Middle East: Luxury Under Strain

The Middle East accounts for 6% to 8% of the global luxury market and is one of the few areas on the rise. The United Arab Emirates (UAE) alone make up 50% of this, with over half of the luxury boutiques located there (as well as in Saudi Arabia). The Dubai Mall, the flagship of luxury, receives 110 million visitors per year. Since the outbreak of the war, sellers have turned to remote sales in an attempt to capture a lucrative "revenge buying" phenomenon, discovered during Covid when the privileged few, confined at home, were feverishly buying online. In the short term, this seems to be working, according to major brands. /public-objects/22ad9b03-ebb1-4ab2-9390-c04f0ef31697-3d6f7cfb-5521-4e84-9813-ba360b060f84-dmcc%20dubai.webp Image sélectionnée But Dubai is not just a major market for Middle Eastern luxury, it is also a global hub for diamonds through the Dubai Multi Commodities Centre (DMCC) – which houses the Dubai Diamond Exchange (DDE) – virtually at a standstill since the bombings. Over a billion rough and cut carats have passed through Dubai in the last five years. In 2024 alone, 179 million carats were traded. Another country involved is Israel, with the Ramat Gan diamond exchange. The most severe consequences are primarily measured in the long term. A barrel of oil priced over €100 could permanently weigh down the circulation of transport and goods, leading to a slowdown in demand. Simultaneously, geopolitical tensions strengthen the dollar, which in turn increases the price of diamonds, primarily denominated in this currency. Customers will then tend to postpone their purchases or buy smaller stones, which will reverberate upstream, slowing down raw purchases accordingly. For the diamond industry already in turmoil (tough competition from synthetic diamonds, falling prices, sluggish purchases in the United States and China), this is yet another piece of bad news ...