1. LUXURY RETAIL IN UAE
CASE STUDY
By: Anu and Sakshi
1/27/2014
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2. LIST OF CONTENTS
1. Luxury retail in the world
2. Overview of UAE
3. Luxury retail in UAE
4. Value dimensions of luxury retail in UAE
5. Opportunities and challenges of luxury retail in UAE
By: Anu and Sakshi
1/27/2014
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3. LUXURY RETAIL - WORLD
Top shopping destinations of the world (September 2013)
1. New York
2. Tokyo
3. London
4. Kuala Lumpur
5. Paris
6. Hong Kong
7. Buenos Aires
8. Vienna
9. Dubai, UAE
10. Madrid
By: Anu and Sakshi
1/27/2014
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4. LUXURY RETAIL - WORLD
Opportunities to be tapped
 Effective product differentiation
 Continued high-quality standards
 Careful distribution
 Holding the price line
 Tighter cuddling of the customer
 Smart marketing
 The mantra this year too – to treat the customer like
family and, in return, get almost unconditional love
By: Anu and Sakshi
1/27/2014
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5. LUXURY RETAIL - WORLD
Major challenges
 Higher taxes in France and the United States
 Slowing demand in China and Europe
 Counterfeiting
 Store overexpansion
 Product overexposure
 Over-reliance on Flash (social media)
By: Anu and Sakshi
1/27/2014
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6. UNITED ARAB EMIRATES
 Geography
By: Anu and Sakshi
1/27/2014
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7. UAE OVERVIEW
 Politics: Stable, safe and liberal
 Economy: High standard of living because of oil wealth;
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diversification has dampened the shocks of oil price fluctuations;
the UAE is a regional trading and tourism hub
International: Tension between the UAE and Iran over disputed
Gulf islands; the US treats the UAE as an ally in its fight against
militants
Fourth largest Arab League economy United Arab Emirates
Non--oil GDP growth is driven by transportation, finance,
tourism, service and real estate sectors
BCG report says that out of 1000 households, 40 households
posses private wealth of at least $1 million
By: Anu and Sakshi
1/27/2014
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8. UAE OVERVIEW
 Modern
 Escalating urbanization
 Offers luxurious lifestyle to expatriates
 Surge in economic growth of 4.4% in inflation (2012)
 Banking, tourism and trade expected to grow at 3% (2012-2015)
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in which tourism tops the list
Retail sector contribution to GDP of UAE is 14% and it will
further grow by 7%(2011-2015)
Data shows that UAE is well ahead of BRICS in luxury retail
UAE luxury retail grew in revenue by $581 million
Impressive economic growth, rising household consumption,
By: Anu and Sakshi
1/27/2014
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9. The UAE respondent’s views on the meaning of luxury
Do not know/refused to answer
4%
Others
7%
Time to do exactly what you want
10%
Something that appeals to your sense
11%
Everything over and above what you you
need
20%
more about quality than price
22%
luxury is a lifestyle
26%
0%
5%
10%
15%
20%
25%
By: Anu and Sakshi
30%
1/27/2014
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10. LUXURY RETAIL IN UAE
 Aspirational behavior and preference for international luxury
brands among expatriates, tourists and young locals are
alike and is high
 It is strongly increasing by various shopping carnivals and
events as well as rapid development of modern retail
infrastructure
 Per capita consumption of cosmetics and fragrances in the
UAE is one of the highest in the world
 Luxury goods are priced high because of less competition
and higher consumer base. This is not logical considering
that UAE is tax free. This has to do with geopolitics,
bilateral trade conventions and constraints set by national
government
By: Anu and Sakshi
1/27/2014
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11. LUXURY RETAIL IN UAE
 56% of expats receive a disposable income of over US
$3,000 per month
 Average household spending power in the UAE stands
at $14,400 per annum, according to property consultant
Colliers International
 UAE consumers spend a lot on food and beverages
By: Anu and Sakshi
1/27/2014
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12. OPPORTUNITIES FOR LUXURY RETAIL IN UAE
 Traditional affinity towards luxury and an increasing appetite of both
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younger generation and mature consumers for top global brands
The increasing ‘intra-region’ tourism and the emirate’s ability to
attract foreign luxury consumers – mainly Russians, Indians and
Africans
The new Dubai Design District, which aims to cater to the needs of
the fashion industry and is in line with the objectives of the Tourism
Vision 2020.
