Dispatch

How Dragon Mart Explains the World

How Dragon Mart Explains the World

DUBAI — “No, I do not need a barber pole,” I said.

“But it is real, you see,” the young Pakistani salesman said, “like the ones in America.”

I conceded his point, but I reiterated my own: “I do not need a barber pole.”

Undaunted, he went on: “You see the red and blue lines – look! – see how they move!” He traced his fingers on the swirling red and blue lines. “They go down and come up again. Down and up. Down and up!”

“Yes, they swirl just like a real barber pole,” I said, offering a bit of positive reinforcement in lieu of cash.

Swirl,” he said, pulling out a notebook from his stonewashed jeans pocket and writing in it. “I like this word: swirl.” He put his notebook back in his pocket and stepped in closer to me: “I give you good price, not tourist price.” He winked conspiratorially.

I finally make my escape, after reiterating the stubborn fact that I did not need a barber pole. A few minutes later, I am seated, eating sweet yellow watermelon from a shop called Thai Fruits. The young Filipina girl who sold me the watermelon wears a purple uniform shirt and the bored look common to mall food kiosk employees from Dallas to Dubai. Nearby, a store sells diesel generators and heavy piping next to another Filipina woman hawking fluorescent blue cotton candy.

I am deep in the heart of Dragon Mart, a massive mega mall far from the shining towers, sunny beaches, and glitzy hotels of “postcard Dubai.” I’ve been here more than three hours, exploring what just might be one of the most curious corners of global capitalism in the world.

Dragon Mart is the largest Chinese trading hub outside of mainland China. Located in the Persian Gulf emirate of Dubai and founded in 2004 by a Dubai government-owned developer, it houses some 4,000 mostly Chinese-owned shops selling a dizzying array of manufactured goods, from garments to machinery to jewelry to, yes, barber poles. This is something of an emerging “Hong Kong West” for Chinese businesses — a major stop on the so-called New Silk Road that links mid-sized Chinese companies to the fast-growing markets of Africa, the Middle East, and South Asia. As China’s domestic economy slows, the emirate provides southeastern China’s manufacturers a much-needed platform for their goods.

Dubai, one of the most cosmopolitan places on Earth, has emerged over the past decade and a half as a global hub of world trade. Some 200 different nationalities live and work in the city, and tourists visit from everywhere from Birmingham to Bombay. That kind of customer profile can usually only be found online — but you can see it every day in Dragon Mart.

It’s the influx of Chinese citizens and businesses that look poised to transform the emirate in the years ahead. Four of China’s top banks, as well as several state-owned enterprises, have set up shop in the city, using Dubai’s sea and air links to the world — especially Africa – to conduct business across an emerging New Silk Road. There are some 200,000 Chinese living in Dubai, while the city also attracts some 300,000 Chinese tourists a year — and Chinese travelers are the biggest spenders in the airport’s duty-free shops, snapping up gold bars, premium whiskies, and Swiss chocolates.

Dragon Mart is thus part catalyst and part outgrowth of one of the fastest growing trade relationships in the world. It’s a place where African and Arab shopkeepers or industrialists can place a wholesale order from Chinese manufacturers without stepping foot in China. Need 1,000 teddy bears, 100 diesel generators, or miles of heavy piping? Stop by Dragon Mart and browse stores with names like Supreme Power Trading Company or Shanghai Becoming International, and you’ll find what you need.

But it’s also a living, breathing mega-shopping mall that attracts some 65,000 retail visitors a day, according to its Dubai-based developer, and it recently has expanded, adding another 1.3 million square meters of space — the equivalent of 17 football fields — to an already astonishing 1.6 million square meters.

These eager shoppers crowding into Dragon Mart are part of a trend that promises to transform the globe in the years ahead. A massive new middle class is on the rise, and the numbers are dizzying. Homi Kharas at the Brookings Institution notes that by the year 2030, we will add another 3 billion people to the world’s middle class, and the majority of that growth will come from emerging markets in Asia, the Middle East and Africa – Dubai’s major trade regions. That will give us a middle class of some 4.9 billion people by the year 2030.

The world’s major multinational consumer companies are already lining up to chase this new prize. From Johnnie Walker Scotch Whisky to Starbucks Coffee to iPhones at the higher end and Kit Kat bars, Coca-Cola, Tide detergent, and Colgate toothpaste at the more accessible end, the emerging middle class consumer is reshaping global business.

But there are different gradations of that emerging middle class. Dragon Mart is not home to the Starbucks set. Instead, it is where Arab expatriate clerks or the legions of Indians that help the city function buy school supplies for their kids, or middle class tourists from Iran and Russia hunt for bargains. It is a place to buy goods from the thousands of Chinese manufacturers that make sneakers with brands like Bugaboo or pen sets under the brand name “Character: Absolute Distinction.” This is the grittier part of the emerging middle class story, which is unfolding far from the glitzy shopping malls with indoor ski slopes and massive aquariums that have made Dubai famous as a symbol for excess.

Dragon Mart also tells another story: the story of China’s emergence across the Middle East and North Africa. Chinese trade with the Arab world has skyrocketed over the past two decades, rising from about $25 billion to more than $240 billion today. You can’t visit a souk or a bazaar in the Middle East today without seeing Chinese-made sneakers, toys, jewelry, even Persian-style woven carpets. During a recent visit to Mecca, the holiest city in Islam, I browsed among the religious bric-a-brac in a store near the holy mosque, and all of the items – from replicas of the holy mosque to prayer beads — had one thing in common: “Made in China.”

