Middle East a growing market for premium watches

Dubai

Editorial team of MPParabia* - Swiss watch exports to the Middle East have been gaining momentum both in terms of numbers and value. In several instances, sales growth of Swiss watches in the Middle East have been recording double digit quarterly growth in 2006 and H1-2007 over corresponding periods in the previous year.

Editorial team of MPParabia*

Swiss watch exports to the Middle East have been gaining momentum both in terms of numbers and value. In several instances, sales growth of Swiss watches in the Middle East have been recording double digit quarterly growth in 2006 and H1-2007 over corresponding periods in the previous year. According to a 2006 report compiled by the Swiss Watch Federation, the United Arab Emirates (UAE) in 11th position and Saudi Arabia in 14th position are currently among the top 15 export destinations for Swiss watches.

Meanwhile, sales outlook for the coming third quarter as well as the second half of 2007 appears to be bullish and on the upswing with no sign of recession. The outlook for the Middle East in general and the Gulf Cooperation Council (GCC) in particular is optimistic. The reasons are several. Firstly, the current high prices of oil from which many countries in the region particularly the GCC draw their incomes from, implies that the oil exporting countries will continue to have healthy and robust economies. The Institute of International Finance (IIF) in Washington DC predicted that oil revenues would exceed USD $ 300 billion in 2007 (double that in 2000).

A massive real estate development

The well-developed infrastructural base coupled with pragmatic economic policies pursued by particularly the GCC countries has fuelled unprecedented growth for the region. There has been massive Foreign Direct Investment in the GCC. Inside the GCC, the United Arab Emirates at USD $ 600 billion, Saudi Arabia at USD $ 450 billion and Kuwait at USD $ 400 billion are top attractors of foreign capital.

This has resulted in massive real estate development and as a spin-off, an influx of well-heeled investors and a professional and educated workforce from the world. The real estate market in the GCC, home to the world’s biggest projects market per capita basis, is valued at over USD $ 1 trillion and growing phenomenally. The GDPs of the GCC countries are also among the highest in the world. These have been significant contributory factors to the retail expansion boom. This is evident from the increase in the number of new, independent, stand-alone boutiques for top watch & jewellery brands, expansion of existing store retail space, the proposed opening of new malls, the entry of new brands and launch of new models/collections from existing brands.

A surfeit of diamond jewellery brands

Speaking at the recent Second AWJ Roundtable Discussions initiated and hosted by MPParabia in June 2007, Amit Dhamani, CEO & MD, of UAE-based Dhamani Jewellery underscored this interesting development. “The proliferation of diamond jewellery is a new, exciting and unprecedented development, he noted. About 5 to 10 years ago there were barely any major diamond jewellers in the Middle East. This of course has now changed radically and now we see a surfeit of diamond jewellery brands.” Commenting on the subject of the increase of retail outlets in the region, Dhamani provided a snapshot of what the future has in store. “For example when fully operational, the Mall of Arabia and the Dubai Mall (purported to be the biggest mall in the world and scheduled to be open in 2008) will be home to 250 outlets and in both cases many of these will be retailing diamond jewellery,” he told the AWJ Roundtable symposium.

The same sentiment was echoed by Mahmoud Jaafar, a leading and eminent Bahraini entrepreneur who in 1961 founded Asia Jewellers, one of the reputed, long-standing and largest retailers of a string of the finest watches and premium jewellery global brands in the Kingdom of Bahrain. As the company now enters its fifth decade, it plans to open a slew of new boutiques for the Cartier, Chanel, Versace, IWC and Audemars Piguet to name only a few. Separately, an exclusive Louis Vuitton boutique will also be opened shortly in the Kingdom.

A continued and sustained all-round growth

Another index of the vigorous health of the industry is the renewed interest in the Middle East by international watch/jewellery brands best reflected in the continued expansion both in terms of exhibitors and exhibition space of trade exhibitions. Notable among these are the long running Jewellery Arabia series and the Doha International Jewellery & Watch Exhibition both of which have registered considerable year-on-year growth.

As a case in point, increased demand for space from exhibitors at Jewellery Arabia 2007 has prompted show organizers Arabian Exhibition Management to commission a 1,000 sq. m. temporary hall to extend the existing facilities at the Bahrain International Exhibition Centre. With this addition, Jewellery Arabia 2007 to take place from 13 to 17 November 2007 will be the largest in its illustrious 16 year-history. Likewise, as proof of its popularity, the 2008 edition of the Doha International Jewellery & Watch Exhibition will move to an all-new, state-of-the-art, purpose-built 45,000 sq. m. Exhibition Centre from the current 10,000 sq. m.

For now, the Middle East continues its bull run. How long will the boom last?-that appears to be the question looming in the minds of retailers, marketers, local and international analysts and all associated with the trade in the region. The Middle East is known for its resilience and its ability to bounce back even during periods of relative recession and there is growing confidence that the region will be able to pull it off as is demonstrated by the continued and sustained all-round growth and development. Meanwhile, retailers and distributors in the Middle East have never had it so good as they continue to enjoy unfettered growth cash in on the good times! ■

*Publishers of Arabian Watches & Jewellery

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