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Gulf in the Lap of Luxury

If luxury brands are feeling the effects of the global economic slowdown, it’s not being felt in the UAE and Gulf.

If the wealthy elsewhere are beginning to feel the pinch, here the “national obsession with luxury brands” is only growing. The global luxury goods market is expected to “slip between 3 per cent and 7 per cent in 2009 to between $214.9b to $224.13b in sales,” according to a new study by Bain & CO released on Monday. While the more mature Western markets have seen a steady deceleration in sales, some of the world’s top brands are expanding their presence in the UAE, especially Dubai.

That the UAE has topped the global rankings in the recent Nielsen Global Luxury Brand survey should come as no surprise given its rapid expansion and new wealth best demonstrated by the Emirates’ “insatiable appetite for luxury brands.”

Luxury is a lifestyle choice and a relative one. What is luxury for one can be an absolute necessity for another, and vice versa. Dubai’s rising prominence as a luxury hub, however, is more a reaffirmation of the city’s emergence as one of the world’s most attractive destinations to ‘live, work and play.’ It has been a steady march, which gathered momentum in the past couple of years. The prime driver in this evolution, it could be argued, is not the retail sector per se but the property market. By developing world-class master-planned communities, Dubai was sending out a calling card to the global professional to come to the city and make it home.

The platform of opportunities offered by the free zones and the Knowledge Economy growth-centres such as Dubai Internet City and Dubai Media City accelerated this inflow. Backed by the excess liquidity spilling over from oil revenues, Dubai has been consolidating its position as a lifestyle hub for the region.

In such a fast-evolving scenario, it was inevitable for the world’s finest luxury brands and retailers to set shop in Dubai. The higher disposable income, shifting lifestyle preferences, and exposure and easy reach to the world’s finest brands were drivers for the luxury market.

Does this bring a qualitative change to our every day lives? Is luxury needed? There are three roads to take in arriving at an answer. One is to follow the lead of celebrities like Madonna, who said: “I always thought, I wanted to be treated like a star.” Luxury goods are a must for Madonna and those who toe her line. The second is to heed Benjamin Franklin’s words, who said, “Poverty wants some things; luxury many things” — implying that luxury comes with splurge. The third, however, is easier to follow, and makes sense: “To each one’s own.”