Luxury brands continue to woo Gulf consumers, despite crisisMay 25th, 2009 - 9:25 am ICT by IANS
By Nehal el-Sherif
Doha, May 25 (DPA) Doha taxi drivers know when someone asks to be dropped at the City Centre mall in the Qatari capital, they’ve got some serious money to spend.
It happens all the time. With a population of just 1.5 million, as well as massive gas and oil reserves, Qatar has the highest GDP per person in the world, according to the International Monetary Fund.
The City Centre mall is one of several in the Qatari capital where those with cash in hand can go to find glittering things that would not be out of place on the Paris Champs Elysees.
“Ten years ago, Doha had only one mall, and one five-star hotel. There was not much to do there,” says an Egyptian doctor, who lived in Qatar in the late 90s.
“Now, as the country grows, more towers are rising and more international names seek to be part of that growth,” said the mother of two, who gave her name only as Samah.
Since the beginning of the decade many major brands have eyed the Gulf as a potential for expanding their businesses in the region. The high living standards in the oil-rich region remain the main attraction even amid the world financial crisis.
Qatar’s robust growth in 2008, some 18 percent, has made it a new retail hotspot.
Although the financial crisis is affecting sales of luxury brands in the mature markets, with the group owning Louis Vuitton and Moet Chandon for instance reporting less-than-effervescent quarterly sales in April, luxury outlets are still opening up all around the Gulf.
In February, Gucci, one of the world’s leading luxury brands, opened another branch in one of Qatar’s huge malls, five years after it launched its first branch in one of the country’s five-star hotels.
Louis Vuitton opened its first store in Doha’s Villagio Mall in mid-2008. The handbag vendor plans to open branches in Bahrain and Dubai by the end of 2009.
It is not only clothing brands that compete for a place in the GCC region. After the success of the Dubai branch of Christie’s auction house, its main rival Sothebys inaugurated its Middle East office in Doha last March.
Christie’s Dubai, which was opened in 2006, has seen huge success, especially in the Arab and Iranian section. Several works achieved the $1 million hammer price or above, to the extent that it has been as a catalyst in the development of the contemporary art market in the Middle East in many references.
At April’s Christie’s art auction in Dubai, little evidence was felt of the credit crunch that’s been gripping the world since last year, as sales totalled around $4.76 million. In 2007, Christie’s managed $53 million in sales in Dubai.
“Now, everything is here. People do not have to go to Europe or the States to find any kind of luxury item they want,” says Alexandra, a 30-year-old American living in the UAE with her husband.
Although the IMF has lowered its estimates for the growth rate in the GCC countries from 6.4 percent in 2008 to 1.3 percent for 2009, this positive growth remains alluring for businesses that are facing sharply negative territory in other parts in the world.
The crisis is also expected to help decrease the rising inflation that plagued GCC economies during the past few years, pulling it down from 10.6 percent last year to 6.3 percent this year.
“Even if some people are hit by the crisis, there are still many people here who can afford to buy luxury products. Yet, we try to give them incentives through better offers and discounts,” said Amitabh Balaji, a salesperson at a Doha boutique.
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