Chalouba report reveals GCC luxury sector to grow rapidly in 2023

The luxury goods market in the Gulf Cooperation Council (GCC) countries continues to outpace global trends and is set to reach record levels in 2023, according to a new report by Chalhoub Group.

The luxury goods market in the region, estimated to be worth $12.5 billion by the end of 2023, has grown twice as fast as the global sector, strengthening the GCC countries’ position as a key player.

Fashion remains the most popular luxury goods segment in the GCC region, valued at $5.2 billion, closely followed by watches at $5.1 billion.

The luxury fashion segment grew by 10 percent in 2023, significantly above the global average growth rate of 4 percent.

The good results continued in the first quarter of 2024, when growth amounted to 7 percent.

The cosmetics sector also saw significant growth across the GCC region, with a 15% year-on-year increase in 2023 and a 10% increase in Q1 2024.

UAE leads in luxury spending

The UAE emerged as a leading market for prestige cosmetics, driven by domestic spending and a strong tourism sector. Makeup and skincare were the fastest-growing cosmetics categories, with skincare growing by 30 percent.

The UAE maintained its position as the GCC luxury goods market leader across all segments, benefiting from a vibrant tourism industry, influx of high-net-worth individuals and resilience of local spending.

Read: UAE consumer spending up 13% in 2023, retail report reveals

Jasmina Banda, Chief Strategy Officer and Vice President, Fashion JV, Chalhoub Group, commented on the report’s findings: “The luxury goods market in the region is expected to maintain its impressive growth trajectory. This is driven by strong economic fundamentals, a thriving tourism sector and positive consumer behaviour, with 53 per cent of GCC residents expressing optimism about the state of the economy.”

The report also highlights the positive attitude of consumers from the Gulf Cooperation Council countries towards their finances – 93% of them declare that they are in good financial shape.

Sixty percent of respondents in Saudi Arabia believe the economy is strengthening, and 70 percent of affluent Saudi consumers said the economic climate had improved over the past three months.

The report highlights the importance of personalized services for GCC luxury consumers. When shopping for fashion, two-thirds of consumers seek guidance from personal stylists (36%) or in-store salespeople (31%).

Despite ongoing concerns about rising living costs, environmental factors and the geopolitical climate, GCC consumers generally express positive emotions, with hope (43%), happiness (39%) and confidence (34%) being the most common.

The Chalhoub Group report highlights the growing importance of the GCC in the global luxury goods market. With strong performance across segments and countries, the region is well-positioned for further growth and innovation in the coming years.