Brands will soon measure their success based on the reaction they get in Dubai, says Dr. Rapaille
Dr. Rapaille
In September, the grand old dame of American department stores, Bloomingdale’s, announced that in 2010 it will open its first overseas location in — you guessed it — Dubai, in a luxe mall housing not one but two of the retailer’s stores: a threelevel clothing emporium and a single-level home goods store, comprising about 200,000 square feet. One person not surprised to hear the news was Dr. G. Clotaire Rapaille, a French-born former child psychiatrist-turned-corporate consultant who has cultivated an interesting theory about the Middle Eastern metropolis. He believes the new model for global financial success revolves around city-states such as Dubai, Singapore and Macau. He calls these places hubs and the people who flock to them “hubbers.” We spoke to him about the implications for luxury marketers around the world.
COUTURE International Jeweler:What’s the “Hub” theory all about? Dr. G. Clotaire Rapaille: There’s something happening in the world, a completely new model for economic and financial success. It’s not about New York, London or Paris. It’s about a group I call the “Hubbers.” They are French, Russian, American. They belong to a tribe of people who know the best, and they define the best. They define what is a seven-star hotel — the only one is in Dubai, and one night costs $1,600. I am trying to understand these people. It is not a market in itself but more than that. They decide the reference system for everyone else.
CIJ: How so? CR: Take, for example, airports. New York Kennedy, Atlanta? Terrible. Dubai? The new Hong Kong airport? Fantastic. How am I going to judge New York’s airport? I’ll compare it to Dubai and the Emirates airline. People are still selling business class without flat beds. Forget it.
CIJ: What about luxury centers in established markets? CR:Where do you want to open a store? In New York, where you’re not going to make a profit and you’ll pay a lot of taxes? Or in Dubai, where there’s no tax and growth is about 20 to 30 percent? What is the rationale for not going there?
CIJ: But is that kind of growth sustainable? CR: Dubai is only making 4 percent of its growth through oil. But they have an incredible vision, and they are succeeding. They have the only seven-star hotel, Harvard Medical School is coming, the Louvre. It’s not a democracy. Sheikh Maktoum is considered the CEO of a corporation, and you don’t ask people to vote on healthcare. In the Western world, we still have to deal with unions. In America, everybody wants universal healthcare, but how do you do it? Raise taxes and then people leave. They go to Dubai [Laughs].
CIJ: What happens to Europe in this model? CR: Europe invented the city-state. Until the beginning of the 19th century, Venice was known worldwide. They had the best ships. They were free and open-minded. We lost it, and now Venice is awful. It’s full of drunken British and German tourists, and there are no more Venetians. They don’t protect what they have. The new model is Hong Kong and Singapore. All the Swiss banks moved to Singapore. Why? No taxes. Whereas Switzerland is under pressure from the rest of Europe.
CIJ: What makes you think these hubs can beat Europe at its own game? CR: Because they’re attracting the best of the best. Macau does more business than Las Vegas and Atlantic City combined. It’s a kind of luxury people don’t understand. I was talking to a client with a store in a hotel in Macau, and one night a guy arrived and said, “I’ll buy the whole store.” We have to change our reference system.
CIJ: So what should luxury marketers do? CR: The first thing is to understand the city-state model and where the concentration of money is going to be. We’re not looking at it as a market but as a place where trends are going to be decided. Of course you want to be there. You can see what works and make a lot of money, because you understand the way the world is going. It’s like a periscope to a higher world.
