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People enjoy shopping because it makes them happy/. Some appreciate the creativity shown by different producers even if they do not buy anything. On the other hand, some people enjoy owning luxury and trending items like mobile phones, watches, and other electronic devices.
The prices of goods determine the ability and willingness of customers to buy them. The UAE is amongst the fastest growing economies in the world, and this means that most people focus their attention on the goods and services produced by this region. This discussion examines the pricing of luxury goods in the UAE and explains the nature of their market value.
The UAE is without a doubt a greener pasture in terms of international market opportunities. There is a high demand for goods and services to and from this region. The prices of luxury goods like clothes, shoes, perfumes, cosmetics, and bags in the UAE are beyond the reach of many locals (Walsh 2010).
The cheapest shoe goes for about $25.19, and this means that most people cannot afford to own more than a pair of shoes. The same pair of shoes go for about $8 in the international market. A pair of trendy shoes go for about $129.95 in the international market while the UAE sells it at not less than $200. Therefore, the price of shoes in the UAE is almost double its value in other international markets.
In addition, the prices of perfumes, clothes, bags and beauty accessories are higher in the UAE than other regions. Most locals believe that the government intentionally overprices the prices of goods to depict the region as having a flourishing economy (Bastein 2012). There have been protests as consumers express their anger on the ever increasing prices of basic needs. However, the prices of luxury goods have not caught their attention because they cannot afford them.
The most likely reason the prices of luxury goods in the UAE are high is that this region does not have the raw materials required to produce finished products. Therefore, it imports them from other regions and has to impose import duty and other charges on the raw materials.
The prices of finished products become high in the UAE compared to those of other regions because of the huge costs of production involved in manufacturing them (Irvine 2008). Other regions like America and the United Kingdom have raw materials and thus they do not incur huge production costs. The prices of cars and electronics in the UAE are very high compared to other regions because these products are imported from Japan and other regions.
Secondly, there is an abnormal local and international demand for the goods produced from the UAE. This region has attracted a lot of investors that have increased the demand for basic, secondary and luxury goods. Investors from other regions have invaded the UAE because of the perceived economic growth and investment opportunities (Almezaini 2011).
Therefore, there has been an increase in demand for luxury products yet their supply remains unchanged. People believe that this region produces high-quality goods, and that is why luxury products from the UAE are very expensive.
Thirdly, most consumers in the UAE region spend a lot of money on luxury goods. The per capita spending on luxury goods of consumers in this region was about $1,900 according to a survey conducted by Bain and Company. The survey revealed that more than 10 million new consumers enter the UAE market annually, and it is believed that the number will hit 400 million by 2020. Therefore, the prices of leather bags, shoes, clothes, cars, cosmetics and electronics will continue to increase because of the inevitable influx of new consumers.
The prices of luxury goods in the UAE are higher than in other regions in the world. The high demand for luxury goods, limited resources, perceived market growth, and investment opportunities are the major driving forces that cause the high prices of goods in this region. It is surprising that people continue to flock to the UAE despite the high prices of its products.
References
Almezaini, K. (2011). The UAE and Foreign Policy: Foreign Aid, Identities and Interests (Culture and Civilization in the Middle East). London: Routledge.
Bastein, V. (2012). The Luxury Strategy: Break the Rules of Marketing to Build Luxury Brands. London: Kogan Page.
Irvine, W. (2008). A Guide to the Good Life: The Ancient Art of Stoic Joy. Oxford: Oxford University Press.
Walsh, J. (2010). UAE – Culture Smart! The Essential Guide to Customs and Culture. London: Kuperad.
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