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The luxury market in the GCC countries keeps on growing

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The Middle East is one of the ten largest luxury goods markets where sales of luxury items such as jewelry, fashion or beauty exceed $8.91 billion[1]. In the GCC countries, between 1.5 million and 1.6 million wealthy households are estimated with total investable assets of around $2.2 trillion. Over the next decade, the growth of the ultra-high-net-worth individual (UHNWIs) population – those with $30 million in assets or more – is predicted to rise by 54% in the region.

In 2015, the Big Spenders Index ranked Qatar, Saudi Arabia and Kuwait among the top ten countries worldwide that are most likely to see strong growth in luxury spending by ultra-wealthy residents or visitors. All three countries received the maximum score of 10, in terms of spending on luxury imported items, highlighting the importance of luxury brands. Strong wealth growth in Qatar helped the country rank third worldwide while Saudi Arabia ranked sixth and Kuwait occupied the 10th spot on the index[2].

A survey on spending habits commissioned by American Express Middle East across five GCC countries: the United Arab Emirates, Qatar, Kuwait, Bahrain and Oman, found that the average spending on luxury goods and services reaches $2,000 per month per household. In Qatar, it reaches $4,000, up from $2,500 a year earlier, it is the highest average amount among those countries and it represents approximately 12% of the average monthly household income[3]. The survey also noted a change in the way people spend on luxuries. In Qatar, 24% of respondents plan to prioritize personal wellness, “the big gainer of 2016”.

Patrick Chalhoub, joint chief executive officer of Chalhoub Group, points an evolution on the way that people are shopping for luxury items. Talking about consumers in the UAE, he says: “They want to experience more unique luxury. It’s not just about a product or its price; today more than ever, it’s about the experience. About how pleasant the shopping experience was; about how much of a connection I have formed with a certain brand; and the satisfaction I get from having a good time at the store every time I visit”[4].

 

[1] The GCC luxury segment, BQ Magazine, April 5, 2016

[2] Qatar, Saudi, Kuwait Among Top 10 Nations Globally For Luxury Spending, Gulf Business, March 5, 2015

[3] Qatar tops in luxury spending among five GCC nations, The Peninsula Qatar, April 20, 2016

[4] Luxury spend of ultra-rich people in Middle East remains strong, Khaleej Times, April 14, 2016

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