The luxury market in the GCC outpaced global trends in 2023, achieving record-breaking highs, according to a recent report by Chalhoub Group. The region's luxury market, valued at $12.5 billion by the end of 2023, grew at double the rate of the global luxury industry, solidifying its status as a major player in the sector.
Key Segments Driving Growth
Fashion and Watches
Fashion continues to dominate the GCC luxury market, valued at $5.2 billion, followed closely by the watch segment at $5.1 billion. High-end fashion saw a 10 percent growth in 2023, significantly outpacing the global average growth rate of 4 percent. This strong performance extended into the first quarter of 2024, with a 7 percent growth.
Beauty Sector
The beauty sector also experienced substantial growth, with a 15 percent year-on-year increase in 2023 and a further 10 percent growth in Q1 2024.
UAE: The Leader in Luxury Spending
The UAE emerged as the top market for luxury beauty products, driven by strong domestic spending and a thriving tourism sector. Makeup and skincare were the fastest-growing beauty categories, with skincare witnessing a remarkable 30 percent rise.
The UAE maintained its position as the leading luxury market in the GCC across all segments, benefiting from a vibrant tourism industry, an influx of high-net-worth individuals, and robust local spending.
Industry Insights
Jasmina Banda, Chief Strategy Officer and SVP of Fashion JVs at Chalhoub Group remarked on the findings:
“The region’s luxury market is expected to sustain its impressive growth trajectory, supported by strong economic fundamentals, a thriving tourism sector, and positive consumer sentiment, with 53 percent of GCC residents expressing optimism about the economy.”
The report also highlighted that 93 percent of GCC consumers feel financially secure, with 60 percent of Saudi respondents believing the economy is strengthening. Furthermore, 70 percent of affluent Saudi consumers reported an improved economic climate over the past three months.
Consumer Preferences and Sentiments
The report underscored the importance of personalized services for GCC luxury consumers. About two-thirds of fashion buyers seek advice from personal stylists (36 percent) or in-store sales assistants (31 percent).
Despite concerns about rising living costs, environmental issues, and the geopolitical climate, GCC consumers generally express positive emotions, with hopefulness (43 percent), happiness (39 percent), and confidence (34 percent) being the most common sentiments.
Future Prospects
The Chalhoub Group report emphasizes the growing significance of the GCC in the global luxury market. With strong performances across various segments and countries, the region is well-positioned for continued growth and innovation in the coming years.
News Source: Gulf Business
