Even a serious economic recession cannot stop the bling and buy set from reaching for their credit cards in the emirate.
Dubai's bling is recession proof
When it comes to accessories, some people in the UAE have always felt the need to have the glitziest, blingest phone, watch or car they can afford. Even in the present financial climate there are still those who want to spend, spend, spend. Despite the economic downturn, the luxury goods market has seen a steady stream of business, so much so that new products are continually appearing, each one trying to out-bling the rest.
The latest, launched this week, comes in the form of a bottle of water decorated with Swarovski crystals. Bling H2O, described as a "couture water" or the "Cristal of bottled water", is expected to take the country by storm. The bottles, dripping in crystals, are already a hit among the celebrities of the world and have now become a favourite with the high-end spenders in the UAE. "There is a lot of bling here [in Dubai] and we always want to support the bling," said Kevin G Boyd, a Hollywood writer and producer and the man behind the bottle. "At the moment there is no bottle of water that complements that type of lifestyle."
As befits the aspirations of the product, the bottles are being sold exclusively at Harvey Nichols in the Mall of the Emirates in Dubai. Naturally. Bling H20, according to an emphatic Mr Boyd, is a "must-have" for everyone, and the fact that the bottles are reusable means they are affordable, even in the recession. "You don't throw them away once you finish, you just refill them," he said. "There is a financial crisis and you can feel it, but the fact that these bottles can be refilled makes them affordable."
There are people who agree, like the Hollywood actor Ben Stiller who had 10 cases shipped to Mexico where he was filming, or the royal family of Dubai, who Mr Boyd said had ordered 2,200 bottles for a royal wedding in February. Yet with prices ranging from Dh180 (US$49) to Dh15,000 (for a design incorporating 10,000 crystals) the newest water on the market may be out of reach for the average consumer who would rather plump for the Dh1 bottle of local water for the time being.
The charity Global Water attempted to appeal to the consumer conscience, saying the price of the Dh250 bottle could supply a child in Africa with water for life. But the thirst for ever more extravagant products shows no sign of drying up. Not in the UAE at least. According to one market analyst in Dubai the city is seen by many companies as the perfect place to launch luxury products, one where the bling-hungry consumer never tires of looking out for the latest accessory to appear on the shelves. And the more "wacky" the product, the higher the demand.
"There is a certain level of desire here," said Neil Tunbridge, the head of retail at GRMC Advisory Services, a market research and analysis company based in Dubai. "In Dubai it's like, 'Let's build the tallest tower in the world'. It's unjustifiable, but if it's produced and is out of the ordinary, then there is a demand." Several retailers and brands are cashing in on this particular market. Since October 2008, when the financial recession started to make an impact here, high-end luxury suppliers have not only continued to launch new products, but have been so successful that they have had to extend their product lines.
Givori, which specialises in mobile phone art - which includes designing phones in crystals, jewels, or more recently, Italian leather - saw a 500 per cent increase in sales in the UAE for its new line throughout the month of May. "What we had been forecasting to sell over a period of three months was actually sold in just two weeks," said Samer Safsafy, Givori's brand manager. "We even ran out of stock for a week, forcing us to open a waiting list."
The new line, named Via Veneto after Rome's most expensive street for shopping, hotels and restaurants, takes mobile phones and covers them in custom made leather. Even with prices at Dh5,950 (for the classic line) and Dh10,950 (for the exclusive edition), Mr Safsafy says the demand is there. "Dubai is a hub for shopaholics," he said. "The idea that it is still tax-free draws people to come here."
Last year the company released a Dh16,300 gem-encrusted Nefertiti mobile phone covered in dozens of 24-carat gold-coated Swarovski crystals and vintage 1930s floral motifs and named after the wife of the ancient Egyptian pharaoh Akhenaten. Only 50 were made and all were released into the UAE market. The phones sold out and there is now a waiting list. Following these successes, Givori is planning a line to include custom designed BlackBerrys in September.
Who buys these items? According to Mr Safsafy, his customers are predominantly people from the Gulf or Russians, but more recently westerners have also been buying. Patrick Mulligan, the vice president of Motorola Middle East and North Africa, which also launched an exclusive range of 300 Aura mobile phones towards the end of last year, said the Dh7,850 product had been so successful that they were planning to launch two new brands: one next month and another in September.
"There is a demand for signature devices and luxury devices," he said, adding that the market for the phone, which is made of hand-polished stainless steel and holds a 62-carat sapphire crystal lens, was very mixed and included Arabs, Russians, Europeans and Americans. "It is targeted for a specific type of consumer because it is a luxury item," he said. "It is a statement defining their own style. We're not selling tens of thousands of them, but we're selling more than we initially thought."
According to Mr Mulligan, one of the reasons why this market is faring so well is due to the clientele. "The lower end of the market, such as High Street brands, is doing well and so is the higher end. It is the bit in the middle which is suffering," he said. "The premium-branded buyer who last year wanted to buy a Ferrari is now thinking it is no longer a good idea, but for the one with 20 Ferraris already it doesn't really matter and he's still waiting to buy the new one.
"It is the wannabe luxury user versus the confirmed luxury user," he added. "The ultra top end of the market is fairly impervious to anything, really." Mr Tunbridge agreed that the luxury goods market, unlike other markets, had remained stable throughout the crisis, largely because the demand was still there and the client base still existed. "It is a truism that no matter car, yacht or home, luxury goods have grown at a faster rate in this area," said Mr Tunbridge. "Dubai and the Middle East seem to be a magnet for those who wish to purchase and display."
Harvey Nichols is a clear example of how well the high-end market is doing. With customised, crystal-encrusted, gold-plated foosball tables selling for as much as Dh168,000 and gold-plated, bejewelled pens for Dh84,000, the store is a haven for big spenders. One sales assistant laughed at the mere mention of "recession" and replied: "There is no financial crisis with Harvey Nichols." And the fact is these pens and foosball tables do sell. So far three customised tables have been sold this year, one for Dh500,000 (it was decorated with 150,000 Swarovski crystals).
"This type of purchasing behaviour is global, but particularly prevalent in Dubai because people live in an unreal world," said Dr Raymond Hamden, a clinical and forensic psychologist at the Human Relations Institute in Dubai. "The mindset here is being able to differentiate themselves and market themselves. People will get into their four-wheel drives, have a meal and compare whose car is bigger, whose jewellery is more expensive and so on.
"Some people who can afford it like to buy luxury, to buy the best of the best," he continued. "They buy it because they think this is the social economic level that they are. 'If I look rich then I'm going to present a front of richness.' " In the end, according to Dr Hamden, it all comes down in many cases to showing off one's wealth. "They want people to know they have a lot of money by buying expensive objects, but then don't know how to deal with these things."