MILLENNIALS DOMINATE THE LUXURY MARKET IN THE MIDDLE EAST
By Seher Demirci, the Managing Partner at Benson & Partners
Since the end of 2018, value sales within the luxury consumer goods industry has been significantly increasing in the Middle East Market.
Considering the overall Golf Countries, and its neighbourhoods such as Turkey, and Israel; Middle East geography has one of the largest young populations in the world and millennials are richer than the average and their willingness to buy is getting stronger day by day.
Driven by rising income levels, the countries’ luxury market has been exhibiting a continuous growth. Recognized as an expatriate community (majority population from mostly Europe, India, and Americas); the region remains one of the world’s top luxury destinations for Middle Eastern consumers, as well as for Chinese and European visitors.
Based on the category, the market has been segmented into Travel and Hotels, Cars, Personal Luxury Goods and Clubs & Communities. Currently, travel and hotels dominate this market; followed by cars, personal luxury goods, food and drink. On the basis of gender, the market has been segmented into males and females. Males currently account for the largest share in this market.
E-commerce has also become a divisive factor in a region built on traditional in-mall luxury shopping. Its rapid growth has partnered with the fact that millennials in the Middle East are richer than the global average, and have more willingness to spend online. According to a report released by Mashreq Bank’s senior president and head of payments, Pankaj Kundra, there was a marked 48 per cent rise in online retail spending (compared to just 6 per cent consumer card spending) last year.
According to Kundra’s report, “While brick-and-mortar merchants have already expanded their product offering into the e-commerce space, this expansion may be at the cost of the cannibalisation of their traditional business, through the equivalent growth in their e-commerce channel.”