Impact of COVID-19 on Luxury Good Prices in UAE

Impact of the COVID19 on
luxury good prices in UAE

TABLE OF CONTENT
INTRODUCTION ..........................................................................................................................3
Impact of the COVID19 on luxury good prices in UAE............................................................3
REFERENCES..............................................................................................................................13

INTRODUCTION
Due to Covid-19, the world is facing the biggest challenges in terms of business,
economic growth, performance. The economic growth has been slowed down just because of
covid-19 pandemic. Due to shut down of different productions channels, people have faced a lot
of loss. The present report will be based on impact of covid-19 on luxury good prices in UAE.
United Arab emirates is famous country in the world, the economy of UAE is heavily reliant on
revenues from natural gas and petroleum. But during the time of pandemic, UAE also faced
some challenges.
Impact of the COVID19 on luxury good prices in UAE
The luxury market size of UAE reached US$ 3.5 billion in the year 2021 which is quite
good figure. It is expected to reach 5.2 billion by the year 2027, keeping in mind about the
uncertainties of covid-19 pandemic IMARC group is tracking the direct as well as the indirect
impact of the pandemic on UAE economy. As already discussed, the covid-19 has spread with
alarming speed in the year 2019-2020, it has infected many people and bringing economy
activity down. Country like UAE has also faced challenges during pandemic time while doing
international trade, global level production, foreign direct investment and employment (Pang and
et.al., 2021). This pandemic caused significant business disruptions around the world, with
luxurious tourism, hospitality sector and travel being particularly impacted. From small scale
industry to large size industry, covid-19 has impacted all of them. Including, it has also impacted
basic needs of people and basic product price to luxury good price. In economics, necessity
goods are those goods which is a normal type of good such as water, food, clothes and utilities.
Product or services that people will buy regardless of the changes in their income levels is known
as necessity goods. While on the other side, upmarket goods is known as luxury products, refer
to those goods or services which are costlier and quality. luxury goods are opposite of necessity
goods, which are the goods that customers buy regardless of their income level such as jewellery,
high end watches, luggage, branded clothes, home and estates, big properties, wine, expensive
cars, expensive mobile phones and laptops. This type of goods are often bought by people that
have a higher disposable income. This type of luxury goods are highly depended on promotions
and marketing in order to communicate brand values. As of now, UAE represents one of the
most attractive luxurious market amongst the middle eastern countries. The wealthy residents of
UAE spend billions to purchase high end products likes designer clothes, cars, shoes, jewellery,

mobile phone. Not only this, the booming travel and tourism , hospitality industry has helped the
country to become of the largest and well maintained shopping destination in the middle eastern
region.
Every company's in the UAE first priority is to protect the health and safety of
consumers, business partners, employees and other stakeholders. Indeed, luxury companies in
UAE have pivoted to address urgent needs for people who are facing issues for example-
companies or industries that were producing high end products such as perfumes, jewelry,
scarves is now manufacturing hand sanitizer, face masks. Which has somehow impacted their
profitability and performance in the market of UAE. Not only this, luxury companies also have
made monetary donations to hospital where people were facing major issues related to health. In
addition, to ensure the survival of the businesses in UAE, owners of company has provided
support to millions of people relying on the luxury goods' industry, from factory workers to retail
store employee everyone has faced challenges in terms of money and standard of living. During
the time of pandemic, people were also facing some social issues such as feeling helpless,
depression and reduction in work output, the reason behind that is of-course loss due to covid-19.
Government regulations
The constantly changing government regulations on imports and exports, trade policies,
tariffs and interest rate. The luxurious industries have to follow all the rules made by UAE
government. It includes the closing of borders, enforcing social distancing, health and safety
terms, new hygiene practices like wear masks and hand sanitizers.
As luxury products and services are the highly desirable one whose value in terms of
price and quality is comparatively high. The luxury goods market in the UAE is segmented on
the basis of type and distribution channel (Kim and et.al., 2021).
There are some key issues related to particular report which includes:
 Impact of COVID-19 on the UAE economy as a whole and across sectors.
 Impact of pandemic on the luxury good prices in UAE
 Necessary recovery measures to meet the requirements and needs of the UAE industry
Talking about the luxury goods categories, no luxury goods like luxury food items,
leather goods, footwear is likely to benefit from the pandemic crisis. At the time of covid-19
crisis, people were avoiding buying personal luxury goods which includes jewellery, luxury
make-up products. They feel that this is not the right time to buy and wear luxury items. So, the