With annual sales now exceeding AED 30 billion (US$8.2 billion), the market of luxury goods continued to witness impressive growth in Middle East. According to a new study, the luxury goods market recorded a growth of 10 to 15 per cent from 2011 to 2012. The Middle East market climbed the charts to become the 10th largest luxury goods market in the world.
These figures were revealed by Fondazione Altagamma in its 11th edition of “Luxury Goods Worldwide Market Study”. The report is based on findings of Bain & Company, a renowned advisor to the global luxury goods industry. As part of the study, the market and financial performance of over 230 luxury companies and brands from all over the world were analyzed.
The report clearly highlights great market potential for luxury goods offered by Middle East market. As consumers become more fashion-conscious and better connected to the world, the market for luxury goods is expected to continue to make impressive gains in the region. The appetite for luxury goods will also be supported by a boom in the Middle East economy.
In general, the global luxury goods market seems to remain unaffected by economic turmoil in most developed markets. The report suggested that revenues are expected to jump by up to 7 per cent in the last quarter of 2012, compared to same period during last year. In 2012, the total sales of luxury goods are estimated to grow by 10 per cent to €212 billion.
The world luxury goods market has posted a strong double-digit annual growth in the last three years. This growth is mainly driven by growth in sales of China and Americas region by about 18 per cent and 13 per cent, respectively. However, market growth in Europe remained stunted and is projected to increase by only 5 per cent.
The study shakes off any major weaknesses that may plague the growth of luxury goods market. The luxury goods market has also received a tremendous boost from e-commerce, discount outlets and increased spending by tourists. The report suggests that “the strategies that brands relied on to win in the past simply aren’t going to connect with the segments that will matter most in the second half of the decade”. Consumers are now demanding a more engaging and personal shopping experience from retailers.