Sun, Sea and Growing Middle Classes: Middle East in Top 10 Global Luxury Markets

By Bizclik Editor

The Middle East has been recognised as one of the world’s leading regions for luxury goods and services in a study by Bain & Company.

The global luxury market is on target to reach €223 billion in 2014, aided by a five percent bump in growth this year. With the exception of Japan, China and South America, all markets are now strongly driven by touristic spending, with Chinese consumers bringing the most cash to foreign markets, spending abroad more than three times what they spend locally. 

The analysis reveals an increase in Middle Eastern consumption by 11 percent, continuing on the positive path of recent years, fueled by increasing tourism flows.

Claudia D’Arpizio, a Bain partner and lead author of the study, said: “With such cross-pollination of luxury spending, it no longer makes sense to think only in terms of geographies. The focus is shifting to consumers, with local trends and tastes representing only part of the picture.

“This new mind-set has important implications for luxury brands. It requires that they think about their product offering from a more global perspective, with the concept of seasons, a key pillar of this industry, becoming increasingly obsolete.” 

Cyrille Fabre, a Bain partner and leader of the Retail & Consumer Products practice in the Middle East, added: “While the international luxury market is affected by a number of causes such as the economic slowdown, unrest in various parts of the world, and currency fluctuation, the Middle East continues to demand luxury goods. The consumption of luxury goods has surged by 11 percent in the region, driven largely by rapid growth in tourism.

“The trend will continue to grow, especially in the GCC with the opening up of new malls and luxury brand stores in the next five years. In fact, the Middle East consumer base for luxury products is rapidly growing with a relatively stable profile. Among all luxury products in the region, the luxury car market and more particularly ‘supercar’ segment is predicted to post a solid growth.” 

Bain’s research finds that international travel and tourism is also creating an appetite for 360-degree luxury experiences, such as high-end transportation, including highly customized ‘super cars’ and yachts, as well as luxury hotels and cruises: 

  1. Growth in the luxury car market is solid, up 10 percent from 2013, driven by emerging markets, where luxury vehicles are still seen as a symbol of status and a social enabler. The high degree of personalization for vehicles and even after-sales services is helping to double or in some cases triple the basic price tag. 
  2. Hotels are benefiting from steadily growing demand, up nine percent. Younger generations (30+), who are seeking superior lifestyle experiences, helped to fuel 5 percent growth in the cruise market.
  3. Yachts are bouncing back at a low, positive single-digit pace (two percent in 2014), while private jet sales are up nine percent, boosted by emerging market demand. 
Share

Featured Articles

Exclusive: Making the UAE a global force in cybersecurity

His Excellency Dr Mohamed Al-Kuwaiti, Head of Cyber Security, UAE Government, on plans to build the world’s most secure digital society for a safer society

UAE cyber leaders – back to basics to prepare for the future

HE Dr Mohamed Al-Kuwaiti, Head of Cyber Security, UAE Government and Dr Aloysius Cheang, Chief Security Officer Huawei UAE, on the future of cybersecurity

Top 10: Procurement & Supply Chain LIVE speaker highlights

Global industry leaders descended on London for a two-day conference dedicated to shaping the future of digital procurement and supply chain

10 apps to improve wellbeing on World Mental Health Day

Leadership & Strategy

Meet the COO: Brook Sims of MAC Diversity Recruiters

Leadership & Strategy

Best business books to improve leadership strategy

Leadership & Strategy