Luxury spending on the rise

Spending on premium goods and experiences by consumers in the Middle East is on the rise, according to the new American Express Middle East Luxury Spending Tracker. It revealed that consumers plan to increase spending on luxury goods and experiences through the end of 2012, as their personal circumstances improve and they develop greater awareness of brands and high quality products. The American Express Middle East Luxury Spending Tracker surveyed a random sample of 1,000 residents drawn from the UAE, Bahrain, Jordan, Kuwait, Lebanon, Oman and Qatar. It found that residents of Qatar are the biggest buyers of luxury goods across the Middle East, closely followed by consumers in Bahrain. As the biggest luxury buyers, Qataris spend up to $5,000 a month on luxury goods, while consumers in Oman and Jordan are the most conservative shoppers, spending less than $250 per month. “Consumer attitudes towards spending have begun to improve significantly and there is a noticeable rise in spending on luxury goods and experiences across the region,” said Mazin Khoury, chief executive officer of American Express Middle East. As well as looking at levels of spending, the survey also explored the most influential factors when consumers make luxury purchasing decisions and where they prefer to shop. Goods over experiences Luxury products such as cars, high end electronic goods and fashion accessories were identified by respondents as preferred purchases over experiential luxury such as holidays and spa treatments this year. Fashion tops the list of preferred purchases in 2012, with 37 per cent of respondents saying they enjoy shopping for fashion-related items. Cars are also a leading luxury purchase in 2012, with 31 per cent of respondents planning to buy new vehicles this year. Automobile purchases are highest in the UAE with 42 per cent looking to buy new cars in 2012, compared to only 24 per cent of Bahraini respondents. Other favoured purchases included high-end electronic goods and personal accessories. In contrast to other countries in the region, consumer spending on food and dining out is remarkably high in the UAE, a likely reflection of the considerable array of international dining options in the country. Quality, brand key factors The survey also found that quality and brand name are the leading factors which influence consumers’ luxury purchasing decisions. “Quality is by far the biggest driver of luxury purchases among consumers, though the brand name also remains a key deciding factor. Those surveyed said that the brand name was key in determining spend, in addition to sales, price reductions and advertising. It is only in the UAE that a friend’s recommendation carried the greatest weight,” Khoury said. Dubai first for shopping When it comes to the ideal shopping destination, Dubai is almost universally seen as the prime location for purchasing branded luxury products, selected by 65 per cent of respondents. It was named the preferred destination by 88 per cent of respondents from the UAE, 81 per cent from Oman, 78 per cent from Bahrain and 67 per cent from Qatar. “Consumers today have become more conscious of the cost of products and services and insist on getting maximum value and rewards for their investment. The inclination towards acquiring tangible luxury goods as opposed to participating in luxury experiences is in keeping with the new consumer sentiment that demands greater value for money,” Khoury said. From : Khalij