GCC luxury sector surges in 2023, UAE leads the rest
GCC luxury sector surges in 2023, UAE leads the rest, reveals report from Chaloub Group Image: Getty Images
The GCC’s luxury market continues to outperform global trends, reaching record highs in 2023, according to a new report by Chalhoub Group.
The region’s luxury market, valued at $12.5bn by year-end 2023, grew at double the rate of the global industry, solidifying the GCC’s position as a key player.
Fashion remains the top luxury segment in the GCC, valued at $5.2bn, followed closely by watches at $5.1bn.
The high-end fashion segment grew by 10 per cent in 2023, significantly exceeding the global average growth rate of 4 per cent.
This strong performance continued into Q1 2024, with growth of 7 per cent.
The beauty sector also saw significant growth across the GCC, with a 15 per cent year-on-year increase in 2023 and 10 per cent growth in Q1 2024.
UAE leads the way in luxury spend
The UAE emerged as the top market for prestige beauty, driven by domestic spending and a robust tourism sector. Makeup and skincare were the fastest-growing beauty categories, with skincare experiencing a rise of 30 per cent.
The UAE retained its position as the top luxury market within the GCC across all segments, benefiting from a vibrant tourism industry, an influx of high-net-worth individuals, and resilient local spending.
Read: UAE consumer spending rises 13% in 2023, reveals retail report
Jasmina Banda, chief strategy officer and SVP of Fashion JVs at Chalhoub Group, commented on the report’s findings: “The region’s luxury market is expected to maintain its impressive growth trajectory. This is fueled by strong economic fundamentals, a thriving tourism sector, and positive consumer behaviour, with 53 per cent of GCC residents expressing optimism about the state of the economy.”
The report also highlights GCC consumers’ positive outlook on their finances, with 93 per cent reporting financial well-being.
Sixty per cent of respondents in Saudi Arabia believe the economy is strengthening, with 70 per cent of affluent Saudi consumers reporting an improved economic climate in the past three months.
The report underscores the importance of personalised services for GCC luxury consumers. When making fashion purchases, two-thirds of consumers seek guidance from personal stylists (36 per cent) or in-store sales assistants (31 per cent).
Despite ongoing concerns about rising living costs, environmental factors, and the geopolitical climate, GCC consumers generally express positive emotions, with hopefulness (43 per cent), happiness (39 per cent), and confidence (34 per cent) being the most prevalent.
The Chalhoub Group report highlights the GCC’s growing significance in the global luxury market. With strong performance across various segments and countries, the region is well-positioned for continued growth and innovation in the years to come.