The GCC luxury market has recovered to pre-COVID-19 levels and will continue to expand to reach $11 billion in 2023, according to a report released on Friday by Dubai-based premium goods retailer Chalhoub Group.
The growth has been driven by high spending among local consumers and tourists visiting the region, said the company, which holds rights to sell dozens of high-end labels including Louis Vuitton, Chanel, Dior and Christian Louboutin in the Middle East.
In 2021, the region’s personal luxury market size was estimated to be worth $9.7 billion, an increase of 23 percent compared to 2019. The strong performance was led by the high-end fashion segment, which was worth $4.2 billion last year, up by 39 percent compared to 2019.
The “prestige beauty” segment also rose 6 percent in value to $1.58 billion, while watches and jewellery jumped 16 percent to $3.9 billion compared to 2019. Make-up is the only segment in the market that didn’t recover to pre-COVID-19 levels.
“Local consumers today spend 60 percent of their luxury spending in the country [rather than abroad], a significant increase compared to pre-COVID,” Chalhoub said in a report, which is in collaboration with the Fashion Commission of Saudi Arabia’s Ministry of Culture.
The growth in luxury market has also been driven by high e-commerce spending. “Consumers are becoming more comfortable with shopping luxury online, with rising expectations particularly on last mile,” said the report.
Goods in the fashion segment now make up much of the luxury market share at 39 percent, while jewellery, watches and beauty products account for 25 percent, 11 percent and 6 percent, respectively.
(Reporting by Cleofe Maceda; editing by Seban Scaria)