Dubai the top spot for luxury spending by Mideast shoppers

Dubai remains the number one destination for luxury spending among Middle Eastern consumers. (File photo: Reuters)
Updated 24 May 2017

Dubai the top spot for luxury spending by Mideast shoppers

DUBAI: Dubai remains the number one destination for luxury spending among Middle Eastern consumers, according to an American Express survey presented Tuesday at Arab Luxury World, a two-day forum in Dubai.
The survey, conducted by American Express Middle East and North Africa in partnership with international market research company GfK, collected data from more than 700 participants in six Arab countries in January and February 2017.
Participants from the UAE, Bahrain, Qatar, Kuwait, Oman and Lebanon were questioned about their spending habits and future financial plans.
According to the data, 21 percent of respondents said Dubai was their first choice as a luxury shopping destination, followed by Paris and London at 17 percent and 16 percent respectively. The next Middle Eastern country came in eighth, with four percent of respondents saying they would choose Beirut for luxury spending.
The presentation was given by Vice President of the Merchant Business at American Express Graziela Martins as part of a talk on spending trends in the Middle East.
The importance of Dubai as a spending hub was emphasized in an earlier presentation by Cyrille Fabre, partner at Bain & Company, who said that “Dubai is successful and gathering momentum to establish itself as a global hub… It’s already part of the top 15 luxury markets by city globally.”
Fabre praised the local arts and fashion scene, including such events as the Art Dubai fair, for creating the eco-system needed to nature Middle Eastern talent.
This eco-system, he said, contributes to the city’s allure as a destination for luxury spending.
Fabre did, however, warn that more has to be done to retain Gulf buyers, some of whom seek to spend on luxury items in Europe.
The retail market across the Gulf and Middle East has suffered due to oil price fluctuations over the past year, he said, but “although consumers have been negatively impacted by oil prices, we do have a high number of high net worth individuals in the region but we see that the number two nationality for some of the jewelry brands in Europe is the Saudis, after the Chinese, and purchases by people from the Gulf in London has increased quite significantly.
“So, our share of the wallet of our national consumers has dropped. Is it because they feel they have a better customer experience in London?”
Fabre’s advice for the audience of representatives from the premium goods industry was to “think like a millennial.”
The millennial “mindset is contagious. Other generations are also impacted and are changing their behaviors,” he said, adding that enhancing a customer’s experience in the digital world is crucial in order to encourage them to come to a store and buy.
“Seventy percent of all luxury purchases are influenced by one online touchpoint,” he said, quoting Bain & Company research.
“They want deeper engagement, they want a deeper experience both when they are buying and when online.
“People go on Instagram and see what’s trending, what their friends are liking and that’s how people like to engage so we need to integrate social media… I really believe the importance of Instagram here in the Middle East is much greater than anywhere else,” he said.
The fourth edition of Arab Luxury World, which ended Tuesday, was held under the theme “Digital Disruption and Emotional Engagement” and served as a platform for more than 70 speakers from the premium goods and services market to discuss and debate the latest trends in the industry.

Automechanika Riyadh opens, featuring leading global suppliers

Updated 17 min 13 sec ago

Automechanika Riyadh opens, featuring leading global suppliers

  • Saudi auto deals grew 40 percent last year with influx of female buyers

RIYADH: Leading names in the global auto services industry are out in force at Automechanika Riyadh — which opened on Monday at Al Faisaliah Hotel — vying to increase their share of a growing market expected to reach a value of $10.15 billion by 2023.

Automechanika Riyadh is the regional arm of the world’s largest trade fair, congress and event organizer, Messe Frankfurt, which has licensed the Automechanika brand to event organizer Al Harithy Company for Exhibitions (ACE) Group.

Mansour Abdullah Al-Shathri, vice chairman of the Riyadh Chamber of Commerce, inaugurated the trade event, which will run from Feb. 24-26.

It was revealed that Saudi auto deals grew approximately 40 percent last year, with female buyers accounting for between 10-15 percent of sales after the landmark decision to allow women to drive in the Kingdom for the first time.  

“International suppliers are stepping up their marketing for the resurgence in Saudi’s market, and this impacts the entire supply chain,” said Mahmut Gazi Bilikozen, show director for Automechanika Riyadh.

“While there is growth potential in the market, it is becoming a more competitive landscape and one which will also have to contend with evolving customer preferences. The conditions are ripe for new business relationships for those wishing to succeed in this transformative environment,” he added.

Zahoor Siddique, vice president of ACE, said: “Future vehicles will become more complex and challenging for the aftermarket industry. It is therefore imperative for manufacturers, local garages, technicians and mechanics to upskill and remain above the curve. 

 “Automechanika Riyadh is one such platform that can enable us to share and learn what the industry needs to unleash its potential.”

Two major US players — disc pad producer Giant Manufacturing and United Motors Mopar, the Kingdom’s sole distributor of Chrysler, Dodge, Jeep and Fiat cars — forecast a bullish market over the next few years.

Giant’s vice president, Eli Youssian, said he believed car sales in the Kingdom would grow by 9 percent annually until 2025, while United Motors District CEO Hassan Elshamarani expected another three million female drivers to be on the Kingdom’s roads by the end of the year.

Both Giant and United Motors launched new products at the show, with the former rolling out its new German-engineered Euro Premium Metallic Disc brake pads, and the latter introducing its Magneti Marelli spare parts.

The high potential of the new-look Saudi automotive landscape has also struck a major chord with South Korean suppliers.

The show’s Korean pavilion is hosting new-to-market entrants and existing suppliers all looking for business partners. With products from wiper blades to filters and air-conditioning parts to brake pads, the Korean contingent was positive about the Kingdom’s prospects.

One exhibitor, D Only Automotive, is looking to ring fence 10 percent of the Saudi brake market. “With more vehicles on the road, demand for brakes will increase, (so) we believe this is possible,” said President Jeon JaeWon.

Global research and analytics firm Aranca — Automechanika’s knowledge partner — has forecast that Saudi Arabia’s automotive spare parts and service market will grow at approximately 6 percent over the next five years to reach a value of $10.15 billion by 2023.

“The spare parts and service market for passenger cars alone is expected to eclipse $6.9 billion by 2023,” said Vishal Sanghavi, Aranca’s automotive practice head.