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30 Mar

Chinese Consumers to Drive Luxury Sales within the Middle East

SHANGHAI — Based on a recent report from Barclays, a healthy luxury consumption rebound within the Middle East might be partly fueled over the approaching months by China‘s reopening.

“We expect Chinese tourists to supply a lift to Middle East luxury sales over the subsequent six to 12 months, which ought to be visible from the second quarter onward,” Barclays wrote within the report.

“We estimate that Chinese tourism contributed around 10 to fifteen percent of luxury sales in Dubai pre-pandemic,” the report continued. “Taking a look at flight data, it is evident that travel from mainland China toward Dubai is recovering at a much faster pace than toward Europe since year-to-date, because of higher flight capability and targeted marketing campaigns from the town toward Chinese tourists.”

Based on Barclays, in 2019, Chinese shoppers were the fifth-largest spenders in Dubai.

A packed agenda of major events within the Gulf this yr, including Formula 1 Grand Prix races in March and October, and Expo 2023 in Doha, Qatar, launching in October, will develop into primary drivers of tourism this yr.

To lure more travelers, Saudi Arabia’s Red Sea Project, an ambitious tourist hub with bewildering landscapes and hyper-luxury hotels, may also begin to open in phases this yr.

The Barclays report said the hard luxury sector, specifically corporations reminiscent of Compagnie Financière Richemont and Swatch Group, will profit probably the most from incoming tourism within the region, as prices for jewelry and watches are inclined to be 10 percent cheaper in comparison with Europe.

“A watch dealer based in Riyadh recently told us that he continues to see very strong demand for high-end watches amongst Middle Eastern collectors, who’re amongst probably the most enthusiastic on this planet,” Barclays said.

The report pointed to Richemont-owned brands Cartier and Van Cleef & Arpel for his or her growth momentum within the Middle East, reflecting “a rapid change of tastes, which is seeing local consumers turn toward branded jewelry, particularly amongst younger consumer cohorts,” the report said.

As for the local clientele, Ramadan, the monthlong sacred holiday that began on March 22, might be a key sales driver.

Some notable brand initiatives include Dior Men’s first Ramadan collection and Valentino’s first exhibition in Doha.

This past week, the Italian luxury fashion house organized a whirlwind trip for its Chinese VIP clients before the exhibition closes on Saturday.

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