The UAE is being used as a launching pad to the wider Arabian Gulf region by clothing retailers, a study has found.
The country narrowly missed claiming the top spot in the global apparel index from AT Kearney, the management consultancy.
The index, which is based on sales, retail development and country risk, is led by China, followed by the UAE, Chile, Kuwait and Brazil.
"Since the last Retail Apparel Index in 2011, western apparel retailers have increasingly looked for growth from developing markets, where apparel spending remains strong as disposable incomes rise," said Michael Moriarty, an AT Kearney partner and co-author of the study. "E-commerce has also developed significantly for both local and international players."
The study identified the UAE as a launching pad for many retailers given the country's ease of doing business, large expat community and focus on tourism.
Several apparel retailers opened stores in the UAE last year - including brands such as Prada, Muji, COS, Gap, Pomellato, Calvin Klein, Juicy Couture and Destination Maternity, according to the AT Kearney study.
High-end stores such as Bulgari and Bloomingdale's have plans for Abu Dhabi this year.
"The UAE is critically located geographically, and the kind of policy the governments here have with increasing focus on tourism, it is no surprise the UAE is number two again," said Vishal Mahajan,the director of Dubai Outlet Mall.
"The rising population and safe environment all lead to this, and as we say retail therapy helps people to get away from problems such as inflation for some time."
Dubai Outlet Mall has about 260 stores - the majority in the apparel segment.
The world's largest shopping centre, The Dubai Mall, which attracted 65 million tourists last year, is undergoing a 1 million square foot expansion with a focus on its fashion portfolio.
Retail sales at The Dubai Mall rose 24 per cent last year compared with the previous, according to the developer Emaar.