Luxury goods sector sees robust future ahead

ALKESH SHARMA / Emirates Business

Fluctuating oil prices and weakening sentiments of consumers are no
deterrent for UAE’s luxury goods industry that is expected to register
an exponential growth in the coming months. Driven by high-income
population and increased footfall of tourists, luxury goods industry in
the UAE is expected to witness an over 20 percent growth by 2017-end, affirm experts.
“We have prosperous locals, who are well-travelled and love to purchase luxury products, and ultra-rich expats, especially westerns, who do luxury goods’ shopping while going on holiday to their home country. All these factors collectively offer a very cohesive ecosystem for luxury goods industry to grow in the UAE,” Merlyn Flower, a luxury goods retailer, based in Dubai, told Emirates Business.
According to Euromonitor International report findings, the best performing categories in the UAE continued to be luxury leather goods, luxury jewellery and timepieces, super
premium beauty and personal care, designer apparel and footwear (ready-to-wear) and luxury accessories. The report said that luxury goods continued to be driven by consumers who look for supreme quality and well established and known brand names that are synonymous with high prestige and long-term
investment.
“Besides residents, we have tourists, especially Russians, Brits and Chinese, who are the major buyers of luxury products from the UAE. However, in 2015, we witnessed a dip in Russian tourists coming to buy luxury products from UAE, probably due to the falling oil prices and weakening of the rouble,” stated Flower.
Euromonitor report stated that residents and tourists alike continue to favour top level international luxury brands and prefer to buy products that express supreme quality over price. Rolex, Cartier, Louis Vuitton, Dolce & Gabbana and Gucci are major brands that continue to lead luxury goods in the UAE due to their strong brand heritage and strong presence in the demanding categories of luxury leather bags and timepieces.
Interestingly, UAE is not only famous for its residents’ penchant to buy luxury goods but its cities are also considered the best destinations in the Gulf Cooperation council (GCC) region for luxury shopping.
Findings from a recent survey commissioned by American Express Middle East across five GCC countries proved that Emirates ranked as the number one destination for luxury shopping in the region. Nearly 43 percent of the survey’s respondents selected Dubai as their favourite place to shop for luxury items, and it was followed by Abu Dhabi, Doha and Kuwait City.
Mazin Khoury, Chief Executive Officer, American Express Middle East, said, “Despite the economic headwinds across the region, our research shows little slowdown in the volume of spending and we have seen a pretty significant redistribution in how people are spending their disposable income.”