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Report IDs 6 main catalysts for market growth in 2021
KUWAIT CITY, April 5: Kuwait ranks third among the Gulf Cooperation Council countries after the UAE and Saudi Arabia in goods market for personal luxury after it recorded the highest growth in the Gulf region in 2021 compared to 2019 at 35 percent, reports Al-Rai daily. The report issued by the Chalhoub Group in cooperation with the Fashion Authority, under the title ‘Personal Well-being in the Gulf Cooperation Council Countries in 2021: The Story of Early Recovery and Growth’, said the luxury goods market in the Gulf in 2021 showed an early recovery similar to prepandemic levels earning $9.7 billion at the end of year to an increase of 23% compared to 2019.
The report, according to the daily, indicated that the growth will be driven by several factors, including: the growth of domestic spending in Saudi Arabia, the return of international tourists to the UAE, the entry of new categories of consumers into the luxury sector, and the innovation of new categories in the sector such as wellness and skin care, and the increase in the pace of ecommerce growth.
On the other hand, the report pointed out that e-commerce for beauty, elegance and high fashion products is still strong in the Gulf, where the proportion of beauty and elegance products trade is 11%, while the proportion of high-end fashion products is 15%. The report revealed that all GCC countries except Bahrain recorded double growth in the high-end fashion sector in 2021 thanks to Gulf consumers redirecting their spending inward, while Kuwait recorded a growth of 49%, Saudi Arabia 44%, followed by the UAE with 40%.
The report added that local consumers spend 60 percent of their budget for luxury in their country, which is a huge increase compared to before the pandemic, and consumers in the region are also interested in buying with certain expectations from brands. Meanwhile, the Gulf’s personal luxury goods market is expected to reach $11 billion in 2023, with a compound annual growth rate of 7% for the period between 2021 and 2023.
The report identified 6 main catalysts for market growth during 2021, which are: the entry of new consumers into the sector, the relocation of spending on luxury (driven by several factors, including travel restrictions, brand availability, high improved inventory levels, in addition to improved customer service and focusing efforts on creating a customer base), local events (as the region seeks to attract more international brands by advertising industry-specific events), developments, the recovery of the tourism sector, and the growth of e-commerce.