The percentage of consumers in the UAE, Russia and China claiming to have increased their spending in the luxury market in the last five years was 70 per cent, compared to 53 per cent in the more mature markets such as the EU, US and Japan, a report said.

The fourth annual Global Powers of Luxury Goods report issued by professional services provider Deloitte Global examines and lists the 100 largest luxury goods companies globally, based on publicly available data for consolidated sales of luxury goods in FY2015 (ending within the 12 months to 30 June 2016). It also discusses the key trends shaping the luxury market and provides a global economic outlook.

“Travel and tourism is still a great growth opportunity for the luxury sector,” said James Babb, Clients and Industries leader, Deloitte, Middle East.

“Almost half of luxury purchases are made by consumers who are travelling, either in a foreign market (31 per cent) or while at the airport (16 per cent). This rises to 60 per cent among consumers from emerging markets, who typically do not have access to the same range of products and brands that can be found in more mature markets.”

“The market in the Middle East continues to represent a big opportunity for luxury brands: luxury markets in Abu Dhabi and Dubai have helped to promote these cities as desirable shopping destinations. Well established big-name brands have performed well in the region, and tourism is a major driver of sales in Dubai. However, the market saw a significant slowdown in 2016, caused by the low oil prices, higher gold prices and an increase in the cost of living,” added Babb.


“The region is likely to feel the impact of political unrest as well as global economic uncertainty, but further growth is nevertheless expected as Dubai and Abu Dhabi continue to be attractive shopping destinations.”

Based on publicly available data, the world’s 100 largest luxury goods companies generated sales of $212 billion in FY2015. The average luxury goods annual sales for a top 100 company is now $2.1 billion.

“The essence of luxury is changing from an emphasis on the physical to a focus on the experiential and how luxury makes you feel,” said Babb. “However premium quality remains a ‘must have’ and consumers retain a keen eye for craftsmanship and hand-made products.”

Key findings from the report include:

•    Luxury goods sales growth up – sales for the world's 100 largest luxury goods companies grew by more than 3 percentage points in FY2015. Most currencies weakened significantly against the US dollar, which benefited many multinational companies based in other regions who experienced favourable currency effects, driving up reported sales. In the Top 100, only six companies reported double-digit sales decline in FY2015; half of these were jewellers, the product sector which continued to experience volatile demand.

•    Italy is once again the leading luxury goods country in terms of number of companies, while France has the highest share of sales – with 26 companies in the Top 100, Italy has more than double the number based in France. However, the predominantly family-owned Italian companies are much smaller, with average luxury goods size of $1.3 billion, which is around a quarter of the average US$5.1 billion luxury goods sales for the French companies.

•    Companies in the multiple luxury goods sector nearly double sales growth – compared to the previous year and leads profitability, while bags and accessories continues to be the fastest growth sector. – TradeArabia News Service