From Camels to Cadillacs

Dubai has proclaimed itself the next luxury goods capital of the world.  So has Suzy Menkes, fashion editor of the International Herald Tribune, who calls Dubai a global leader in the world of luxury shopping. 

So it seems appropriate for this city to host the Middle East’s biggest jewelry show, the Watch and Jewellery Dubai event, this week. 

Because of its location in the Gulf region, Dubai has historically been a major trading center.  Rising out of the Arabian Desert, it has moved from camels to Cadillacs as one of the most modern, progressive, and wealthiest markets in the Middle East.  

Retail sales in Dubai, especially of luxury goods, have been growing in excess of 20 percent this year, according to Dubai’s largest real estate developer, Emaar Properties.  Diamond sales have kept pace, posting gains in the 20-25 percent range so far this year, according to a sample of Dubai jewelers conducted by the DTC. 

Dubai isn’t an isolated example of strong luxury goods growth in the Middle East.  Overall demand for jewelry in the Gulf region has grown by about 11 percent so far in 2005.  Demand in the United Arab Emirates (UAE) is even stronger – up 13 percent year-to-date. 

The DTC says that diamond and diamond jewelry demand accelerated to a dramatic 15 percent gain in the UAE in the third quarter, and is on track to grow by at least 15 percent for the full year 2005.  These trends reflect the growing pace of demand for luxury goods, as the graph below illustrates.

Dubai, dubbed the “City of Gold,” has a solid reputation for its jewelry.  It has more jewelry stores per capita than almost any city in the world.  Today, driven by tourism, development, a growing population, and, of course, oil and gas, shoppers in Dubai are snapping up luxury goods, including jewelry, at a break-neck pace.  In the city of Dubai, jewelry sales are estimated to be more than $1.5 billion, or about 1.3 percent of global demand.  Diamond jewelry sales in Dubai are estimated to be $300 million to $400 million. 

Dubai jewelry shoppers appreciate the best.  When you see a Louis Vuitton bag – whether slung over the shoulder of an American in a too-tight tee-shirt and overstuffed slacks or carried by a local burka-clad female who views the world from behind gauzy eye-slits – you know that it is the real thing.  Because of strong copyright laws, Dubai is nearly devoid of counterfeit goods.  

Local tourism officials claim that nearly 70 percent of all tourist visitors who visit Dubai go to the Gold Souk (bazaar), with 95 percent of them making a purchase. 

Further, gold jewelry sold in Dubai is of the highest quality, due to regular checks by the Municipality authorities.  In addition, the Dubai Gold and Jewellery Group has set up a gold analyzer in the Gold Souk to provide confidence to both retailers and consumers about the purity of their gold purchase.

While fine goods are available at top luxury malls such as the Mall of the Emirates as well as in the city’s souks – over 275 of Dubai’s 800 retail jewelers are located in the Gold Souk – the public will be allowed to shop at the Watch & Jewellery Dubai show during its final two days. 

Even though traffic at the Watch & Jewellery Dubai event has been softer-than-expected in the first couple of days, show exhibitors are anticipating an onslaught of shoppers beginning on Thursday evening, when the public will be admitted.