Sales of luxury goods in the Middle East will outpace global demand this year as the market for fast cars, watches and jewellery grows a sparkling 15 per cent.
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In its latest report, Bain & Company, a global information consultancy, reports that spending on luxury products will grow a steady 15 per cent this year across the Middle East. Here is a look at who and what is driving that spending in the region.
q What are the biggest drivers of growth in luxury sales in the Arabian Gulf?
a Traditionally, the wealth derived from oil has always helped to buoy luxury sales in the region and this is still the case as many countries around the Gulf boast a GDP per capita that is among the highest in the world. In the past 18 months, this oil wealth has been redistributed to local populations in the form of infrastructure spending, wage increases and handouts that quickly made their way into the tills of luxury retailers.
How are luxury brands sold here?
The market here is largely dominated by franchise retailers that take on the naming rights to a brand, open stores and sell the goods. But there are some global brands that sign joint ventures in the Middle East, such as Burberry and Jashanmal Group. Some local retailers also have their own luxury branded stores and sell international goods, such as Paris Gallery and the Rivoli Group. The huge numbers of tourists that visit the UAE each year make up a large portion of spending in the country.
Which retailers are the biggest players?
The Chalhoub Group is one of the biggest players in the region, with 280 prestige brands, including joint ventures with Christian Dior and Louis Vuitton. The group is made up of more than 60 companies and has a presence in 14 countries across the Middle East. Al Tayer Group, through its Insignia company, is also a major player with 36 brands currently in its portfolio, including Bulgari, Boucheron, Bottega Veneta, Dolce & Gabbana, Emilio Pucci, Giorgio Armani, Gucci, Ligne Roset and Yves Saint Laurent. Bin Hendi Enterprises, owned and run by Mohi Din BinHendi, is an Emirati company with a great number of brands in the UAE. Rivoli Group also has 300 own-branded stores throughout the UAE, Oman, Qatar and Bahrain.
Where do car sales fit into forecast growth?
Car sales have accelerated across the UAE and wider Middle East this year, with Porsche, BMW, Bentley, Audi and Mercedes all reporting robust sales figures.
* Rory Jones