|Study Period:||2016 - 2026|
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The UAE luxury goods market was valued at USD 2,977.69 million in 2020, and it is projected to register a CAGR of 7.17% during the forecast period, 2021-2026.
As the luxury products market was mostly reliant on offline retail stores, with the onset of COVID-19, players realized the disadvantages of having only brick and mortar as their only sales channel. They started strategizing and diversifying their distribution channels. The majority of the players started developing their digital channels to reduce the buyer-seller gap. For instance, Richemont Group improved and developed its already existing digitized channel, which contributed 8% to the group's sales in Q1 2020 compared to 2% in Q1 2019.
The increasing number of wealthy in the UAE population willing to spend millions on lavish items and the booming travel and tourism sector would be driving the market extensively over the short term, post-COVID.
Due to overexposure on social media platforms and mass consumption, consumers expect personalized products or individualized care from brands. One out of every five luxury shoppers believes that customization or tailoring is essential for purchasing luxury goods.
Scope of the Report
Luxury goods are highly desirable products whose value in terms of price and quality is comparatively high. The luxury goods market in the United Arab Emirates is segmented by type and distribution channel. By type, the market is segmented into clothing and apparel, footwear, bags, jewelry, watches, and other types. Based on the distribution channel, the market is segmented into single-brand stores, multi-brand stores, online stores, and other distribution channels. A complete background analysis of the UAE luxury goods market, which includes an assessment of significant changes in the market dynamics, and the market overview are covered in the report. For each segment, the market sizing and forecasts have been done on the basis of value (in USD million).
|Clothing and Apparel|
|By Distribution Channel|
|Single Brand Stores|
|Multi Brand Stores|
|Other Distribution Channels|
Key Market Trends
Increasing Tourism is Proportionately Driving the Luxury Goods Sales
The United Arab Emirates is among the most visited countries in the world, and with the support of the regulatory bodies of the country, the tourism industry is witnessing a surge. According to the data provided by the World Bank, tourism in the United Arab Emirates increased by 7.96% over the recent years. The sustained growth of the Emirati luxury goods market can be attributed to the continuing rise in the tourism industry. The travelers visiting the country are from upper-class families and often buy luxury goods from the outlets of various multinational brands. The United Arab Emirates is an economically strong market, and therefore, major multinational brands often launch their premium products earlier in this country than many others. Tourists often come across things that the United Arab Emirates is famous for, such as perfumes and leather products. For instance, the luxury goods brand, Gucci, has a product portfolio in the country that comprises more than 29 variants of perfumes. Thus, as the tourism industry continues to grow, the luxury goods market in the country is likely to grow at a healthy rate, posing significant opportunities for the players to introduce their products in the local market.
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E-commerce Sales Picking Up Pace in the Sector Compared to Offline Sales
With the increasing digital adoption, e-commerce is becoming a reality, reinventing the road to purchase for customers, shaping new user interactions, disrupting business models, and creating new growth opportunities for single and multi-brand luxury goods stores in the country. As more customers move online, businesses are following suit, which led to the gradual development of the digital ecosystem. It has provided easy access to product-related information and prices to the customers, which further contributed to the overall growth of the UAE luxury goods market. In December 2020, Prada stepped up its digital campaign in the United Arab Emirates by redesigning the prada.com website, the brand's e-commerce platform and hub for editorial content. Retailers are increasingly using technologies, like augmented reality (AR), to help online customers improve their e-commerce experience. For instance, in 2020, Gucci adopted AR virtual platforms in its collaboration with Snapchat, allowing consumers to use Snapchat filters to virtually try on Gucci shoes. The Gucci/Snapchat campaign highlights the potential of AR for different e-commerce applications, and it is available in the United Arab Emirates, Saudi Arabia, the United Kingdom, the United States, France, Italy, Australia, and Japan.
The UAE luxury goods market is highly competitive, with the presence of both global and domestic players. However, the global players, including Rolex SA, Prada SpA, The Estee Lauder Companies Inc., Burberry Group PLC, show dominance over the market. Key players are now also focusing on social media platforms and online distribution channels for the online marketing and branding of their products, as the United Arab Emirates has the highest percentage of internet users who transact online. For instance, luxury goods specialized e-retailers, such as Souq.com, Awok.com, bloomingdales.ae, and Elilhaam, have witnessed rapid growth in their annual revenues, owing to an increase in the number of consumers shopping online. Online sales witnessed a boom, especially during the pandemic, due to social distancing norms and restrictions.
- In April 2021, Rolex added a new Day-Date, Datejust, Lade-Datejust, Cosmograph Daytona, and an Explorer to its Oyster Perpetual collection product range. Each product is unique and comes with its own set of design and usage metrics.
- In April 2021, Prada SPA unveiled a capsule collection dedicated to Ramadan and Eid al-Fitr. "Reflections" is a unique collection comprised of ready-to-wear shoes and accessories from the brand's Spring/Summer '21 collection, as well as a few items created specifically for the occasion. The Ramadan edit was curated specially for the region, and to observe the occasion, pieces from the Reflections series were spearheaded by Afra Al Dhaheri and Fatima Al Ameemi. The campaign was filmed against an urban background in the middle of the desert, drawing inspiration from the collection's interplay of light and shadow.
- In May 2020, CHANEL introduced a New Le Lion fragrance in the Middle-East seven months before launching in the global market. The product has a fragrance that is part of the Les Exclusifs range, with founder Gabrielle Chanel associating Lions as part of her birth date and being a source of luck.
Table of Contents
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
4.1 Market Drivers
4.2 Market Restraints
4.3 Porter's Five Forces Analysis
4.3.1 Threat of New Entrants
4.3.2 Bargaining Power of Buyers/Consumers
4.3.3 Bargaining Power of Suppliers
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry
5. MARKET SEGMENTATION
5.1 By Type
5.1.1 Clothing and Apparel
5.1.6 Other Types
5.2 By Distribution Channel
5.2.1 Single Brand Stores
5.2.2 Multi Brand Stores
5.2.3 Online Stores
5.2.4 Other Distribution Channels
6. COMPETITIVE LANDSCAPE
*List Not Exhaustive
6.1 Most Active Companies
6.2 Market Positioning Analysis
6.3 Company Profiles
6.3.1 Rolex SA
6.3.2 Prada Spa
6.3.3 Burberry Group PLC
6.3.4 Estee Lauder Company Inc.
6.3.6 Shiseido Company Limited
6.3.7 Kering Group
6.3.8 Compagnie Financiere Richemont SA
6.3.9 Breitling SA
6.3.10 L'Oréal SA
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
8. IMPACT OF COVID-19 ON THE MARKET
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Frequently Asked Questions
What is the study period of this market?
The UAE Luxury Goods Market market is studied from 2016 - 2026.
What is the growth rate of UAE Luxury Goods Market?
The UAE Luxury Goods Market is growing at a CAGR of 7.17% over the next 5 years.
Who are the key players in UAE Luxury Goods Market?
Rolex SA, Burberry Group plc, Loreal SA, Shiseido Company Limited, Prada SpA are the major companies operating in UAE Luxury Goods Market.