Market Trends of United Arab Emirates Luxury Goods Industry
This section covers the major market trends shaping the UAE Luxury Goods Market according to our research experts:
Increasing Tourism and Growing Cultural Influence
The United Arab Emirates is among the most visited countries in the world, and with the support of the regulatory bodies of the country, the tourism industry is witnessing a surge. According to Dubai's Department of Economy and Tourism, Dubai hosted more than 7 million international visitors during the first half of 2022, a rise of 183% Y-o-Y. In 2021, Dubai received a total of 7.28 million international visitors. The sustained growth of the UAE luxury goods market can be attributed to the continuing rise in the tourism industry. Travelers visiting the country often buy luxury goods from the outlets of various multinational brands and take them back to their homes, where certain brands or products may not be commercially available.
The United Arab Emirates is an economically strong market, and major multinational brands have often launched their premium products earlier in this country than many others. Tourists often come across things that the United Arab Emirates is famous for, such as luxury perfumes and leather products. For instance, the luxury goods brand, Gucci, has a product portfolio in the country that comprises more than 29 variants of perfumes. Thus, as the tourism industry continues to grow, the luxury goods market in the country is likely to grow at a healthy rate, posing significant opportunities for the players to introduce their products to the local market.
E-commerce Sales Picking Up Pace Compared to Offline Sales
With the increasing digital adoption, e-commerce is becoming a reality, shaping new user interactions, disrupting business models, and creating new growth opportunities for single and multi-brand luxury goods stores in the country. As more customers move online, businesses follow suit, leading to the digital ecosystem's gradual development. It provides easy access to product-related information and prices to the customers, which further contributes to the overall growth of the UA E luxury goods market. In April 2022, Business of Preloved Fashion (BOPF), a luxury fashion brand, entered the UAE market and launched an online platform to create a direct interaction between buyers and sellers. Retailers are increasingly using technologies like augmented reality (AR) and metaverse to help online customers improve their shopping experience.
Additionally, government initiatives promote e-commerce in the region, boosting the market's growth. For instance, the UAE government set up a duty-free e-commerce hub Matajircom, as an initiative to work closely with local and international companies.
