Jasmina Banda, Chief Strategy Officer and SVP Fashion JVs at Chalhoub Group, remarked on the robust growth of the GCC’s luxury market, fueled by strong economic foundations, vibrant tourism, and dynamic consumer behaviors. She noted that 53% of GCC residents are optimistic about the economy, supporting ongoing market expansion. The region saw significant new openings, including “new luxury” brands like Zimmermann and Jacquemus, pop-ups, and various events across the region.
In 2023, Fashion led the luxury market at USD 5.2 billion, closely followed by Watches at USD 5.1 billion. High-end fashion alone grew by 10%, surpassing the global average of 4%, and continued strong with a +7% growth in Q1 2024. The ultra high-end and high-end segments constituted 86% of the market, growing by 11% and 6% respectively from the previous year.
The UAE emerged as the leading market in all high-end fashion segments, driven by tourism and high-net-worth individuals (HNWIs), supported by robust local spending. In the beauty category, the GCC witnessed 15% year-on-year growth in 2023 and a +10% increase in Q1 2024, with the UAE dominating Prestige Beauty, followed closely by Saudi Arabia. Skincare led growth at +30%, with mid-range and limited-distribution brands showing the fastest growth within skincare.
Fragrances were the most purchased beauty product in the GCC (48%), followed by facial moisturizers and lip makeup. Key purchasing factors included value for money, clean ingredients, and ease of use. Personalized services and convenience were crucial for enhancing the shopping experience, with two-thirds of consumers seeking guidance from personal stylists or in-store assistants for fashion purchases.
Consumer sentiment remained positive, with 93% reporting strong personal finances. In KSA, 60% believed the economy had strengthened, with 70% of affluent consumers noting improvement in the past three months. Despite concerns over living costs and geopolitical issues, GCC consumers expressed optimism, citing hopefulness, happiness, and confidence as predominant emotions.
Chalhoub Group’s insights underscore the GCC’s pivotal role in shaping the luxury market’s trajectory, poised for continued growth and innovation in the years ahead.
