Gulf luxury industry stagnates to ‘new normal,’ conference hears
Changing and challenging times led discussions from the beginning of the two-day Arab Luxury World conference
The luxury goods business in the wealthy Gulf region is seeing a “new normal” marked by single-digit growth and more competition, a top executive of an upscale Dubai-based retail giant told the Arab Luxury World conference on Wednesday.
“For a long time, the Gulf luxury market was perceived as easy when demand was high,” Patrick Chalhoub, the co-chief of Chalhoub Group, which operates a large number of brands in the region through 650 stores.
“But today, the situation has changed. It is becoming more challenging with growth decreasing to the low single digits,” Chalhoub said.
Changing and challenging times – brought about by low oil prices, greater market maturity, and shifting consumer tastes – led discussions from the beginning of the two-day conference, held at one of Dubai’s countless five-star hotels.
Luxury brands in the region also need to adapt to changing consumer behavior, the conference’s attendees heard.
Juergen Schmitz, a senior Middle East-based official for Infiniti, Nissan’s luxury marque said that today’s customers do almost all the research into new cars over the internet.
“In the automotive world, the research process of customers today is nearly 100 per cent online,” he said, as quoted by AMEinfo, a regional business site owned by Mediaquest, the conference’s organizer.
Julien Hawari, Mediaquest’s co-chief, said that the conference's relevance comes from as the region luxury goods industry rises to dominance.
“10 years ago the Middle East was barely on the map for many luxury brands. Today the Middle East is on the map,” he told Al Arabiya English.
Gulf consumers are some of the world's biggest spenders. The region's culture leads the average consumer to spend over $540 a month on gifts alone - often in the form of high-end jewelry, clothes, electronics and chocolates.
According to organizers, the Arab Luxury World - now in its third iteration - is attended by 700 regional and global professionals representing luxury brands, agents, distributors, mall operators and service providers.