Hani Weiss is the Chief Executive Officer of Majid Al Futtaim - Retail and is leading a business which operates over 450 Carrefour stores across 16 countries in the Middle East, Africa and Asia, which today, employs over 38,000 colleagues, and serves more than 750,000 customers a day. Hani also holds an Executive MBA from the London School of Business and has completed the Senior Executive Development programme at HEC Paris.
Considering his vast experience in the retail sector while serving in a leadership position, BR Research had a detailed conversation with him during his most recent visit to Pakistan to map the current landscape of modern retail in Pakistan. Following are some edited excerpts from this conversation:
BR Research: Your recent visit to Pakistan is a promising sign and a statement of intent. How is Pakistan ranking in the larger scheme of things for Majid Al Futtaim and Carrefour?
Hani Weiss: Majid Al Futtaim is a big conglomerate and a UAE based company. It looks after grocery business in 16 countries. We serve over 750,000 customers every day and aspire to create great moments for everyone every day. Among the 16 countries, Pakistan is ranked highly as a promising country in terms of growth, considering the country’s young population who are aspiring to be part of this new world of digital transformation, technology, which holds something of great value to cater to their wants and needs. We started back in 2009, currently we are operating 10 stores in Pakistan in addition to two new ‘myli’ stores which have been inaugurated in the last few days. We are extremely happy about the new model we have brought to our female customers in the country catering to their everyday beauty needs. Besides the grocery business which continues to evolve day and night, we introduced digital experiences as part of our omni channel experience. Today we have 10 stores, an omni channel offering, our new health and beauty concept, 2,000 wonderful Pakistani colleagues who have served close to 7 million customers so far this year. Pakistan is a considerably large country with a population of 220 million. Coupled with a GDP in Pakistan almost touching 67 billion rupees, growing by 20 percent since last year, we believe a lot of opportunities lie ahead within this nation.
BRR: What do millennials and Gen-Z expect from the retail sector and what is their definition of value?
HW: The retail sector has undergone significant transformation over the years. In the past, small grocery stores used to know their customers by name and would know exactly which items they liked. We lost this touch when small grocery stores grew bigger in size and became big box retailers who acted like an icebox offering no experience, personalization, and connection with the customers. Comparatively, customers today expect more personalization in their retail experience. Technology is playing a major role in the way we use to do business to cater to the needs of millennials and Gen-Z. For them, value is not only about price but also time. They want to go fast and prefer the convenience of ready-to-go products. Considering this shift in consumer preferences, retailers such as Carrefour, who are leading the way, are continuously evolving their business model to cater to these changing expectations. This is not a challenge but a natural attribute of the retail sector to consistently innovate and offer something new to the customers as per their needs. At Carrefour, we are creating an omni channel experience for our customers giving them the freedom to shop with us online or offline or a mix of both subject to their choice. This is how the new retail experience will look in the future.
BRR: The journey of buying habits got transformed and expedited by Covid-19 in favor of online shopping. How is this omnichannel digital transformation looking for Pakistan?
HW: Digitalization is playing a major role in the transformation of businesses around the world. Covid-19 caught us off-guard, but we quickly came up with extraordinary solutions to tackle the Covid-19 situation and kept our shelves fully stocked to ensure that our customers continuously receive the product supplies to meet their daily needs. Our colleagues remained committed and continued fulfilling their professional obligations to serve our customers during a period of uncertainty. Since Covid-19, we have doubled down on technology. Currently, we have more than 110 data scientists working on technologies like machine learning and artificial intelligence to introduce a seamless and automated shopping experience for customers. While digital technology can help us transform our business, it can also make shopping more convenient for our customers. The Valet Trolley service we offer is one such service that will soon be introduced to Pakistan, whereby customers can enjoy the in-store shopping experience and their orders can later be delivered to their doorsteps the same day as they continue with their daily lives, be it work or leisure. We also plan to install unmanned checkout counters in our two new upcoming stores in Pakistan, allowing customers to check out by themselves, as well as, the scan-and-go service allowing customers to scan their products, bag them, pay, and leave in a time-efficient manner, autonomously.
