Luxury Brands Firms operating in Dubai Airport Freezone Keep an Eye on GCC markets to Increase Sales

High end luxury brands dealers operating in Dubai Airport Freezone have changed their tactics by increasing sales in the GCC rich-countries to phase out any negative impact caused by the financial crisis. Benefiting from their presence in Dubai Airport Freezone, Luxury products dealers are upbeat of the vibrant Gulf markets hungry for high-end brands.

May Luxury Brands experts, said, " Our Middle East markets have been slightly hit by the worldwide downturn, however this has helped us innovating new marketing tactics and open new markets with new different variety of products.

According to the Luxury Goods Worldwide Market Study released by Bain & Company. "luxury goods markets, one thought to be immune to the ebbs and flows of economic fluctuations, but the impact is felt though slight. The slowest growth rate stands in stark contrast to the +9 per cent growth seen in 2006 and the +6.5 per cent growth seen in 2007."

The study predicts as much as a -7 per cent decline in global luxury sales for 2009 using constant exchange rates, in contrast to a possible -2 per cent decline when using current exchange rates. The study was commissioned by Altagamma, the Italian association of luxury goods companies.

Trade experts believe that although the region will not be totally insulated from the credit crunch unlike the US and Europe, the Middle East will be less affected.

Mohammed Ali Bin Suwailem, Director of Sales, said, " We always promote strategic location of Dubai Airport Freezone for we believe it counts great deal when it comes to target products to the neighboring GCC countries.

"We are hardly one hour few minutes away from any one of the Gulf countries, therefore we play an essential role in open opportunities for any company wants to get into these markets.

"Both high end luxury brands, mid level and primary level international brands targeting the Gulf, Middle East and Africa have a strong presence in the Dubai Airport Freezone which is strategically located.

Gerald Schutzlhoffer, Managing Director, Enjoy Bijoux a company which caters to the luxury segment with high end jewellery and luxury watch brands such as Chronoswiss, Perrelet, Hanhar, Jacques Lemans, Faberge, Meister, Gellner, Humphrey and Buben and Zorweg said "Customers in the region are brand conscious and the luxury segment in the region has tremendous potential. The market is growing significantly and we have experienced consistent growth."

Another factor which is helping the jewellery sector in the region is the presence of a strong bridal market. "It is part of Asian tradition to gift gold and diamond jeweler during marriages and engagements. This aspect is helping the sector and in spite of global recession the industry has not experienced a major setback so far. The tourist market has been affected and this has caused some slow down in the trade, but still we can say the market is upbeat," said Rihen Mehta, Executive Director, Rosy Blue. It is one of the world's renowned diamond and jeweler companies with B2B clients across the globe.

Mehta added the market catering to high-net worth individuals has remained resilient and unaffected.

Amjad Saeed of The Mosbach Group said that "We deal with exclusive and premium diamonds and writing equipment. Whatever happens, the high-end luxury sector is not affected. We have seen this over the years."

He added that for high-net-worth individuals certain products are related to their personalities and lifestyles and "they are not ready to compromise on anything."

The company is the distributor of certified diamonds and Italian writing instrument brand Visconti.

"But in general, the market is hesitant and is thinking considerably before making any purchase."

Mehta believes that the Middle East, particularly Dubai will be better able to tackle the slowdown thanks to its strategic location. It caters to nearly three billion people in a radius of five hours flying time. About 30 to 40 per cent population is between 20-40 years of age and they are the primary buyers of luxury goods and jewellery.

Samir Boghos of Time Bridge, a premier brand management company in the Middle East agrees with Mehta, "Since the Middle East is an emerging market and is yet to reach the point of saturation it will perform better than other matured markets. Besides, this region is largely untapped and possesses large disposable income so the growth of luxury growth sector might slowdown for a short time but it will not be adversely affected."

However, he adds that this "Is not the right time to launch a new brand or introduce a revolutionary concept. "This is the time to play safe. Brands all over the world have frozen launches of their new lines and ranges. People are in general cautious about their spending so it is time to cut our clothes accordingly."