GCC luxury market hit $12.5bn in 2023 as shoppers buy fashion, watches and beauty products

With the personal luxury market in the GCC growing at double the speed of the global industry and reaching a record $12.5bn by the end of 2023, the industry’s significant growth highlights the region’s robust demand for high-end fashion, luxury watches and jewellery, and prestige beauty cementing the GCC’s key role in the global luxury landscape.

Jasmina Banda, Chief Strategy Officer and SVP Fashion JVs at Chalhoub Group, said: “The region’s luxury market is expected to continue its impressive growth trajectory, driven by strong macroeconomic fundamentals, a thriving tourism sector, and dynamic consumer behaviour with 53 per cent of GCC residents expressing optimism about the state of the economy.

GCC luxury market

“This ongoing growth and dynamism in underpinned by numerous new openings including those of ‘new luxury’ brands such as Zimmermann in Mall of Emirates and Jacquemus in Dubai Mall, pop-ups inside and outside of malls, and events happening across the region.”

In terms of market categories, Fashion remains the largest within the GCC luxury market, valued at $5.2bn, closely followed by watches at $5.1bn.

The high-end fashion segment alone grew by 10 per cent in 2023, far surpassing the global average growth rate of 4 per cent, and continues to experience strong growth 7 per cent in Q1 2024.

Ultra high-end and high-end segments represented 86 per cent of total luxury fashion market and increased by 11 per cent and 6 per cent from the previous year respectively.

The UAE emerged as the top market across all high-end fashion segments including ultra high-end, high-end, aspirational, and accessible luxury, owing to its vibrant tourism sector, influx of high-net-worth individuals (HNWIs) and resilient local spending.

The GCC’s beauty category represents a strong category with growth across the region. Overall, the region witnessed a 15 per cent year on year growth in 2023 and +10 per cent in Q1 2024, with the UAE representing the top market in Prestige Beauty, driven by strong domestic spending and healthy tourism in the nation, closely followed by Saudi Arabia.

Makeup and skincare increased their weight within the prestige beauty market, with skincare leading in terms of growth at +30 per cent.

Mid-range and limited-distribution brands were the fastest growing segments within skincare while high-end and prestige grew slower.

In terms of beauty products, fragrances (48 per cent) were the most purchased beauty product by females in the GCC, followed closely by facial moisturizers and lip makeup.

Top factors influencing purchases of beauty products included good value for money (36 per cent), clean ingredients (35 per cent), and easy to use at 35 per cent.

To enhance the shopping experience, consumers stress the importance of personalised services and convenience. When it comes to fashion purchases made in the past three months, two in three consumers seek guidance when making fashion purchases either from personal stylists (36 per cent) or in-store sales assistants (31 per cent).

The positive outlook on the regional economy is also evident in consumer’s personal finances with 93 per cent claiming to do well financially.

60 per cent of respondents in Saudi Arabia particularly state that the believe economy is stronger, with 70 per cent of affluent KSA consumers reporting that the economy has improved over the past three months.

Despite concerns regarding the rising cost of living, environmental factors, and the geopolitical state, GCC consumers mainly embrace positive feelings citing hopefulness (43 per cent), happiness (39 per cent), and confidence (34 per cent) as the three top emotions.

The insights provided by Chalhoub Group highlight the GCC’s pivotal role in the luxury market’s evolution. With strong performance across various segments and countries, the region is poised for sustained growth and innovation in the years to come.