Libya and Iraq could be set to join China and Brazil as global hot spots for the luxury goods industry.
These new markets in the Middle East and Africa will be important growth countries in the next few years for luxury goods brands, according to research to be revealed at the luxury industry’s Walpole 2013 Summit on Eastern growth tomorrow.
Dr Florence Eid, chief economist at economic research group Arabia Monitor, predicted that Libya, Algeria and Iraq are markets to watch and said: “We are observing new consumers from Arabic and African countries. The phenomenon of rising oil prices and a liberalisation as the markets are opening up means we are seeing new savers and spenders.”
Countries including Nigeria, Algeria, Libya, Mozambique and Iraq will be on the list of the mega brands looking for further growth she suggested.
Dr Eid, in her report entitled “Riding Out The Global Slowdown: Resilient purchasing power in Middle East and North Africa”, forecasted that luxury brands concerned about a slowdown in growth in China will now look to the growing middle classes in Arabic and African countries.
She added: “Previously, proceeds from exports would have gone straight in to Swiss bank accounts but now wealth is being reinvested in the region and is being distributed – creating a new middle class.
“A silver lining, following the violence of the Arab Spring, is that people now have higher expectations than before. We will have a huge growth in the middle classes.”
Algeria, Iraq and Libya’s combined GDP has been estimated to grow to a total of $732bn by 2018.