Dubai: Buying gold in Dubai can no longer be about offering the most competitive price – instead, it should be an ‘experience’ in itself. The events of the last two weeks have reinforced the need for such a change in mindset, according to top jewellery industry sources.
During this period, gold prices rushed past $2,000 an ounce and then striding up to $2,050 plus before slipping down to today’s $1,989 (at 2pm, March 11). During these two weeks, gold buying at the shopper level dropped to near zero, as consumers – residents and tourists – were singed by the wild ride in bullion prices.
Through the better part of 20 years, Dubai’s status as the ‘City of Gold’ had been built on providing the most affordable prices for the widest possible range of jewellery. Even with the introduction of 5 per cent VAT and another 5 per cent import duty, that status of being price competitive remained.
Now, the time has come to recast shopper sentiments towards gold. “The recent changes to the customer profile have changed market behaviors,” said Abdul Salam K.P., Vice-Chairman at Malabar Gold & Diamonds.
“Dubai is known for that product innovation – that’s where the focus should shift to. Earlier, the price and promotion-oriented marketing worked well. The focus should change to the product, customer experiences and the ‘celebration’ around offering that experience.”
New shoppers, a new destination
In this thinking, a shopper, especially a visitor to Dubai, should think of a trip to a jewellery shop as a must-do, along the lines of a ride on Ain Dubai or any of the spots the city is famous for.
This is where a brand new destination built for gold and jewellery will help Dubai make that transition. The Gold Souk Extension in Deira sees itself as extending Dubai’s status as a global gold and jewellery hub, but crafted for a new shopper profile. A shopper who would feel comfortable within that space just as she would be at any of the luxury stores at any Dubai mall.
“The thinking is simple – if buying a Hermes bag or a Chanel dress in a mall is an experience, then buying gold and diamonds at Gold Souk Extension wants to be the same,” said a jewellery retailer who is soon opening a store at the destination. “This, as I see it, is the changing face of Dubai as the City of Gold.”
A space for all
Even as tourist-shoppers chase experience, those still wanting value over everything else still have the same stores to go to. But with gold crossing $2,000 plus twice in less than two years, and continuing to stick to $1,850 plus levels at other times, shopping for gold is proving a more expensive pursuit. The days of $1,700 an ounce price levels are from the distant past.
Creating experiences around gold buying also fits in with Dubai’s wider strategy – to be the destination of choice. “Thankfully, government policies help to bring in a lot of tourists to and to avail the best from the whole world seamlessly,” said Salam. “The gold industry should make use of the situation to their advantage and of Dubai’s.
“Jewellery buying should be one of the reasons for their visit to Dubai - and places like Gold Souk a must see in their itinerary.”
These have been used to describe gold’s virtues across generations, but before the pandemic, the millennials and Gen Z were not getting it. Then came the pandemic, and things did change.
“Gold’s race to $2,000 and over – twice in less than 18 months – is the best advertisement for shoppers,” said Anil Dhanak, Managing Director at Kanz Jewels.