Qatar's new dawn

Whether it is fashion or sporting events, the spotlight is on Qatar. Indeed, it will be in that area of just 11,500 square kilometers of arid desert, dunes and long beaches overlooking the Persian Gulf that some of the most anticipated global events will be staged in the coming weeks and months. In the shadow of the futuristic skyscrapers of the capital Doha, opening the dances at Qatar Creates will be the fourth edition of the Fashion Trust Arabia Awards, scheduled for next week to declare the winners of the most important award in the Arab world for emerging fashion designers. On Friday, on the other hand, the Forever Valentino exhibition will open in the design and innovation hub M7 Cultural Forum.

In December, football will become the protagonist with the FIFA 2022 World Cup. Again, however, the fashion system will make its foray into Stadium 974 between the semifinals and the final with the maxi event Qatar Fashion United, organized by French fashion editor Carine Roitfeld together with Sheikha Al-Mayassa bint Hamad bin Khalifa Al Thani, daughter of the former Emir of Qatar and co-chairperson of the Fashion Trust Arabia, to bring the creations of more than a hundred fashion houses from five continents to the runway. Next year, Doha will also be the setting for the traditional Geneva International Motor Show (GIMS), which skipped the 2022 edition and will move to Qatar to take place at the Exhibition and Convention Center from October 5 to October 14, 2023.

Doha is thus the new Dubai, or at least, it has the makings of one. Because while these major upcoming events undoubtedly represent important moments in the nation's development, both from an infrastructural and luxury consumption perspective, historically the country has never been a tourist destination. Events of this caliber, however, can be the beginning of a development path. «In order for Doha to become the new Dubai, it will be important to have a vision that goes beyond the FIFA 2022 World Cup, creating both a stable flow of tourists and opportunities for local residents to buy locally, thus changing the habits of Qataris who are used to buying luxury goods mainly abroad», Erika Andreetta, Partner and EMEA Luxury&Fashion Leader at PwC Italia, explained to MFF. «The potential to become the new Dubai is there, but the infrastructure work started with the World Cup will have to continue over time and will need to be supported by a clear vision for the next ten to twenty years, also including areas such as golf, tennis, conferences or other major international events on a regular basis». A first step was the debut during the 2021 Formula 1 season of the Qatar Grand Prix, which also took place last March at the Lusail Circuit and is likely to become a regular event of international appeal.

The potential of this effectively untapped market looks particularly inviting for Western brands, especially high-end ones. «The value of Qatar's luxury market stood at around 800 million euros in 2021 and managed to register a growth of around 9-10% CAGR in the period 2019-2021e», Claudia D'Arpizio, Senior Partner and Global Head Fashion & Luxury at Bain & Company, told MFF. «The sector has proven to be quite resilient, managing to withstand during the pandemic crisis and recovering afterwards mainly thanks to local purchases, which were the core part of the market even before the impact of Covid-19». And despite a slowdown during summer, mainly caused by new travels from Middle East to Europe, the perspectives remain positive, with the consulting company forecasting a further surge in luxury sales in the country, also thanks to the boost from the upcoming World Cup.

A forecast in line with PwC’s estimates, which see the Qatar luxury market reach about 1 billion dollars in 2022 (1.01 billion euros at yesterday’s exchange rate), with a growth rate of 4.8% year-on-year between 2022 and 2027. Fashion is generally worth 35% of the market, about 370 million dollars (377.3 million euros), and about 19% of luxury sales is generated by e-commerce. Qatar consumers are considered the best buyers for luxury goods in the entire Middle East, according to Erika Andreetta, but they often buy in Dubai, the US or Europe. «This is due both to the lack of development of luxury retail in Qatar and cultural factors that lead local consumers to buy abroad, which in their eyes represent true luxury with huge social status implications as in every country that has recently reached luxury», the expert stated. «Over these past years, we have seen the creation of new important retail establishments, such as the recent Place Vendôme opened in May (also the Printemps department store, which was bought by Qatari investors in 2013, inaugurated a store in Doha last month, ed.) and the creation of local luxury brands aimed at the wealthy customer base, for example Qela, which incorporate values and products linked to local culture and taste».

To access the Qatari market, Western brands will have to be actively and continuously present in the country, investing to create monobrand stores and not simply distributing the products to wholesalers. In this way they will be able to compete with both local and international competitors such as Paris, New York and Milan. «Qatari top clients will probably continue their spending abroad, but the presence of luxury stores may generate a new local customer base made up of consumers who travel less and want to emulate top buyers by buying the same designer brands», Andreetta stated.

And behind this Qatari redemption, which over the last 20 years under the reign of former Emir Hamad bin Khalifa Al Thani has become one of the richest countries in the world, stands out the name of the second of the ruler’s three wives, Sheikha Moza bint Nasser Al-Missned. Honorary President of the Fashion Trust Arabia, known for her natural elegance and sharp business sense, she is said to have been the one who managed the capitals derived from the discovery, in recent years, of the several natural gas deposits in the country. Billions of dollars that have been wisely invested in companies and banks across the entire West, from Barclays to London Stock Exchange, from Volkswagen to Paris Saint-Germain. But also in fashion and luxury, where the royal family bought big names such as Harrods, Milan’s Hotel Gallia and, most importantly, Valentino, Balmain and the Forall Group, which produces Pal Zileri, through the Mayhoola for Investments fund.

In addition, last year, Mayhoola’s CEO Rachid Mohamed Rachid acquired Khrisjoy through his Switzerland-based company Alsara Investment Group and launched the Bidayat platform to financially support the most promising start-ups in the MENA area. Qatar’s money never seems to run out, although for the past few years the initial enthusiasm which brought the royal family to shop among top Western fashion brands would seem to have faded away. «What we notice in general is that many funds, of all kinds, after an initial surge in buying luxury brands over these past years, also due to the pandemic, have focused on growth and optimization of investments», Erika Andreetta concluded. (all rights reserved)