Retail markets in the Gulf region are helping to drive sales of luxury goods amid the current global economic woes, Standard & Poor's said on Tuesday.
In a new report, the rating agency said luxury goods were still selling "very well" in Gulf states, as well as Russia and China, despite the emphasis on austerity in many countries around the world.
In a year of unusually extreme natural disasters, some would assume that luxury goods makers would be watching their products gather dust on shop shelves, Standard & Poor's said.
"In reality, sales of luxury goods are holding steady in developed countries because most affluent shoppers have retained their buying power," said credit analyst Nicolas Baudouin.
"More importantly, luxury goods are selling very well in developing countries, such as Russia and China, as well as in Middle Eastern Gulf states."
Whereas the consumer goods sector in general is coping with the fragile recovery - facing the specter of a second recession in Western Europe - sales of designer handbags, premium quality cars, and other luxury goods continue to climb, S&P's report said.
"Growth rates in the luxury industry should decelerate somewhat in 2012 from the 2010 and 2011 record figures," Baudouin added.
"But we expect them to remain healthy on the back of strong momentum in emerging markets."
"We believe that credit quality in the luxury goods industry will continue to outperform the broader consumer goods sector in the coming years."
Earlier this month, analysts told Arabian Business that luxury buyers in the Middle East have shown no signs of tightening their purse strings despite the looming global economic crisis.
Upscale brands have continued to report strong regional sales amid a global economic slowdown, as wealthy consumers drive a surge in demand, they said.
“Luxury around the world continues to perform well, but I think this region is special,” said David Macadam, regional director and head of retail at Jones Lang LaSalle. “It goes from strength to strength here.”
British brand Burberry said in October the Middle East had emerged as one of its strongest markets, helping to boost global sales by 30 percent.
The company opened five regional stores in 2011, as it sought to cushion itself against a possible sales slump in developed markets.
French beauty brand Estee Lauder said in August it expected strong growth to continue in emerging markets such as the Middle East.
Analysts said the region’s strong luxury sales were underpinned by high disposable income, an array of top-end malls and a steady flow of tourists.
The Gulf particularly has attracted a rising number of Chinese visitors, ranked as the world’s No.2 luxury customers behind Americans, according to consultancy Bain & Co.
In Dubai, the Gulf’s trade and tourism hub, more than 150,000 Chinese tourists were recorded in 2010 - a 41 percent rise on the previous year’s figures.
Saudi Arabia and the UAE were ranked among the top 10 countries in the world in terms of consumer confidence in the third quarter of this year, Nielsen said last month.
According to The Nielsen Global Consumer Confidence Index, India topped the global list with Saudi Arabia second and the UAE in seventh position.For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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