Mena region shoppers love to indulge in a bit of luxury
Rémy Oudghiri, the Paris-based director of trends and insights at the market research firm Ipsos, says the company’s latest survey shows that luxury is considered an innovation in this part of the world. Here, Mr Oudghiri and Julien Hawari, the chief executive of Mediaquest – the company organising the first Arab Luxury World conference today and tomorrow – reveal more about the global and local luxury market.
Tell me more about the report.
Rémy Oudghiri: We did the survey on the luxury goods market in the UAE and Saudi Arabia. The field work was done between December and March. We surveyed 1,009 individuals in the UAE equally spread across Dubai and Abu Dhabi, who represent the top 30 per cent of the population based on income. We surveyed 803 people in Saudi Arabia across Jeddah and Riyadh, who represent the top 15 per cent of the population there. In Saudi Arabia, 80 per cent of those surveyed were Saudis and the rest Arab expats. In the UAE, 40 per cent were Emiratis and the rest Arab expats. We wanted to find out about people’s expectations, what their definition of luxury is, what the major sales drivers are besides making people understand the market here, how to meet customer expectations, and what types of messages attract customers.
Your world luxury tracking covers 15 countries, including the United States, Brazil, Europe, China and Russia. What did you find out about the market in the UAE and Saudi Arabia?
RO: We saw that perfumes were the most purchased items for both men and women. The most striking thing in the Middle East compared with other countries is that luxury is seen as an innovation here. In other countries, such as Europe and Japan, luxury items are related to tradition. In China, they see it less as an innovation and more as a social status, and a vision of personal success. In the United States, it is also about social success. For instance, in the Middle East technology is seen as a luxury whereas in the US or Europe technology is a commodity. Moreover, we also found an optimism among the consumers, a positive outlook for the future, that things are going to get better. The mood is different elsewhere. In Europe, there is a lot of pessimism and worries about globalisation. But optimism is a key for consumption.
According to the survey, luxury is considered a part of daily life and consumers see it as a way of pampering themselves from time to time. Which luxury categories did you use in the survey?
RO: We had 20 categories and of these the popular ones in these two countries surveyed are perfumes and beauty products; fashion, which includes clothes, shoes, eyewear and leatherwear; watches and jewellery.
What made these the most popular categories?
RO: Because people want to enhance their appearance, which is seen as a part of their personality. The survey shows two-thirds of people are buying perfumes on a regular basis, two-thirds are buying clothing, and half of them watches.
What luxury consumer trends did you notice?
RO: For many people luxury is leisure, and usually they shop for luxury with their families or friends. So it is social here, unlike in Europe. Also they like buying in their own countries, unlike in China and Brazil. And they like to buy it in their physical stores such as in malls because it’s social for them. In China, they are more keen on buying online.
What is the Arab Luxury World conference about?
Julien Hawari: This is a business-to-business conference that will bring together brands, distributors, retailers and mall operators from the Middle East and North Africa region besides research agencies. The Middle East and the Gulf have reached a threshold where information about this market has been lacking. We want to hold it once every year to look at the trends.
How big is the luxury market here?
JH: Today, Dubai accounts for 30 per cent of the sales of luxury items in the Middle East, according to a report from Bain and Company [last year]. In the region, the market can be worth anywhere between US$10 billion and $20bn, depending on the category of the luxury item in the Middle East.
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Updated: June 1, 2014 04:00 AM