The Middle East luxury markets, especially in Dubai and Riyadh, are bound to count among the fastest-growing this year, according to Barclays analysts, with the owners of Louis Vuitton and Cartier benefiting the most.
In general, the Middle East is predicted to account for eight per cent of luxury goods sales by 2030, which is up from the current five per cent.
Analysts at Barclays attribute such glowing forecasts to high oil prices and positive demographic trajectories. Dubai’s sustained efforts to attract tourists, foreign expatriates and investors, along with broadening the scope of the country’s top sectors, erstwhile focused only on oil, are also core contributing factors that will catapult luxury spending.
LVMH Moet Hennessy Louis Vuitton SE, the owner of Louis Vuitton and Christian Dior and Richemont, which makes Cartier jewellery and watches, will be beneficiaries of the Middle East’s luxury growth, according to the broker.
Analysts Yasmin Clark and Carole Madjo said: “The broad outlook for the region remains much more positive than for western economies, with GDP growth forecasts being revised up at a time of downward revisions for most countries globally.”
During the first nine months of last year, Dubai witnessed its GDP rise by an annual 4.6 per cent. The emirate also attracted approximately 13 million tourists up until November. In addition, Dubai plans to ramp up its spending and zoom in on priority sectors, prioritising luxury and leisure.
Within the Middle East, Barclays analysts predict bustling opportunities to be concentrated in Saudi Arabia, where, for now, luxury brands have a small presence. The analysts’ special mention went to Qatar which has been teeming tourists, flocking to the country for high-profile events like the Qatar Grand Prix and the AFC Asian Cup and the Fifa World Cup 2022.
Other notable factors include a return of Chinese tourists to the UAE and the opening of a new luxury mall in Riyadh —a potential money-spinner—could further bolster luxury sales in the region
In November, Alpha Nero, a Middle East design and shop fit-out manufacturing company, also predicted luxury retail sector growth over the next decade, owing to the flourishing demand for the world’s upscale labels and a proliferation of shopping malls.
