Luxury goods market in the Middle East is growing at a steady pace, with Dubai accounting for about 30 per cent of the market, said a study.
The ‘Luxury Goods Worldwide Market study’ conducted by Bain and Company, an advisor to the global luxury goods industry, also pointed out that the UAE commands about 60 per cent of the luxury market in the region.
Cyrille Fabre, a partner who leads the retail and consumer products practice for the Middle East, said: “The Middle East is now the 10th largest luxury goods market with sales exceeding 6 billion euros ($7.7 billion).”
“Local consumption, intra-region tourism and the strong historic relevance of hard luxury and perfumes/cosmetics are key market drivers. Dubai is the heart of the regional market as the city alone commands around 30 per cent of the luxury market of the region,” he said.
Worldwide luxury goods market revenues will grow as much as 50 per cent faster than global GDP, with an expectation of 4 to 5 per cent growth in 2013 and 5 to 6 per cent annual average through 2015, said the study.
It confirmed that luxury revenues grew by 10 per cent in 2012 (at current exchange rates), given the strong growth tailwinds present in the first half of last year.
“We are seeing a more even distribution of global growth,” said Claudia D’Arpizio, a Bain partner in Milan and lead author of the study. “In turn, brands are refocusing from short-term, reactive hot spot thinking to long-term sustained growth strategies.”
Over the long term, the study estimates that the global luxury goods market in 2025 will likely be more than five times larger than it stood in 1995.
The key for winning in the luxury market over the next 10 to 15 years is “to get ready for Luxury 2.0,” where success will be defined by a relentless focus on three luxury goods management principles – superior customer experience, flawless retail management and people excellence, said the study.