Sharjah Co-operative Society was set up in 1977 by ministerial decree to provide services to the local community and boost the living standards of people in Sharjah, one of the emirates of the United Arab Emirates.
Other co-ops followed and the UAE is now home to 40 co-ops and two co-operative unions, with most of the sector operating in retail.
Sharjah Co-operative Society runs 48 retail outlets, including big shopping centres with various retail stores, restaurants, cafés and healthcare centres. As such, the co-operative is an important community hub for the emirate and its capital city of Sharjah, which is the country’s third-most populous city, after Dubai and Abu Dhabi.
The pandemic led to changes in UAE customers’ behaviours with e-commerce accounting for 8% share of the retail market during 2020. The UAE retail e-commerce market reached a record US $3.9bn in 2020, a 53% year-on-year increase. In response to these changes, Sharjah has put systems in place for customers to order online or via WhatsApp. Items can be delivered to them or picked up at a selected store.
“As a co-op, our mission and target is different from that of all the other competitors around us, we don’t just target profit, but also serve the community,” says executive director Zied Hammami.
During the pandemic, the co-op distributed AED 7m in the form of gifts and food to charities in the area. Such acts of kindness are common during the holy month of Ramadan and known as ‘Ramadan Meer’.
The co-op also extended a helping hand to those affected by the August 2020 Beirut explosion, sending 65 tons of food as part of Sharjah city’s ‘Salam Beirut’ initiative.
In addition to its retail outlets, Sharjah Co-op also runs MobiCoop, a ‘shop on wheels’, to reach customers in remote locations. Mr Hammami says this initiative shows that his co-op remains rooted in the local community.
“When it comes to food, people need to smell, to touch,” he says, adding that MobiCoop enables them to choose the products they want just like they would in a local supermarket.
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“Many branches were opened to support communities, because no one else would go there,” he says. “Our message for customers is we are here for you. We will come and serve you”.
“We consider participating in society as our main goal,” adds Abdullah Issa Al Huraimel, executive director, new enterprises.
He says the co-op provides services in underserved areas to support remote communities including via 16 branches in central jails – this is in addition to the 48 branches run in Sharjah.
Customers make around 35,000 transactions across all of Sharjah Co-op’s branches every day. Around 60-70% of the population living in Sharjah shop at the co-op, which has a market share of 25% in the city – the highest of all retailers, and 5% in the UAE.
Sharjah Co-op is owned by 24,000 member shareholders, who get a dividend on the surplus made by the co-op and 10% cash back on total purchase. Around 165,000 customers shop at the co-op, including member owners.
The co-op is also an important employer in the local community, providing 2,000 jobs, of which women hold 25%. Employees can use a mobile app to access KPIs or book holidays.
Having a social purpose is not without challenges as competitors are quick to establish outlets in developed areas, reaping the benefits of Sharjah’s investments in the local community.
In April 2021 Sharjah Co-op launched its first state of the art Rahmania Mall Hypermarket in the city of Sharjah, an initiative that cost the co-op US $1m.
Another challenge is that customers want cheaper prices, a trend that began during the pandemic which is here to stay. Big retailers are at an advantage in this price war as they can run at a loss for many years to gain the market share.
Despite these challenges, Sharjah remains strong. In 2020 it reported a 7% year-on-year sales revenue growth and a 200% increase in e-commerce year-on-year revenue.
The co-op scooped several accolades at the 2021 Retail Asia Awards, winning Hypermarket of the Year – UAE, Omnichannel Strategy of the Year – UAE, and CSR Initiative of the Year – UAE.
The UAE’s co-op movement continues to grow, with 95,000 member shareholders. The sector contributes AED 46m to the country’s GDP but the government feels there is potential for it do still more. To help drive this growth along, the Ministry of Economy has recently signed a partnership agreement with the ICA, through the latter’s Asia-Pacific office to develop a long-term strategy for co-ops. As part of this, co-operative legislation will also be amended.
