Global luxury goods market reaches Dhs1 trillion
Crisis? What crisis?! After the doom and gloom of the past near-decade, it seems that things are well and truly on the mend - well, in the luxury market at least.
A Regional Luxury Outlook Report, published by consultancy firm Bain & Company, has been released stating that the global luxury goods market has surpassed the one trillion dirham mark, and is still growing.
Despite the slowdown of the 2008 global economic crisis, the global personal luxury market has grown from Dhs268 billion in 1994 to over Dhs914 billion in 2016.
The report explains that while luxury experiences are outpacing goods in growth in 2016, the numbers indicate that the UAE retail market declined as a whole in the same year. The word nobody wants to hear [‘recession’] is uttered in the most silent of tones.
Bain & Company
According to the report Bain & Co. spoke to a leading GCC luxury retailer who stated that: “We grew at 15% p.a. for 10 years, then we grew at 2% in 2015 and we declined in 2016, Q1 2017 is still negative especially in KSA” Another KSA-based beauty retailer remarked that its “sales intensity collapsed by 40% in Q1, but we see some glimmer of hope since the allowance re-instatement” [referring to allowances on salary packages].
While KSA, the largest economy in the GCC is slowing down, largely due to low oil prices, over spending, mega projects and its inability to effectively introduce a contingency scenario for tough economic times. The United Arab Emirates, and its shining star Dubai, continue to gather momentum as a global luxury hub.
According to the report, Dubai is in the top 10-15 top luxury cities in the world. Global brands increasingly want a prominent presence here, this is fuelled by major touristic flow, retail infrastructure and improving enabling eco-system.
The city continually strives to make business easier and lure international brands. The creation of the Dubai Fashion council with six principles, Educate and Develop, Organise and Participate, Sponsorship and Endorsement, Marketing and Trade Promotion, Study and Research & Policy and Strategy. Along with the Dubai Design District, world class Fashion events and fashion schools all fuel the growth of popularity. Major cultural events such as Design Days, Art Dubai put the city on the global fashion and cultural map.