Get your copy of “Is the Middle East the ‘Next China’ For Luxury Brands?” on our Reports page. Boasting one of the largest young populations in the world, and relatively affluent millennial and Gen Z consumers in markets like Qatar, the United Arab Emirates (UAE), and Saudi Arabia, the MENA luxury market could see a Compound Annual Growth Rate (CAGR) of 8.5 percent over the next five years. This is especially driven by consumers in the affluent Gulf Cooperation Council (GCC) countries, which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE. While the most affluent Middle Eastern consumers do a significant amount of their high-end shopping abroad – 16 percent of Harrods’ clientele came from the GCC in 202218 – demand is rising for locations closer to home and greater product localization. This has seen leading luxury brands expand their retail footprint and brand distribution networks in the MENA region over the past few years. Kering-owned Gucci, for example, introduced its high jewelry collection to the UAE in March 2022 and opened its second high jewelry boutique in Kuwait, following its debut location in Paris. Meanwhile, local brands and designers are seeing interest grow as Gulf consumers branch out beyond the biggest luxury names. As Patrick Chalhoub, CEO of the Dubai-based luxury retailer and distributor Chalhoub Group, recently put it, “Brands like Chanel, Hermès, Louis Vuitton, Cartier and Tiffany have been working on local strategies to attract consumers in the region through collaborations, dedicated collections and immersive events in iconic locations such as Al-Ula in Saudi Arabia.” Added Chalhoub, “Middle Eastern customers will build up trust in big brands, but they need brands to provide points of differentiation.” The nurturing of local talent is another way international brands and retailers are looking to attract the attention of young, affluent Middle Eastern consumers. As Harrods MD Michael Ward recently noted, “The Middle East customer, especially the millennial and Gen Z generations, expect brands to increasingly play a role in elevating local talent.” To that end, the Qatar Investment Authority-owned British retailer will launch its Harrods Hive program – which debuted in China in 2021 – in the MENA region later this year. Ward describes the Harrods Hive as an initiative “to bring together a number of experts from different disciplines to share knowledge and inspire other future creatives through networking events and industry-led panel discussion.” The first of four Hive events will launch in the UAE. Get your copy of “Is the Middle East the ‘Next China’ For Luxury Brands?” on our Reports page.
