Dubai and Riyadh Lead Luxury Retail Growth in 2023
The Middle East is poised to emerge as one of the fastest-growing luxury markets in 2023, with Barclays analysts predicting that companies like Louis Vuitton and Cartier are in a prime position to reap the benefits.
Barclays analysts highlighted several factors for this optimistic outlook, including robust economic conditions driven by high oil prices and demographic trends in the region.
In this growth trajectory, both LVMH Moet Hennessy Louis Vuitton, the conglomerate behind brands like Louis Vuitton and Christian Dior, and Richemont, known for Cartier jewelry and watches, are expected to thrive as luxury spending gains momentum in the Middle East.
Dubai strategic efforts to attract tourists, expatriates, and diversify its economy away from oil will further fuel this luxury boom. The city has enjoyed a 4.6% annual GDP increase in the first nine months of 2022 and welcomed nearly 13 million tourists until November of the same year.
Dubai is actively focusing on priority sectors, including luxury and leisure, and Saudi Arabia, in particular, stands out as an opportunity-rich market due to its relatively small presence of luxury brands.
Additional catalysts that could elevate luxury sales in the region include Qatar hosting of events like the Qatar Grand Prix and the AFC Asian Cup after the 2022 FIFA World Cup, the potential return of Chinese tourists to the UAE, and the upcoming opening of a luxury mall in Riyadh.
According to Barclays' predictions, the Middle East is projected to account for 8% of global luxury goods sales by 2030, up from the current 5%.
Bernard Arnault, the French tycoon behind LVMH Moët Hennessy Louis Vuitton, oversees a luxury fashion empire that encompasses more than 70 brands, including Louis Vuitton, Marc Jacobs, Sephora, and Rihanna Fenty Beauty.