United Arab Emirates (UAE) Luxury Goods Market Overview, 2029

The United Arab Emirates (UAE) has evolved as a thriving centre for luxury products, thanks to a variety of factors shaping its ever-changing market landscape. Fashion takes centre stage in this area, with streetwear gaining popularity alongside the persistent attraction of renowned luxury labels. Furthermore, there is a noticeable trend toward personalization, as discerning customers seek out bespoke experiences and demand limited-edition items that reflect their unique likes and preferences. The rise of athleisure reinforces this trend, appealing to health-conscious customers who value both style and practicality in their clothing choices. Luxury goods distribution in the United Arab Emirates (UAE) is primarily based on three channels. For starters, luxury department shops like the famed Dubai Mall and Mall of the Emirates serve as vital centres for major luxury companies, providing discerning clients with a varied choice of merchandise. Second, brand flagship stores strategically placed in key locations throughout the UAE appeal to affluent customers wanting premium experiences and personalised services. These standalone stores not only highlight the businesses' exceptional collections, but also strengthen their brand identity and exclusivity. Third, the rise of e-commerce platforms has transformed the luxury retail scene, with online retailers such as Net-a-Porter and rising regional competitors gaining substantial traction with tech-savvy customers. According to the research report “UAE Luxury Goods Market Overview, 2029," published by Bonafide Research, the UAE Luxury Goods market was valued at more than USD 950 Million in 2023. Cultural factors play an important part in driving the UAE's luxury sector. The country has a sizable rich population, led by a high concentration of high-net-worth individuals whose spending power drives demand for luxury items. Furthermore, Dubai's status as a global tourist destination attracts a regular stream of luxury shoppers drawn to its opulent appearance and various retail options. The prevalent gifting culture, in which costly gifts are distributed for major occasions and milestones, boosts sales and keeps the market growing. However, the market is not without obstacles. Economic variations, particularly those resulting from variable oil prices, can have a considerable impact on consumer purchasing habits, putting the luxury goods sector's stability at danger. Furthermore, severe rivalry remains in a saturated market controlled by established competitors, necessitating new brand differentiation and client engagement techniques. The growing influence of e-commerce is yet another disruptive force, forcing luxury businesses to strengthen their omnichannel presence and adapt to changing consumer tastes in the digital sphere. In terms of policies and laws, the UAE provides an ideal climate for luxury businesses to prosper. Favourable government regulations, such as tax-free zones and foreign investment incentives, attract top luxury brands looking to establish a presence in the region. Furthermore, limited import limitations ease seamless operations and allow multinational companies to enter the market quickly, adding to the UAE's allure as a profitable place for luxury commerce.

When categorising luxury goods, various product types play a significant role in defining the market. Clothing and apparel represent the broadest category, encompassing a wide range of items worn on the body, such as shirts, pants, dresses, and jackets. Jewellery holds its distinct category, comprising ornamental objects worn for decoration, including earrings, necklaces, bracelets, rings, and brooches, often crafted from precious metals, gemstones, and pearls. Watches, as timepieces worn for both functional and fashion purposes, form another essential product type within the luxury sector. Footwear, covering a variety of shoe types like boots, sandals, and slippers, provides both protection and style for the feet. Bags, including handbags, backpacks, and clutches, serve as containers for carrying items and have been steadily growing in demand within the luxury market. Other types of fashion items, such as hats, scarves, belts, and sunglasses, fall under a broader category, offering additional avenues for luxury consumption. Regarding end users, luxury goods cater predominantly to women, with a wide array of products tailored to their preferences and tastes. However, the market for men's luxury items is also significant, offering tailored suits, accessories, and grooming products to discerning male consumers. The segment catering to children is growing steadily, with luxury brands expanding their offerings to include kid-friendly apparel, accessories, and toys. In terms of distribution channels, retail stores remain the leading avenue for purchasing luxury goods, encompassing both standalone boutiques and multi-brand retail stores offering curated selections of luxury items. Luxury boutiques and e-commerce continue to gain traction. Expo 2020 Dubai was a notable platform that drew high-spending visitors, considerably benefiting the luxury retail industry. The event's international popularity and significant marketing efforts drew tourists while also providing lucrative opportunities for luxury firms to promote their wares. This inflow of tourists resulted in an increase in revenue, notably in the premium to high-end segments, where customers sought exclusive and opulent experiences. Furthermore, Expo 2020 Dubai served as a catalyst for presenting the region's grandeur and elegance, reinforcing its status as a luxurious resort. Fashion weeks in Dubai and Abu Dhabi have grown as major events on the global fashion calendar, allowing both regional and international designers to showcase their designs. These events not only highlight the region's vast diversity of talent, but also attract international buyers, creating collaborations and partnerships in the luxury fashion sector. The exposure received from these fashion weeks improves the prominence of local designers and companies on the global arena, generating demand for luxury goods in the region and beyond. In terms of pricing and segmentation, Dubai's luxury market serves a diverse variety of customers, from premium to high-end. The average selling price (ASP) varies by brand and category, reflecting consumers' various preferences and purchasing power. Established players dominate the market with classic designs and exceptional craftsmanship. However, the industry is seeing the development of new competitors, including local and regional brands, with unique design aesthetics that resonate with customers' changing tastes. These new entrants bring new insights and unique ways to luxury fashion, pushing incumbent competitors and enriching the market landscape. When compared to its regional equivalent, Saudi Arabia, the UAE has a more mature luxury market with a larger brand presence and well-developed infrastructure. However, Saudi Arabia has enormous potential, thanks to its expanding youth population and disposable income. Despite its good possibilities, Saudi Arabia has tougher rules, which provide hurdles for luxury firms seeking market access and expansion. Navigating these complex distinctions is critical for luxury businesses looking to maximise on the particular potential each market provides while staying within legal limits. Because of its limited domestic production capabilities, the UAE's luxury goods business relies significantly on imported raw materials. This reliance on international suppliers opens up lucrative prospects for foreign firms to enter the market and form strategic alliances with local distributors. International vendors can supply the growing demand for luxury goods more efficiently by exploiting the UAE's excellent logistics infrastructure and friendly business environment. Furthermore, establishing relationships with domestic stakeholders can improve supply chain efficiency and streamline production processes, cementing the UAE's position as a leading luxury market in the region. The COVID-19 outbreak initially caused a drop in luxury retail sales in the UAE, as rigorous restrictions affected traditional brick-and-mortar operations. However, this struggle fueled a dramatic acceleration in e-commerce growth, as consumers increasingly turned to online channels to meet their buying needs during lockdowns. As a result, luxury firms quickly shifted to digital tactics, utilising omnichannel techniques to engage consumers and maintain brand relevance. As the market gradually recovers from the pandemic's impact, the luxury retail sector's resiliency demonstrates its adaptability and long-term appeal.

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Manmayi Raval

Research Consultant

Considered in this report • Historic year: 2018 • Base year: 2023 • Estimated year: 2024 • Forecast year: 2029 Aspects covered in this report • Luxury Goods market Outlook with its value and forecast along with its segments • Various drivers and challenges • On-going trends and developments • Top profiled companies • Strategic recommendation By Product Type • Clothing and Apparel • Jewellery • Watches • Footwear • Bags • Other Types

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By End User • Women • Men • Children By Distribution Channel • Retail Stores • Multi-Brand Retail Stores • Luxury Boutiques • Online Retail The approach of the report: This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources. Intended audience This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Luxury Goods industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.