GCC Luxury Market Booms in 2023
Valued at $5.2 billion, fashion is still the biggest category in the GCC’s luxury market.
The luxury market in the GCC outpaced global growth in 2023, according to strategic insights from luxury goods retailer Chalhoub Group.
The personal luxury market in the region grew at twice the pace of the global industry, reaching an all-time high of $12.5 billion at the end of last year on the back of surging demand for high-end fashion, luxury watches, and jewelry as well as prestige beauty products in the region.
Valued at $5.2 billion, fashion remained the biggest category in GCC’s luxury market, followed by watches at $5.1 billion. High-end fashion alone increased by 10% during 2023, surpassing the global average growth rate of 4%, and remained on a strong growth path with an increase of more than 7% during the first quarter (Q1) of 2024.
Last year, ultra-high-end and high-end categories constituted 86% of the total luxury fashion market, growing from the previous year at 11% and 6%, respectively.
The UAE was the top market for all high-end fashion segments, including ultra-high-end, high-end, aspirational, and accessible luxury on the back of its booming tourism industry, the influx of HNWIs, and resilient domestic spending.
Across the GCC, the beauty category saw significant growth with a year-on-year (YoY) surge of 15% last year and a 10% leap during Q1 2024. The UAE led the prestige beauty market, thanks to strong domestic spending and a thriving tourism industry, closely followed by Saudi Arabia. Makeup and skincare products saw significant growth, with skincare surging by more than 30%, with mid-range and limited-distribution brands representing the fastest-growing segments.
Fragrances were the most purchased beauty product among women in the GCC, accounting for 48% of purchases, followed by facial moisturizers and lip makeup. When choosing beauty products, consumers place importance on value for money, clean ingredients, and ease of use, according to the insights.
Consumers also place importance on personalized services. Over the past three months, two in three consumers cited guidance from personal stylists and in-store sales assistants as important.
GCC consumers also showed an overall positive outlook on the regional economy, with 93% claiming that they are doing well financially. In Saudi Arabia, 60% of respondents believe that the economy is stronger and 70% of affluent consumers in the kingdom reported that the economy has improved over the past three months.
Despite expressing concerns over the rising cost of living, environmental issues, and geopolitical aspects, GCC consumers cited overall positive feelings, including hopefulness (43%), happiness (39%), and confidence (34%).
Chalhoub Group is a Middle East-based luxury retailer with eight owned brands and over 300 international brands in luxury, fashion, beauty, and art de vivre. It recently expanded into luxury watches, jewelry, and eyewear.
Earlier this year, Chalhoub Group launched its startup accelerator, The Greenhouse, in Riyadh. The Greenhouse, which launched in 2018 in Dubai, is dedicated to supporting entrepreneurship and innovation in MENA.
