Feel-good businesses are here to stay

Last week, I was driving down Jumeirah Beach Road and was astonished by the number of new treatment centres that have opened in the Jumeirah and Umm Suqeim areas. What was more interesting were the kinds of new clinics, where they have less to do with medical health and more to do with either cosmetic procedures or holistic living.

I must admit to being an avid fan of such indulgences. Some of them are: acrylic nail extensions, acupuncture massage, Ayurvedic consultations, chemical peels, chiropractic adjustments, cosmetic dental care, laser hair removal, microdermabrasion, oxygen facials, reflexology, waxing and so on.

Naturally after 2008, many like me have curbed their usage of such services. What is astounding however, is that the prices of these services seem to be stuck in the pre-recession era and magically land somewhere between Dh275 and Dh350.

Even though the downturn managed to topple the prices of most services, somehow the organisations within the cocoons of Jumeirah were not touched and, in fact, continue to grow. When you compare local prices for a chiropractic adjustment or laser hair removal to international prices, Dubai's prices are easily 15 to 20 per cent higher.

To understand why, evidently the first place to look is at operating costs. A commercial villa's rent is anywhere between Dh300,000 and Dh700,000 a year in these areas. Unsurprisingly, companies looking to be profitable will pass these costs onto the consumer in the form of inflated prices.

Contradiction

But my query is deeper than that.

Even though snob goods are somewhat inelastic in nature — despite dropping sales in other luxury industries such as cars, yachts, holidays and couture brands — one has to wonder how demand is able to sustain these "look good, feel good" services.

At a time when low-cost airlines, public transport and mass clothing store sales have increased, it is nothing short of a miracle that some of the Jumeirah-based service providers are not only able to charge inflated prices, but also open many new locations over the last two years.

Obviously businesses are sustainable only as long as there is demand. So the big riddle then is — despite inflated prices, what are the factors driving demand.

Perhaps understanding a consumer's perception of control might be a starting point.

Most of these organisations provide services that make people feel good about their appearance. Ask any new expatriate what they think of Dubai and one of the first things they will tell you is that everyone in Dubai is preoccupied with the way they look.

Some scoff at this tendency. Fashionistas love it. Some even avoid it. But everyone is aware of it.

Perception of power

Given that these services affect the way people look, consumers want to make sure they get quality. An institution's legitimacy and professional demeanour is important.

Like any developing economy, there is a lack of standardisation and base line regulation for such new industries. In its absence, people tend to equate high prices with higher perceptions of quality.

Naturally no one wants a bad facelift.

The second reason is perhaps more poignant. The UAE encourages ambition.

It is a rambunctious consumer-driven society. Add to that petro-dollars, hard work and adrenaline, and you are left with consumers who like to feel powerful.

Unlike the rest of the world, consumers within the UAE feel like the captain of a ship when they part with hard-earned cash. Their self-image shoots up and they feel like a king.

It is no wonder that when one drives past the small neighbourhood behind Shaikh Zayed Road, glistening sports cars grab one's attention.

Our culture has become obsessed with the way we appear to others. The pleasure derived from the ability to show oneself off has made us masochistic enough to enjoy paying through our nose for that gratification.

Well, as long as consumers are living within this external locus of control, perhaps now is the time to invest in a cosmetic surgery clinic. Any takers?

- The writer is a UAE-based entrepreneur.