As Global Growth Cools, Qatar's Retail Market Tells a Different Story Despite its relatively small population, Qatar looks set to remain a major player within the Gulf's luxury sector.
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Rising trade tensions between the US and China are beginning to have an impact on consumer habits and are threatening to end the recent bull-run enjoyed by the luxury goods market.
Against this backdrop, the Gulf's luxury market continues to outperform global trends; the region recorded $12.8bn of luxury goods sales during 2024, representing 6% year-on-year growth (compared to a -2% decline on a global level), according to a recent sector report from Chalhoub Group.
Despite wider micro-economic concerns, the outlook for the region remains broadly positive with the luxury market expected to maintain this rate of growth, fuelled by robust local spending, a growing tourism economy and an influx of wealthy expats. This will be supported by continued retail expansion, the arrival of new brands and the likely impact of Saudi Arabia's ongoing development boom.
Despite its relatively small population, Qatar looks set to remain a major player within the Gulf's luxury sector – driven by the country's strong purchasing power and enduring appetite for luxury goods and premium experiences.
However, some concerns have emerged over Qatar's ability to sustain a thriving luxury sector over the long-term. While a uniquely affluent population presents a huge opportunity for luxury brands in the country, it also presents distinct challenges. With great affluence comes great freedom. Many wealthy Qatari families have multiple homes around the globe and have sampled some of the best luxury brands and experiences that the world has to offer.
Meanwhile, there is a growing cohort of Qatari individuals and other Qatar-based entrepreneurs operating businesses in global cities such as London, New York, and Paris.
On the face of it, it is understandable why this might give rise to questions over the future of Qatar's domestic luxury sector. Do luxury brands really need to expand their presence in Qatar when its most affluent buyers are regular visitors to 5th Avenue, Bond Street, Via Montenapoleone and Avenues des Champs-Élysée?
Based on a range of key factors, the answer appears to be an unequivocal "yes". Despite rising tourism numbers, Qatar is not as dependent as markets such as the UAE on wealthy international visitors and expats. The appetite for high-end luxury largely comes from an affluent and well-informed local population, which expects to be well served by global luxury brands. They want access to the latest product launches, and they want it on their doorstep with the levels of service, discretion and attention that they have come to expect.
There is also the growing conflation between retail and leisure experiences. A decade ago, wealthy Qataris would have needed to board a plane to experience brands such as Hakkasan, Nobu and Bagatelle, whereas they are now all present in Doha, and offer a perfect accompaniment to shopping excursions.
Qatar's evolving cultural calendar is having a similarly positive impact with more events, exhibitions and experiences on offer. National cultural hubs such as Sheikh Faisal Museum
and the Museum of Modern Arab Art and the Museum of Islamic Art are attracting increasing visitor numbers and enhancing the country's cultural and leisure scene, which has a corresponding effect on it shopping and dining scene.
Finally, and somewhat counter-intuitively for a conversation about luxury retail, there is the issue of (relative) affordability. Rising inflation, the looming threat of US tariffs and the abolition of tax-free shopping in the UK, have made shopping in Qatar a more competitive proposition. During a recent business trip to London, I was struck by the cost of a number of items in flagship stores that commanded a premium of around 30% versus the equivalent purchase in Doha. On that basis, I kept my wallet in my pocket until I got home - and know of plenty of friends and colleagues doing the same.
These unique characteristics mean that Qatar's luxury sector is in better health than that of most other economies. So long as brands continue to innovative, to focus on the experience and to demonstrate authenticity, they will likely to be rewarded by a high-spending consumer base who want access to the world's best brands and products on their doorstep.
