Luxury Timepieces in the United Arab Emirates

2021 DEVELOPMENTS

Luxury timepieces benefits from relaxing of restrictions and tentative return of tourism

With no further lockdowns in 2021, stores have reopened and a relaxing of restrictions is easing mobility amongst consumers who are becoming increasingly confident about returning to retailers to shop. While travel has also resumed, there is still a need to perform frequent PCR testing for those who spent their summer holidays overseas, while residents who chose not to instead made purchases locally due to pent-up demand and greater disposable incomes.

Omnichannel approach prevails while retailers continue to maintain exclusivity

Despite the United Arab Emirates continuing to open up in 2021, retailers are increasingly focusing on expanding their online presence by fostering an omnichannel approach to sales and to offer consumers an enhanced shopping experience. Most luxury timepiece players and their mono-brand stores including TAG Heuer, and Montblanc, now feature product ranges and information online which allow consumers to either shop online or contact a sales representative who can offer them further information before making a purchasing decision.

Competition from pre-loved items remains

Consumers in the United Arab Emirates continue to be open-minded about purchasing pre-owned luxury items, including luxury timepieces. The buying and selling of these items is prevalent through dedicated online sites such as The Luxury Closet offering brands such as Rolex, Hermès and Chopard, although the number of websites that now specialise in the sale of classic timepieces continues to expand.

PROSPECTS AND OPPORTUNITIES

Competition from smartwatches to prevail

While demand for luxury timepieces is set to fully recover to pre-pandemic levels over 2022 with predictions for further growth over the forecast period, smartwatches under luxury timepieces are likely to experience more dynamic growth rates due to investments by key brands and products such as Apple Hermès iWatch. Millennials and Generation Z consumers are particularly enthusiastic about investing in smartwatches which they prefer to traditional timepieces due to their functionality and connectivity.

Omnichannel approach as a result of e-commerce acceleration

As the further development and acceleration of e-commerce is likely over the forecast period in the United Arab Emirates, brands are predicted to increasingly consider adopting an omnichannel approach to sales and engaging with consumers, integrating in-store technology as well in product development. TAG Heuer has successfully expanded into luxury wearables with Tag Heuer Connected smartwatch variants over the years, which retail both in-store and via its own e-commerce platform, where it caters specifically to the United Arab Emirates and Middle East customers and is expected to further capitalise on this platform in the coming years.

Stronger growth will depend on further global vaccination efforts, although category will remain resilient

Luxury timepieces is well-known for being a resilient category that tends to continue to perform well in the face of upheaval. Richemont (Dubai) FZE’s Cartier brand, for example, was established in 1847 and has survived two world wars.