Today, China is one of the top three trade partners for the key countries of the region: Saudi Arabia, UAE, Iran, Egypt, and Iraq. This was not the case a decade ago. In 2013, China surpassed the United States as the largest importer of Saudi crude, and today it sources more than 50 percent of its imported oil from the Middle East – and rising.

The December 2015 visit by Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed al-Nahyan to China added weight to the UAE-China relationship. While Dubai boasts commercial heft, Abu Dhabi boasts petroleum and political heft. In a meeting with President Xi Jinping, the two sides announced a $10 billion investment fund to co-invest in each other’s countries. Xi Jinping noted that the fund will also support his One Belt, One Road initiative, part of a strategic vision that will link Asia, Europe, Africa, and the Middle East via infrastructure investments expanding connectivity.

But Dragon Mart is not simply an expression of President Xi Jinping’s state-directed New Silk Road ambitions; Dragon Mart bears little resemblance to the infrastructure projects that Beijing typically pays for, and benefits from, in emerging markets. There is something more organic, and consumer-driven, at play here: A Dubai-based developer with a “build it and they will come” mentality simply built it — and shoppers did, in fact, come. Dragon Mart is a natural stop for the middle-class residents that flock to Dubai from Iran to India, Kenya to Kazakhstan. Yes, there are fabulously fancy hotels in the city, but there are also plenty of three-star offerings for those slightly lower on the economic totem pole — and their mall of choice is often Dragon Mart.

I caught a subtle hint of this at the jewelry stand manned by a Filipina woman. As an American, when we think of first names, we hardly ever can determine social class. Not so in parts of the Middle East. Some of the names on the jewelry – Batoul, Zahra, Sakineh – are typical names of Iranian or Shia Arab women from the more pious middle classes. The more “modern” names — Leila, Yasmin, Arezou — were nowhere to be found.

The food court, too, was more local than global. Yes, it had Pizza Hut and Subway, but the slightly more expensive offerings that dot Dubai, like Shake Shack or Nando’s, were nowhere to be found. Instead, you could eat at China Way, Red Flavours Indian restaurant, Kababak (Persian), or Al Arrab (Syrian). The Al Arrab logo of a scowling, mustachioed, slightly Saddam Hussein-esque turbaned man might not translate well internationally — but they make a mean shawarma sandwich, and sales seemed to be brisk.

Much of the sales staff in the Chinese shops came from India, Pakistan, the Philippines, Egypt, Syria or East Africa. There seemed to be a subtle pecking order: The Chinese owners of the shops tended to sit back as the “foreigners” pitched their goods to passersby. Many of the Chinese owners had neither the English skills – English was the lingua franca of Dragon Mart – nor the sales experience of their hired hands from Pakistan or the Philippines. The foreign sales people did their jobs well, selling robustly but not obtrusively. They were also not shy about expressing their disdain for Chinese products.

“Don’t buy that necklace,” a Filipina woman with bright red lipstick who manned a kiosk told me. “It is made in China. Not good quality. Who knows what the stones are?” A Syrian man urged me to “stay away” from a particular brand of “Persian” saffron. “I think it is a fake, made in China, but they say it’s from Iran. It’s no good.”

It was now late afternoon, and the crowds were getting thicker. I began looking for Chinese knock-offs, fake watches, or fake Louis Vuitton luggage, but I didn’t find much. Dragon Mart, it seems, is not the place to buy fakes. Instead, I noticed another trend of Chinese manufacturing. Looking for unauthorized Disney gear like a Winnie the Pooh teddy bear? You won’t find it, but you will find a golden bear in a red sweater that looks a whole lot like Winnie the Pooh – “Pooh-ish,” if you will. You’ll also find Louis Vuitton-ish designs, pens with Montblanc-ish logos, and plenty of Cartier-ish jewelry boxes – all perhaps different enough to hold up in a copyright court of law.

The “-ish” knock-offs tells us something else about China’s role in the world economy. For all its economic success, the country has not been as successful in developing global brands. That’s why you see so many purchases of U.S. companies by Chinese firms, including the recent $5.4 billion purchase of General Electric’s appliances unit by the Qingdao-based Haier Group. On the other hand, China also has too much at stake to blatantly knock off Cartier or Winnie the Pooh and sell those goods as their own. It thus makes sense that – faced with a crackdown on copying those brands – some manufacturers opted for the “-ish” route.

Whatever Dragon Mart is doing, it’s working. The public can’t seem to get enough. Plans for a two-floor expansion were just launched, which will add a 12-screen cinema, a 250-room hotel, 500 new stores and 600 kiosks to the mega-mall. 70 percent of the retailers in the extension will be Chinese – roughly equivalent to the existing ratio. The director of Nakheel Retail, the mall’s developer, says this extension could see Dragon Mart grow to 100,000 daily visitors.

Meanwhile, the mall is providing an income and new horizons to thousands of workers and small and medium size business owners, who in previous generations may have never left the provincial cities and towns from which they came. As the day drew to a close, I walked over to a kiosk selling iPhone gadgets. This time, the sales person was a smiling and enthusiastic young Chinese woman. She hailed from a village near the city of Guangdong, in southeastern China, then moved to the big city, and took a job in manufacturing. “I did not like it,” she said, so she quit.

She used her savings to fly to Dubai. She had a distant relative working in Dragon Mart. She had heard tales of the Emirates’ wealth. She talked her way into a sales floor job and now, three years later, she pronounced herself “very happy.” She meets people from around the world, she likes the weather (“even in summer,” she said), and she has her eyes on opening her own shop one day.

Does she see Dubai as “a pit stop” on her way to Europe or America? Or will she head back to China?

She thought about it for a moment and, said: “I like it here,” she said. “Why should I leave?”

NASSER YOUNES/AFP/Getty Images