, so i know how to do that. the can pull back and be
chairman of the organization, but if there is a need to move in, i can comfortably move in. i have good, qualified people with me, but i think i'm a target creator, the guy who does the monthly performance reviews, the guy who pushes the limits. i want people to work hard because i think we as human beings, our productivity is still low. francine: you spend a lot of time on productivity because that is where you came from, but what excites you most in the others you are doing? e-commerce excites me a lot because when i look at how the digital world is changing our lives, i come back to my real estate business and say maybe this office is no and void. maybe this is not required anymore. also, if you look at the digital guides and see how fast they
work or the process they use or in thesef people offices, therefore, i really believe the younger generation are running the world and running it extremely well. so much learning on the digital side, but i think my investment in the private equity firm that specializes in technology in the middle east with almost 80 ventures, that is amazing, learning about what is going on in the middle east as well and industries that are about to come. focus a lot onu diversity for your company's? is that important? mr. alabbar: they're important, and i think it is happening naturally. we don't even have to do it anymore. francine: do you have metrics? mr. alabbar: we have metrics, we have kpi's for that, but so much is happening naturally, and i like that. francine: do you think it will increase in time, the number of
female workers? mr. alabbar: the female workers are taking charge. most of our organizations, we have to have more of that, but look at our government. the highest percentage of senior people in government anywhere in the world. francine: mohamed alabbar, thank you so much for joining us. he is, of course, the chairman and founder of emaar properties. mr. alabbar: thank you. ♪
>> asia-pacific stocks mixed. hawkish tone coming out of the fed, president trump wrapping them up with a dramatic warning about syria. threatening missiles. oil has its highest for three years. concerns of u.s. military action that might hit supplies. in hong kong i am rishaad. haidi: hong kong dollar touches the weekend of its range this is "bloomberg markets: asia ." ♪
haidi: we have bank of korea's staying on hold. inflation is going nowhere. getting some of the breaking news through from policymakers. bank of korea's thing you will come in lower than the previous productions -- projections of 1.7%. it will stay in the mid-1% range. theth could be a mine with previous 3% projection spare. also just making some remarks about the implications potentially of trade tensions, lower inflation for longer. we have thee expectations that will my be going anywhere in terms of that rate decision going into the second half of its year. quarter theythird thought they would be moving to tightening events.