And how brands can break through to the new generation of consumers in the Gulf, the region with the greatest potential for luxury
While global luxury markets have faced a downturn, the Middle East stands out as an exception. Cities like Riyadh and Dubai are not only thriving as luxury shopping destinations but are also emerging as the fashion capitals of 2025. At the heart of this shift are the region’s younger generations, whose growing purchasing power and increasingly sophisticated tastes are fuelling this luxury boom. For brands, the Gulf’s youth market represents one of the most promising and lucrative opportunities in global luxury today.
Can Middle East’s Luxury Market Double by 2030?
According to a recent report by Boston Consulting Group (BCG) in collaboration with Altagamma, the personal luxury market in the Middle East, valued at €15 billion in 2023, is set to nearly double by 2030, with estimates ranging from €30 to €35 billion. The UAE, with Dubai as its flagship city, and Saudi Arabia, led by Riyadh as the financial powerhouse, are expected to be the main drivers of this growth. Specifically, Saudi Arabia’s personal luxury market alone is forecasted to grow from €3 billion in 2023 to around €6 billion by 2030, reflecting a compound annual growth rate (CAGR) of 10-12% between 2022 and 2030. This expansion is driven by a combination of local development under Vision 2030, a surge in domestic consumption, and the region’s growing stature as a high-end tourist destination.
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Building on this momentum, the Altagamma Consensus forecasts a 5% growth in the Middle East’s luxury personal goods market by 2025. Analysts underscore the Gulf region—particularly Saudi Arabia—as a crucial market underpinned by significant real estate investments and an increasingly affluent consumer base.
Saudi Arabia’s Untapped Potential: Vision 2030 and the Growing Power of Young, Affluent Consumers
In 2023, BCG and Altagamma already highlighted in their True-Luxury Global Consumer Insight report that Saudi Arabia holds significant untapped opportunities driven by several key factors. At the forefront is the rapid acceleration of local development under Vision 2030, as previously noted, which is directing investments exceeding €1 trillion across various sectors such as infrastructure, healthcare, education, tourism, transport, technology, and digitalisation.
Moreover, the retail luxury market in Saudi Arabia currently has a penetration rate of only 7%, compared to 26% in the European Union, meaning a large portion of luxury spending—more than 40%—is taking place abroad. High-end tourism is also set for substantial growth, with eight mega-projects expected to be completed by 2030 and a projected 7.5-fold increase in leisure tourism visits, rising from 4 million in 2022 to 30 million in 2030. Furthermore, the region shows a strong inclination for increased luxury spending—30%, compared to the global net purchase propensity of 23%—which is primarily driven by younger generations, with over 60% of the population under the age of 30, as well as wealthier clients.
How Gulf Malls Are Evolving into Premier Destinations for Lifestyle (Beyond Retail)
Middle East’s thriving retail destinations, such as Dubai Mall, are not just shopping hubs—they have become symbols of a luxurious, sophisticated lifestyle.
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According to Vogue Business, malls in the Gulf are increasingly offering experiences that transcend traditional retail, incorporating branded cafés, exclusive hospitality spaces, and curated events designed to enhance the customer experience and foster deeper human connections.
Why Western High-End Brands Are All Eyeing the Middle East
Given the immense potential of the region, many Western brands and European groups are now turning to the Middle East to expand their businesses, with the Altagamma Consensus 2025 identifying it as the most promising market across all luxury sectors.
A prime example is the partnership between Renzo Rosso’s OTB Group and the Chalhoub Group, which seeks to bolster the presence of the Italian conglomerate’s luxury brands, including Jil Sander, Maison Margiela, and Marni, in the Middle East. The agreement seeks to establish an integrated retail network, with significant investments committed to opening new stores and enhancing the brands’ e-commerce platforms.
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Signed in 2024, the partnership plans to open over 15 retail stores in the next five years, focusing on key markets such as the UAE, Qatar, Saudi Arabia, and Kuwait. This initiative will build on the existing Maison Margiela boutique in Dubai Mall and expand further into major shopping centres and concept stores across the region.
At this stage, it’s vital to understand who the luxury consumers in the Gulf are and which brands they favour, as well as to gain expert insights into the region’s rapidly expanding market.
What Do Middle Eastern Consumers Really Want from Fashion?
Middle Eastern luxury shoppers are known for their impeccable style and attention to detail. To capture the interest of these sophisticated buyers, brands must craft collections that reflect the region’s unique aesthetic—couture-inspired designs made from luxurious fabrics like silk and linen, adorned with intricate embroidery or paired with expertly crafted jewellery. Floral and colourful prints in shades of black, white, green, and grey dominate the collections, while chic dressing is not merely a personal choice but a cultural necessity that signifies respect and status.
The Gulf’s Best-Sellers: European Icons vs. Emerging Local Designers
In 2024, the luxury market in the Gulf was largely dominated by European powerhouses such as Hermès, Chanel, Dior, Valentino, Prada, Versace, Saint Laurent, Gucci, and Alexander McQueen, with Rolex leading the jewellery category. Yet, the longstanding belief that luxury is synonymous with Paris or Milan is being swiftly challenged.
Local designers are gaining ground, winning over consumers with their extravagant designs, intricate craftsmanship, and commitment to the highest quality materials. Notable regional brands like Elie Saab, Zuhair Murad, and Ziad Nakad are making significant strides, all while championing values like tradition, sustainability, and personal expression.
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The Expert’s Take
Elmira Medins, a renowned made-to-measure, demi-couture, ready-to-wear, and accessory designer with deep ties to both Paris and the Middle East, shares her insights into the region’s latest fashion trends: “In the Gulf, young consumers are increasingly focused on how their clothing and accessories highlight their faces. Gold is a favourite choice, as it enhances the complexion. There is a strong desire to express individuality, with women often opting for bags crafted from exotic leathers or jewellery made from precious metals. Sequins, feathers, and other eye-catching details are also incredibly popular, conveying a sense of joyful femininity.”
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Karolina Korockina
MA in Fashion & Luxury Brand Management, Paris