Dubai: The UAE is still the hub for luxury retail in the region, but other emerging markets are beginning to develop their own offerings, industry experts at the Arab Luxury World conference in Dubai said on Monday.

Iran and India are attracting luxury retail brands and that is expected to continue in the coming years, according to Albert Momdjian, founder and chief executive of Sokotra Capital.

Companies are looking at Iran due to the high young population that are “thirsty for brands” and the strong number of affluent consumers, Momdjian said.

“There are three million affluent customers [in Iran],” he said. He added that the cosmetics market in the country is valued at $2 billion.

He expects that after the election of Indian Prime Minister Narendra Modi India’s economy will improve, which will help boost consumer confidence.

Sustainable growth

Dubai’s retail market is expected to have sustainable growth over the next three to five years, driven by a growing population, higher consumer spend and increasing visitor numbers, according to Alain Bejjani, head of business development at Majid Al Futtaim (MAF) Properties, a unit of MAF Holding.

MAF is behind Dubai’s Mall of the Emirates and Mirdif City Centre, among others.

According to the experts at the conference, tourists are driving Dubai’s luxury retail market, while UAE nationals are spending on luxury goods in international markets, such as Europe.

“They want to experience the brand in its most native environment,” said Cyrille Fabre, partner at Bain & Company Middle East. According to him, consumers in the Middle East have the highest per capita spending on luxury goods, at around €1,400 per year.

“The vibrancy of this market, however, has given light to a more cautious spending consumer, who shows high preference for well-known brands and logos. Their key luxury categories include leather goods, watches, cars and overseas holidays,” Fabre said.

Dubai accounts for 30 per cent of the region’s luxury market, he added.

Tourists account for 60 per cent of Dubai’s luxury sales, says Momdjian. Dubai Mall attracted 75 million visitors last year, of those 40 per cent were tourists.