Dubai: Karl Lagerfeld, the high priest of fashion, is setting up shop in the UAE and Middle East markets – an online shop, to be precise. There’s the German label Hugo Boss, which too is aiming for visibility among its regional shopper base through an online store.
The Swiss shoe and accessories brand Bally is another that’s taking the virtual route for its local shoppers, done in alliance with its partner, the Jashanmal Group. Now, all of these brands were already available online for the fashion-conscious to make an order for the latest launch or design.
But what’s different now is that these brands are introducing standalone digital stores for these markets, rather than waiting for UAE or Gulf shoppers to place their orders with their virtual stores elsewhere. High-end fashion and accessories is getting all hyper-localized.
“To date we are serving 58 countries worldwide with our e-commerce -to build digitally relevant regional platforms, we had to take our time and to find the right partners,” said Nicolas Girotto, CEO of Bally. “Through our partnership with the Jashanmal Group, we intend to be even closer to the Middle East market. Currently, Bally.ae services all of the countries of the Gulf area, plus Lebanon, Jordan and Pakistan.
“We have a strong relationship with Jashanmal, and our objective is to develop offline and online business through our decade-long partnership. We have always had an important presence in the market thanks to strategic collaborations with key e-tailers such as Ounass and The Level through Jashanmal.”
According to luxury market sources, what’s been happening over the last two years, and more so after the COVID-19 disruptions, is for brands to try and take direct ownership of their selling in all key markets. This way, they have better control on pricing, offers and seasonal promotions.
“Nothing is more irritating for luxury brands than not have control on pricing and discounts,” said a retailer. “We have seen this in other markets – it’s now reached the UAE and Gulf, which remain one of the biggest markets for luxury.”
For Karl Lagerfeld’s e-stores, it’s the Chalhoub Group that will operate them in a franchise partnership. The Dubai-headquartered Group has had decades of experience in selling the finer things through its physical stores. The ‘KARL-ME.COM’ launch is thus a natural progression as the Chalhoub Group widens its interests in digital-land. “The microsite will further drive the brand’s digital approach and offer a tailor-made experience for visitors in the Middle East,” said a statement at the time of the launch late last month.
50%Share of fashion in all non-grocery related retail sales in UAE
Space to grow
High-end fashion and accessories is one category where the region’s biggest online marketplaces such as Amazon do not dominate. Instead, platforms that have a highly defined focus on this category – the likes of Namshi, Ounass, and Net-a-Porter – are the main drivers.
In a market such as the UAE, fashion sales, whether through a store or online, make up 50 per cent of all non-grocery retail sales. In Saudi Arabia, it would be in the 40 per cent range.
euro200millionHugo Boss's annual online sales went past this sum for first time in 2020
According to a recent update from RedSeer consultancy, “The online fashion retail market is driven by omni-channel retailers. Fashion verticals are increasingly capturing a larger portion of the market with a wide variety of products at a competitive pricing.
“Online marketplaces, despite their large user base, do not see strong traction for fashion products as they focus on evergreen products.”
“We had seen an increase in foot traffic since fourth quarter last year, seeing a peak of visitors over the holidays when Dubai experienced a high level of international tourism," said Nicolas Girotto, CEO of Bally.
"As we roll-out our e-commerce presence, we are also considering our store network, especially in light of evolved consumer behaviors. Opening new stores will mean aligning with locations that represent the shopping destinations of the future.
"The Middle East has been a leader in creating shopping malls that are truly lifestyle hubs, offering culture, entertainment, and dining alongside boutiques. We are planning to open five more stores over the next three years in Saudi Arabia."