06 September 2021
Kuwait boasts the presence of several major luxury brands such as Prada, Gucci, Louis Vuitton and Chaumet, Bottega Veneta etc. Ranking 13th in the world in terms of per capita GDP, its affluent and brand conscious population, young demography, and a growing population position Kuwait’s luxury retail market favorably. A dedicated luxury retail district in The Avenues, the largest mall in Kuwait, homegrown luxury brands like K7L and e-commerce players such as Chic Kuwait further highlight the uptake of luxury retail in Kuwait.
The luxury retail sector in Kuwait has not escaped COVID-19 unscathed. Luxury and franchise-based retailers such as Alshaya had seen sales decrease by 95% overnight. While possibility of subsequent waves of COVID-19 and measures such as vaccinated individuals only being allowed in the malls continue to affect the sector, vaccination of 70% of Kuwait’s population offers cause for optimism for the luxury industry in Kuwait for 2021 and beyond. Consumer spending is also expected to improve 4.1% y/y in 2021, after the contraction faced in 2020.
COVID-19 has emphasized the advantage of an omni-channel retail model. Trafalgar, a luxury retailer founded in Kuwait in 1972, has launched its online shop named ‘Its Luxury’ in June 2020. The touch and feel aspect of instore shopping and the experience in itself, would sustain the brick and mortar stores in luxury retail as indicated by a recent survey on luxury retail in Kuwait, wherein 65% of the respondents preferred to shop instore for luxury items.
Additional trends that are likely to leave a mark are sustainability and quiet luxury that is understated and aesthetic. For example, Stella McCartney, a socially-responsible label that focuses on sustainability has recently set shop in Kuwait. The broad umbrella of segments that luxury retail could operate offers additional opportunities. In the backdrop of greater importance being placed on health, globally, high-end fitness equipment is reportedly gaining popularity.
While recovery in the sector could be slow, COVID-19 is bound to leave a mark on luxury retail through increase in online shopping and quicker adoption of tech trends such as personalized recommendations/smart trial rooms. Customer focus is likely to be on products’ value add and on owning fewer but better products. Given the basic buyer propensity in Kuwait to high-value goods, luxury retail would continue to thrive.
Know about the sector – retail infrastructure, formats, segments, key players - and a lot more in our report on Kuwait Luxury Retail.
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