Mid-East Luxury Goods Sector Set to Reach $100 Billion By 2010

The Middle East regional luxury goods sector will reach a value of $100 billion by 2010 of which $8 billion will come from high end watches and jewelry, said Tawhid Abdullah, Managing Director of Dubai Gold and Jewellery Group (DGJG) and LLC.

Speaking at the recently concluded conference on 'Marketing for Luxury Products', in Dubai, he cited a booming youth market driving the luxury goods sector.

"Women and younger generation in the region are serious luxury product buyers right from the age of 20 compared to 40 years in the west. This gives 20 extra years for luxury brands in our region," said Abdullah.

"The global luxury market which is today valued at about $400 billion is expected to grow by $1 trillion by 2010, of which 10 percent I would estimate will be from the Middle East considering the growing per capita income of the region and Dubai's emergence as a luxury capital," he added.

Globally 32 percent of the luxury market sales come from high end jewelry and watches, which is also a major contributor to the luxury market in the region. Swiss luxury watches during the first half of 2006 showed $175 million to UAE, which is 12.2 percent growth compared to last year.

"We expect the luxury watch sales in the UAE to cross $500 million by the end of 2006 and the total market size of the region to reach $ 4 billion by 2010," added Abdullah

Talking about the changes in the profile of luxury goods consumer, he said today's consumer is young, more educated, more demanding and looks beyond the brand for a total luxury experience including world class shopping facilities and excellent customer service.

Stringent measures to crack counterfeit sales in luxury goods and specific marketing plans targeted at the younger generation are necessary to help the regional industry.

According to Moaz Barakat, managing director, World Gold Council, Middle East, Turkey and Pakistan, the gold jewelry industry has seen a revival through fresh marketing mechanisms which have established gold jewelry as a fashionable luxury item.

"By developing marketing strategies and business plans built on a structured understanding of the market and in-depth consumer insights and research, we have seen a revival in the demand for gold jewelry. Dubai's consumption in 2005 increased by 10 percent from 95.8 tons in 2004 to 106 tons in 2005, despite the 8 percent increase in the year-year average price. Dubai's imports in 2005 were 522 tons, in the first 9 months of 2006 it is already 361 tons," said Barakat.

The contribution of high end jewelry to the regional luxury goods sector is expected to be as much as that of the watch segment, around $4 billion by 2010.