Chalhoub’s outlook on the region's growth and the company's strategy to reach $15 billion by 2027
What: Gulf luxury market achieves 6% growth to $12.8 billion while global markets contract, driven by beauty sector expansion and strategic digital transformation.
Why it is important: The success of the Gulf's luxury ecosystem provides a blueprint for market development, showing how regional retail groups can outperform global trends through strategic adaptation and local market understanding.
The Gulf region's luxury market has demonstrated remarkable resilience, achieving 6% growth to reach $12.8 billion while global markets experienced a 2% decline. This success story is particularly evident in the beauty segment, which saw an impressive 12% growth, with skincare leading at 17% and Asian beauty brands showing exceptional performance with 26% annual growth from 2022 to 2024. Under Michael Chalhoub's leadership, the company is implementing comprehensive digital transformation initiatives while maintaining focus on personalised customer experiences. Saudi Arabia emerges as a key strategic priority, currently representing 18% of the regional luxury market and showing double-digit growth in 2024. The company's commitment to local engagement is reflected in their support of homegrown Saudi brands and their workforce development, with women comprising 70% of their 5,000 Saudi employees. Their digital transformation strategy, including AI implementation and enhanced logistics capabilities, aims to address the region's 13% e-commerce penetration while maintaining high-touch customer service. Tourism dynamics continue to evolve, with Russian tourists leading luxury spending in the UAE and regional consumers increasingly preferring local shopping destinations.
IADS Notes: The Gulf region's impressive 6% luxury sales growth to $12.8 billion reflects a series of strategic transformations in the market. In November 2024, Chalhoub Group's implementation of comprehensive digital solutions laid the groundwork for enhanced operational efficiency, while their successful skincare summit in October 2024 demonstrated deep understanding of regional beauty trends. This digital and experiential focus was further reinforced in April 2025 when Mall of Emirates unveiled its $1.36 billion transformation plan , emphasising the region's commitment to innovative retail experiences. The January 2025 leadership transition to Michael Chalhoub has accelerated these initiatives, particularly in Saudi Arabia's evolving luxury landscape. These developments align with global trends showing digital channels' growing importance, as evidenced by social commerce now driving 68% of beauty sales , validating the region's strategic focus on digital transformation while maintaining traditional retail excellence.
