190502 gold prices
The Gold Souq is the DNA that built up to Dubai's 'City of Gold' status. Now, that theme is getting a refresh as Dubai's gold trade starts catering to a new generation of shoppers. Image Credit: Zarina Fernandes/Gulf News

Dubai: It did not take Dubai long to connect the dots from ‘shopping’ to ‘gold’.

If the ‘Dubai Shopping Festival’ launch in February 1996 was the first organised move to establish Dubai as the shopping capital of the region and beyond, then 2003’s ‘City of Gold’ forever set up Dubai for everything to do with the yellow metal. In many ways, the DSF events can be seen as the natural progression for Dubai’s aim to be nothing less than the ‘gold city’.

Think about it – the DSF promotions that had daily raffle draws for jewellery shoppers, and then the chance for someone to pick up the ultimate prize – in kilos of gold. The period from 1996 to 2003, which was when the ‘City of Gold’ branding was unveiled, thus established Dubai as the place to pick up gold and jewellery at the most favourable prices.

One particular location in Dubai is forever linked to Dubai’s ambitions – the Gold Souq in Deira. “The Gold Souq had grown to establish itself as a centre of attraction that holds several tonnes of gold at any given time and millions of carats of gemstones,” said Tawhid Abdullah, Chairman of Dubai Gold & Jewellery Group. “In keeping with this reputation, naming Dubai as the ‘City of Gold’ was a natural choice.

Dubai Gold Souk: Everything You Need to Know Irish Eden Belleza, Video Editor and Yousra Zaki, Assistant Editor Features

“Dubai has long been a hub for gold and jewellery. We’ve had had traders from India and other parts of the world set up shop in Dubai. It is well-known that Dubai is a major import and export destination.

“What is not widely known is that we are one of the fastest-growing exporters of jewellery. Today, Dubai trades Dh84 billion worth of rough and polished diamonds. The jewellery manufacturing in the country uses about 70-80 tonnes of gold for 18-, 22- and 21- Karat jewellery that is manufactured in the UAE.”

Dubai had the Gold Souq to begin with, and then with DSF and later the 'City of Gold' branding, Dubai was able to capitalise on its strengths. Pictured here is a file image of Tawhid Abdullah of Dubai Gold & Jewellery Group, and Laila Suhail, CEO of Dubai Festivals and Retail Est.. Image Credit: Gulf News

New times, new messaging

The Dubai Gold & Jewellery Group is all set to announce a major branding update to the ‘City of Gold’, expected to be unveiled in the next few weeks. It will come out at a time when tourists will once again return to Dubai – and to the Gold Souq, which until the COVID-19 eruption last year was one of the city’s most popular visitor sites. (It was also one of the most expensive piece of real estate for retailers outside of Dubai’s most prestigious malls.)

For many retailers at the Gold Souq, selling to tourists make up 50-80 per cent of their annual sales, which is why the cancellation of flights last year had a devastating impact on them.

The Dubai Gold & Jewellery Group had a lot of time in these last few months to think of what needs to change in getting back shoppers’ attention and the best ways to go about it. The plan is to shift the concept’s focus from just Dubai being the most price-competitive place to buy gold. Instead, the new focus will be of Dubai and its jewellery retailers being at the cutting-edge of designs and new concepts.

“The City of Gold theme means a lot, not just to us as retailers but to the leadership, tourism bodies and other related jewellery businesses as well,” said Joy Alukkas, Chairman of Joyalukkas Group, and one of the first to create a network of jewellery stores in the city from the early 1990s. “City of Gold gives every retailer an opportunity to showcase their works to the world and to the millions who come to Dubai to experience this statement.

“It also offers a platform for all jewellery businesses to unite, work together, innovate, support each other and maintain Dubai’s position as the ‘City of Gold’.

In terms of pricing, there is no difference between Souq and outside. However, for a tourist, Gold Souq is not just a shopping destination but a new experience altogether. Most tourists feel a trip to Dubai without a visit to the Gold Souq is incomplete

- Joy Alukkas of Joyalukkas Group

Focussed selling

For Anil Dhanak of Kanz Jewels, if Dubai is the city of Gold, then the Souq has to be its very centre – the heart beat of the trade. “The average annual footfall at the Deira Gold Souq is at par with any big sized mall in the UAE,” he said. “Unlike at a mall, which has shops selling all kinds of activities, the Gold Souq focuses only on jewellery. As a result, the daily footfall at a jewellery store in the Souq far exceeds the footfall of such a store in a mall.

“If a visitor at a mall is able to see hundreds of designs of jewellery, at the Gold Souq, she can see thousands. For tourists in the past and in the future, a visit to the Souq is a must-do activity – that charm will never be lost.”

Still priced well

While Dubai and its Gold Souq retailers await their tourist shoppers, one thing will remain a constant – Dubai’s pricing will remain hyper-competitive.

“The difference in prices is predominately in the making charges and taxation rates,” said Baiju Kuireash, a consultant to the Dubai Gold & Jewellery Group. “For example, India is the second largest gold market in the world - but the customer ends up paying 12 per cent import tax and 1 per cent VAT on gold.

“When we compare this to the UAE, besides the 5 per cent VAT and perhaps a small processing fee, the customer is not saddled with any add-on payments. That translates into a tremendous saving. Of course, plus there are all those designs.”

The number of outlets we have in Deira Gold Souq gives shoppers the opportunity to explore the widest range at a single location which would not be possible even if our stores were spread out across different malls

- Anil Dhanak of Kanz Jewels