Dubai: It’s only 8.30am and a kilometre-long queue of eager shoppers has already formed outside the Zabeel Hall in World Trade Centre. The crowd is waiting for the start of a private sale of heavily discounted luxury goods, ranging from Michael Kors bags to Lacoste shoes and Estee Lauder or Dolce and Gabbana makeup.
Huge crowd turnouts for special sales events like this is quite common in Dubai, and it’s proof of just how much UAE residents love premium or designer items. It’s also a manifestation of consumers’ love for “value for money”.
Middle East shoppers are among the biggest spenders on luxury goods, accounting for 8.1 billion euros (Dh 34 billion) in spend for 2015, the tenth highest in the world. Analysts say the demand for premium and top-of-the -line products remains strong in the Gulf Cooperation Council (GCC) region despite the economic slowdown.
According to a report by Bain & Company, worldwide luxury spending surpassed 1 trillion euros (more than Dh 4 trillion) in 2015, with the Middle East listed among the top 10 big spenders
The biggest benefactors of luxury expenditure are accessories, accounting for 30 per cent of the global market and growing by 3 per cent in 2015. Clothing is the second-largest category, capturing 24 per cent of the market and posting 2 per cent growth.
Consumers in the region don’t just love high-end handbags, perfumes or cosmetics, they also have a huge appetite for much-bigger luxury ticket items like yachts or posh apartments.
In Cluttons’ 2016 Middle East Private Capital Survey, it was found that real estate continues to be a preferred investment route for the GCC’s high net worth individuals (HNWIs). About 63 per cent of HNWIs from the Arabian Gulf plan to invest in locations such as Dubai, Abu Dhabi, and Sharjah, according to the survey, which was conducted in partnership with YouGov.
However, as evidenced by the huge demand for designer brand sales in UAE, consumers now pay more attention to value, rather than just the brand or product itself. The trend applies not just to retail shoppers, but also to those who are on the lookout for big ticket items.
“The demand for luxury brands in the UAE and in our region is always prevalent. [But] the regional consumer is becoming more knowledgeable and inquisitive, which in turn affects their preferences for particular purchases,” said Abdulmagied Seddiqi, chief commercial officer at Seddiqi Holding.
“The market for luxury products is not dissolving, but evolving,” says Erwin Bamps, CEO of Gulf Craft, one of the world’s leading superyacht shipyards. “So it is not a question of where the money is going, but rather how customers are choosing to spend it.”
Within their business alone, Bamps says, it is clear that consumers don’t just open their wallet without doing their homework first. “They do their research before coming to us.”
With the current slowdown, there are indeed opportunities to score some bargains, and consumers are encouraged to take advantage of it. “[This could be the best time to make a [purchase] because of the prospects presented by current market conditions – lower prices, greater value,” said Cesar Latrilla, CEO of Engel & Volkers Dubai, a service company specialised in the brokerage of high-end real estate and yachts.
