Ask anyone in the world what they know about the UAE and, more often than not, the word ‘luxury’ will be mentioned sooner rather than later. Dubai in particular is globally perceived as a city replete with customised sports cars, haute couture and multimillion-dollar penthouses.
On one level, I find this attitude a little frustrating because the UAE is about so much more than surface-level ‘bling’. The Emirates is home to a rich cultural heritage, a vibrant arts scene and an ever-growing knowledge-based economy with a proven track record of attracting top talent from around the world. These attributes have contributed to our nation’s wealth; not resulted from it.
Nevertheless, there is certainly a kernel of truth in the international community’s perception of our nation. For decades, the UAE has helped to shape luxury retail trends on the world stage.
The business of luxury
The size of the UAE’s luxury market hit $3.5 billion in 2021, according to data released by ResearchandMarkets.com, whereas Statista reports that global revenue within the sector amounted to $294.18 billion in the same year.
By comparing these figures, we find that the UAE accounted for more than 1% of overall spending within the luxury space in 2021, despite making up only 0.1% of the global population. What’s more, the Emirates’ luxury market is expected to achieve a compound annual growth rate (CAGR) of 6.82% from 2022-27, significantly outpacing the anticipated international CAGR of 5.4% for the same period.
You may be wondering whether this is simply a matter of spending power. After all, the UAE ranks 20th in the world when it comes to GDP per capita, recording a figure of $47,790 according to the latest data from the International Monetary Fund (IMF). With the Emirates positioned firmly towards the top of the international league tables, it’s not unreasonable to expect its inhabitants’ luxury spending to be higher than the global average.
But spending does not necessarily equate to influence, a factor that can be difficult to capture using figures alone. And, in my opinion, the UAE is punching significantly above its weight when it comes to luxury retail, whichever way you look at it.
One reason I think the UAE has played such a disproportionate role in shaping the global luxury space is its long-standing appeal to world-famous figures from the fields of business, sports and entertainment. From David and Victoria Beckham to Abhishek and Aishwarya Rai Bachchan, household names from every corner of the planet have homes in the Emirates – and where they go, the attention of the international media follows.
Of course, these properties are not your run-of-the-mill homes, wealthy owners have discerning tastes, and the UAE property market is uniquely placed to cater to those looking for something truly special. Indeed, recent years have witnessed high-end real estate and luxury brands become more closely entwined through innovative collaborations such as DAMAC’s partnerships with Cavalli and the luxury jeweller de GRISOGONO. Such prestigious collaborations result in stunning offerings and make Dubai a global hotspot for those who seek sumptuous spaces.
And even celebrities that don’t own property in the UAE love to spend time here, thanks in no small part to our nation’s world-leading calendar. From elite sports events such as Formula 1’s Abu Dhabi Grand Prix and the Dubai Desert Classic to Dubai Shopping Festival and our nation’s incredible New Year’s Eve extravaganzas, there’s no shortage of events to keep influential stars coming back for more.
Supplementing these annual fixtures are high-profile fashion and design events, such as Dubai Design District’s (d3) quarterly Arab Fashion Week. As the official fashion week of the Arab region, this platform is regarded as one of the five most important shows of its kind alongside New York, London, Milan and Paris. This event alone delivers four windows per year when the focus of the global fashion industry is set firmly on the UAE.
Even so, the Emirates’ sway over the international luxury retail landscape extends beyond high-profile individuals and events. In fact, I would argue that UAE citizens and residents represent the biggest drivers behind our nation’s global influence within this arena.
From business and tourism to leisure and entertainment, and everything in between, the Emirates has been built on the premise that only the best will do. Our population live and breathe this mantra in both their professional and personal lives, and – understandably – expect the same standards when spending their hard-earned money.
This has resulted in a nation of ultra-discerning consumers, who are perfectly willing to invest in quality because they understand what quality means. It doesn’t matter whether you’re discussing fine dining and hospitality or hypercars and premium real estate, when it comes to luxury, people living in the UAE know what they’re talking about.
So, when a new luxury trend emerges in the Emirates, it’s not altogether surprising that the rest of the world takes notice.