The middle class is disappearing and the rich are getting richer
Chinese people are traveling to Dubai, and they are buying
products of luxury brands
Massive expansion of malls, new projects and infrastructure
development
By: Anu and Sakshi
1/27/2014
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13. The Distribution of Gross Leasable Area, 2010
By: Anu and Sakshi
1/27/2014
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14. CHALLENGES FOR LUXURY RETAIL IN UAE
 Rising price of food, rent, education and transportation
- middle rung are not going to buy branded stuff
 Too many malls - increased competition
 High retail rentals
 To keep inflation under control
 High level of employee turnover and joblessness
among nationals
 Counterfeit brands and difficulty to take legal action
against them
 Shoppers will expect easy-to-navigate ecommerce and
mobile commerce offerings
By: Anu and Sakshi
1/27/2014
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15. Internet Growth and Population Statistics
in UAE
YEAR
2000
Users
Population
% Pop.
Internet Growth735,000
and Population Statistics in UAE
3,750,054
19.6 %
2003
1,110,200
3,750,054
29.6 %
2005
1,300,000
3,750,054
34.7 %
2009
3,558,000
4,798,491
74.1 %
2010
3,777,900
4,975,593
75.9 %
2012
5,859,118
8,264,070
70.9 %
websites for online shopping in UAE
was souq.com, cobone.com,
amazon.com, and markavip.com
By: Anu and Sakshi
1/27/2014
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16. KEY DIMENSIONAL VALUES
 Functional and physical attribute- design, quality,
recognition and reputation
 Emotional - buying experience, flexible payment
method, soft benefits, buying convenience, bargains
with activities, promotions and prizes
 Symbolic – related to travel, place, shopping center
By: Anu and Sakshi
1/27/2014
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17. ADDF
By: Anu and Sakshi
1/27/2014
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18. Wafi city spa
JBR hotel
Deira Gold Souq
Raffles hotel
By: Anu and Sakshi
1/27/2014
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19. Bastakiya
Madinat Jumeira
Anantara Dubai
Anantara Abu Dhabi
By: Anu and Sakshi
1/27/2014
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20. Danat Jebel Dhanna Resort
Al Maha Aromatherapy and Rasoul treatment
Dubai Marina
Medical tourism
By: Anu and Sakshi
1/27/2014
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21. Dubai Mall, Burj Khalifa,
The Address, Dancing
Fountain
Dubai Shopping Festival
Dubai Summer Surprises
Mall Of the Emirates
By: Anu and Sakshi
1/27/2014
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22. Dubai Outlet Mall
Palm Dubai
Mushrif Mall Abu Dhabi
Dubai World
By: Anu and Sakshi
1/27/2014
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23. Cultural heritage of UAE
By: Anu and Sakshi
1/27/2014
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24. Cayan Tower
Princess Tower
JW Marriott Marquis
Yas Viceroy AD
By: Anu and Sakshi
1/27/2014
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25. Kidzania
Sega Republic
Dubai Acquarium
Dubai Ice Rink
By: Anu and Sakshi
1/27/2014
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26. Reel Cinemas
Ibn Battuta Mall
Miracle garden
Burj Al Arab
By: Anu and Sakshi
1/27/2014
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27. Luxury villas
Luxury cars
Luxury apparel
Luxury electronics
By: Anu and Sakshi
1/27/2014
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28. Luxury watches
Luxury perfumes
Luxury cosmetics
By: Anu and Sakshi
1/27/2014
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29. Key luxury distributors in UAE
By: Anu and Sakshi
1/27/2014
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30. Upcoming luxury projects in UAE
By: Anu and Sakshi
1/27/2014
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