Middle East is one of the three emerging markets that is expected to post high growth in luxury in the coming two years, after a slow growth in the last two years. UAE is expected to lead the region’s luxury market, notwithstanding the introduction of VAT.
One of the sectors that’s leading this growth for the region is hospitality and UAE and Saudi Arabia are key contributors. The recent social and economic liberalisation wave in Saudi Arabia will increase the Kingdom’s share. The upcoming Arabia Travel Market (22-25 April) will be a good indication of travel and hospitality industry’s performance in the year ahead. With the tourist visas for Saudi opening up after decades; it will great to see the inter-regional and global tourist numbers in the coming years.
Urban planning in Dubai continues to provide more luxury locations like the Dubai Canal and Creek Harbour. As the hub for the region; it is anticipated that the tourist numbers will continue to go up with buoyed growth on world markets. VAT may have the impact on luxury purchases by international buyers but as the rate is relatively very low; we do not foresee this to be impacting any trend.
Dubai boasts of many luxury lifestyle trends and amongst them Super Car clubs deserve a special mention as gathering of uber rich. Ninth Degree Super car club is one of the most sought after clubs with highest value in car values and for their private events. Catch the Camel; that’s coming up in 2 weeks will be all over social media engaging high net worth individuals and it offers some unique opportunities for luxury brands to engage with their target market.
We are witnessing broad changes in luxury market behavior globally. Consumers are aspiring for luxury experiences and not just physical luxury. Investing in a holiday with unique experiences or attending exclusive events is on par with acquiring luxury items like watches or jewelry. This trend has created many luxury clubs that facilitate exclusivity for their clientele. On the other hand, younger generation are expecting luxury brands to cater to their personal style preferences rather than simply following brand driven trends. Gucci sneakers is an example of this need. They are also more willing to mix and match luxury and street brands. Luxury buying behavior has undergone changes and paying for a high-priced luxury item on a digital platform is commonplace now. The recent tie-up between Chalhoub and Farfetch is seen as a response to this trend. At the store level, brands are revamping the environment to better suit the technology savvy consumers.
With luxury being redefined, brands must adapt the way they target, sell and retain their consumers. Digitalisation need to combine efficiency at scale and providing customised experience.