Stagnant year for the Middle East luxury market
The luxury goods retail market in the Middle East has been stagnant this year with sales dampened by a reduction in tourism spending in the UAE, a new report has said.
After a few years of hyper growth, the Middle East personal luxury goods market flatlined in 2015, according to Bain & Co’s annual Luxury Goods Worldwide Market Monitor.
It said this deceleration has mostly been driven by a reduction of tourism spend notably in the UAE, while domestic market remains strong. The UAE’s tourism industry has been impacted this year by a reduction in Russian visitors as a result of the fall of the Russian rouble. Traditionally, Russian tourists have been big spenders in Dubai’s luxury retail market.
Cyrille Fabre, partner and head of Bain’s Retail and Consumer Products practices in the Middle East, said: “Going forward, we expect the Middle East market to show new signs of life driven by mall openings, but the region’s growth will occur at a much slower level versus the last five years.
“A sustainable high single digit growth rate will become a new normal for the market with important implications of the required capabilities for success.”