ROME — Burberry opening in Moscow and Saks Fifth Avenue entering the Middle East are just the beginning.
Despite the recent buzz surrounding China, the Asian giant isn’t the only emerging market out there. Executives at luxury goods organization Altagamma’s conference here last week stressed that Russia and the Middle East boast incredible opportunities for growth. But European luxury goods makers and the retailers that carry them were quick to point out that it would take more than just pushing products. They underscored the importance of reaching out to local tastes and of promoting Italian flair for style and good living, whether that means selling Missoni caftans or serving up espresso at an in-store cafe in Red Square.
“There are a lot people who have new money and who want exclusive products,” said Valentino chief executive officer Michele Norsa. “I think all of these markets will have double-digit growth.”
The Russian market for luxury clothes, accessories, jewelry and beauty products was 4.55 billion euros, or $5.5 billion, in 2003, according to figures from Altagamma. The Middle East market for those same items in 2003 was 8.45 billion euros, or $10.23 billion.
But winning over new customers requires careful study of these politically and economically diverse areas and, perhaps most of all, breaking through stereotypes and negative imagery.
“Everyone knows the Middle East from these people,” said Sheikh Majed Al Sabah, owner of Kuwait’s Villa Moda, as he projected photos of Osama bin Laden and Saddam Hussein on a screen. He and other retailers from the region explained that the Middle East is a complex, thriving market that requires specialized knowledge of each country and its cultural mores. Some countries haven’t even been penetrated. “Oman is not tapped at all. There’s not one luxury store there,” Al Sabah said.
Abdullah Saeed Binzagr, president and ceo of Saudi Arabian retailer Al Rubaiyat, began selling labels like Giorgio Armani, Ermenegildo Zegna and Gianfranco Ferré in the Eighties. He said he’s watched tastes evolve from the classic, conservative days when “people would go to the beach in a suit” to today’s market, when younger consumers are embracing trendier brands like Dolce & Gabbana and Prada.
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