Cluster Growth in Lebanon: Exclusive Interview with Rabih Saba, Managing Partner at Venture Group SAL

How did you start with this idea?
I started with my partner “Marwan Ayoub”. Back in 2006, we noticed that an organized bar street is lacking in Lebanon. We began by looking at downtown where we noted the existence of restaurants, offices and hotels but yet no entertainment bars. So in 2011, we launched Uruguay Street and learnt the dynamic of how cluster works and started looking more into the casual dining rooms and developed the concept of clusters as you can see now: The Village, Backyard Hazmieh, Restos Saint Nicolas and others to come.

How did the team of partners come together?
Our 1st and main strategic partners are landlords since our goal is to develop an asset on their lands. The 2nd layer of partners is investors because they deploy their own money to develop these projects. The 3rd is definitely the bank granting the loans mainly subsidized loans. Our 4th partner is the tenant with who we share a percentage of the sales, so we have aligned interest. The last layer of partners is consumers because we provide them a community based project and they contribute in keeping us going in a certain community.

What is the most important skill gained managing clusters?
It is a continuous learning curve of understanding consumer behaviors and needs.

A lot of clusters have opened since the village, what do you have to say about this?
They are all interesting and well located. The market is still wide. The number of clusters is increasing within our company because it is our core business whereas the others which are our friends have other businesses on the side so they haven’t decided to develop a chain of clusters themselves eventhough they have the full capacity to do so.

Will it affect your market?
Every chair that you add to the market will affect the business but it depends on your target clientele.

How does seasonality affect your business?
Well, it depends on the project. A community project with high spending power like in Hazmieh where the local community travels a lot in August, goes to the beach or spends time in mountains is affected… However, the same period is rewarded by people coming from abroad such as expats and tourists. So seasonality does affect the market but there is always a feeding market that comes in when seasonality breaks in.

So you do take it into consideration in your studies?
Yes, we do. In July, we advertise in Middle East airline whereas in September we advertise in social media of Hazmieh or Dbayeh. We know which client to tackle and when…

Many in the industry have complained about people not being faithful customers. What do you have to say about this?
We have the most loyal customers in our projects because we are a community project. We are the neighbors of our customers.

Sneak peak of cluster growth strategies
We are currently developing clusters in Ramlet eL Bayda, Zahle, Beit Merri and Ajaltoun. We act as developers and operators.

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