A Deep Dive into the World of Luxury Marketing in the UAE.
The UAE boasts a population of 9.4 million, with an average age of 32.4, representing over 200 nationalities. Surprisingly, 8 out of 10 individuals state that presenting themselves in a positive light to others is of utmost importance to them. Additionally, keeping up with fashion and trends is a top priority for 8 out of 10 individuals. It's no wonder that the UAE luxury market has reached a staggering $3.7 billion and is expected to surpass $5.5 billion by 2028.
Luxury brands are highly commoditized in the region, evident from the abundance of 5-star hotels, luxury brand retail outlets in multiple malls, and supercars on the roads (even used by the police force). The Louis Vuitton Neverfull bag is considered an everyday item, and convenience and style are expected throughout the city.
However, the reality of luxury in the UAE is a complex mix of overt status symbols and refined signals. While there is a noticeable emphasis on flaunting luxury items, there are also numerous trends at play beyond the surface level. Here are four key trends:
- Increasingly creating local vs curating international brands: The UAE has a plethora of luxury hotels and global gastronomic brands, such as Nobu. However, they have also developed their own brands, such as Jumeirah hotels with multiple 5-star properties and the iconic 7-star Burj Al Arab. Additionally, local restaurant brands are gaining recognition, with some even expanding into other Gulf and international markets. One example is Kinoya, which began as a ramen supper club and has now opened a permanent restaurant and will soon be located inside Harrods. This growth and expansion of local brands are indicative of the UAE's thriving hospitality industry.
- Collaborations aiding individuality: Luxury brand collaborations are becoming increasingly popular among consumers who desire more unique and limited edition status signals. Tyler Ellis, a luxury handbag label, recently collaborated with regional brand Hamda Al Fahim to create a capsule collection, marking their first-ever collaboration. This partnership has allowed both brands to showcase their individuality and give people personal brand definition.
- Experiences as a new currency: Hermes Kite featured their light and delicate silk scarves with unique designs at a beach event where attendees could fly kites, make kites, or simply appreciate the vibrant colors. Meanwhile, Ralph Lauren is providing a limited-time experience for Dubai Park Hyatt Twiggy beach club guests by transporting them to California through their blue and white VIP settings this April. Additionally, travelers from the UAE are exploring new destinations to immerse themselves in different cultures, leading to an increase in outbound travel to places like Georgia and Albania.
- Sustainability as an additional plus: Many households choose to add a Tesla or VW ID4 car to their collection of vehicles, which typically includes a large SUV and a performance car. However, the motivation behind this choice is often more about making a statement than considering economic or environmental factors.
In today's luxury industry, the success of a brand is largely dependent on its authenticity and ability to navigate the ever-changing trends and interests of individual consumers. For example, a high-end home appliance company with little brand recognition was able to exceed sales expectations by leveraging a luxury audience survey to create targeted audience segments and personalized content and media strategies. This highlights the importance of understanding and catering to the unique motivations and preferences of luxury consumers.