BRR: For more inclusive progress which spans from production to shelf, how can Pakistani manufacturers and suppliers benefit from Carrefour’s inclusive product sourcing strategy?
HW: Our duty is to create value for our stakeholders which also include our suppliers, partners, communities, colleagues, and the Government. In Pakistan, modern retail is still only at twelve percent of the total industry which is extremely under-represented. Our vision is to ensure that modern retail claims a higher stake in the future which will help create more direct and indirect employment in the country and a higher tax revenue collection for the local government to undertake a more effective redevelopment of the local communities. It also serves as a big opportunity for our local partners and suppliers while we directly source from the farms and avoid the middleman. This model also enables us to offer farm fresh produce to our customers and secures the farmers interest by engaging them in a direct and long-term contract with us which also ensures their expected profitability.
We also recently inaugurated a packing machine in Pakistan to package locally produced food products like pulses and rice and offer it to our customers at affordable prices and best quality. I have engaged our team to explore creating an export hub in Pakistan to supply these packaged products from Pakistan to the rest of our markets, mainly the GCC countries and other countries too. This will also help earn more foreign exchange for the country and create more value for Pakistani manufacturers by connecting them to all 16 countries in our network.
BRR: This region usually doesn't see women serving in the retail landscape. Carrefour has some success stories, including taking aboard the first female butcher in Pakistan. What is big on your diversity and inclusion targets for the coming year?
HW: Diversity and Inclusion are a core focus area for us and we continue to double down on our sustainability agenda, which apart from women empowerment also focuses on local sourcing and socio-economic and environmental sustainability. Majid Al Futtaim strongly encourages and facilitates female leaders to join our organization. We have women shouldering important responsibilities in various sections of our stores including more unconventional jobs such as butchery. I had the honor of meeting with our Pakistani female leaders during this visit and I am pleased to share that women's representation in our network has grown from 8 percent to 12.5 percent within the last year. We are proud that Carrefour is leading this transformation. At the group level, on my own team, 30 percent of the top retail executive committee positions are held by women. Personally, I would like to see one of these brave and gifted women be my successor and the CEO of Majid Al Futtaim Retail.
BRR: What are the consumer patterns around the world? Are they becoming more specific or are the new-age shoppers more mindful of the impact they create in the world?
HW: It's true that the world is going through major challenges. Inflation and political instability are two of the top macroeconomic challenges impacting retail business, and more importantly, consumer habits, pushing us to work harder to be able to deliver on customer expectations. We use the insights from the data from our loyalty program to understand our customer patterns and expectations better. There are customers who seek a better experience, they want high-end products, and the best cut of meat, and they want to enjoy the way they live because they care about their lifestyle.
Then there are customers who seek the best value and the best price. Currently, we have 125 private brand products produced here in Pakistan and we aim to take the number to 1,000 in the next three years. It will help us provide our customers with the best value at the best price. And lastly, there are customers who are not too eager to visit the physical stores. They enjoy the digital experience by ordering online, which is delivered to them at their doorstep. We are continuously working to enhance and improve the digital experience of our remote customers by constantly innovating and improving our digital platforms.
BRR: A lot of economists have cautioned about an impending financial crisis in 2023. What's your forecast for the region and the business?
HW: Yes, I am aware of the gloomy prospects. Regardless of what happens, our role is to secure our supply chain by working with our local producers and farmers. We also want to ensure we provide our customers with the best value for money, including the best price, quality, and omnichannel experience. Our business is becoming more resilient because we've learned a lot during the COVID pandemic on how to continue serving our customers, despite the challenges. I think businesses should become more agile and adapt. We can adopt the best strategy, consider all the risks, and probably the mitigation of those risks as well, but in reality building, a sustainable business on the ground for our customers, the country, and our shareholders will make a big difference going forward. I consider Pakistan as one of the most promising countries which have huge potential. I am happy that a lot of regulatory and tax reforms have been made in the last few years that will help create a business-friendly environment for businesses to operate fairly to contribute to the country’s economic growth and development.