Luxury Vertical Insights: UAE

Google Confidential and Proprietary Google Confidential and Proprietary

United Arab EmiratesLuxury InsightsJuly 2014


AgendaLet’s talk about Export

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Demographic Profile

Consumer Behavior

Vertical Consumer Insights

Competitor Benchmarks

Investment Estimate

Conclusion


Demographic Profile


Why target the United Arab Emirates?

Sources: Google Internal. Disclaimer: These cultural insights should be considered only as opinions of the AdWords Sales team based on individual experience of local user behaviour. These do not necessarily reflect the opinion of Google and are not intended as guarantees or predictions of performance based on application of these insights.

CTRs are among the highest in the region, CPCs are much lower

than European markets, investments are then

lower

The Luxury market has been witnessing

increasingly growing query growth

Huge Internet Penetration High CTR

69% of internet user penetration, 74% of mobile penetration, both of which

are the highest in the region

High Query Growth


Audience: United Arab EmiratesInternet audience of about 6,7 million users, of which 23% purchase online

4.7million

Population

Mobile Internet Users

74%of population

46%of survey

respondents

Online Buyers

Sources: CIA The World FactBook, April 2014; eMarketer, The Global Media Intelligence Report: Western Europe, 2013; globalwebindex, GWI Commerce Summary, March 2014

69%of population

Internet Penetration

$2.9billion

B2C e-Commerce Sales

Google Confidential and Proprietary Sources: Euromonitor, 2014

Consumer Insights and Luxury Clothing in the UAE

● Special editions, tailored products and customer-accustomed goods are increasingly on demand

● High social status is often expressed through luxury products with large, shiny logos and recognisable absolute luxury brands dominate.

● These brands continue to harness increased benefits from the high number of up-to-date, well-oriented tourists from China and Russia.

● Extreme fashion awareness and a high appreciation of recognisable luxury, the famous, traditional European brands such as Louis Vuitton, Gucci and Burberry remain the country’s favourites.

● New fashion players from North America, such as Michael Kors, are increasingly successful among eager fashionistas.

● Low-end luxury products, on the other hand, struggle to keep up with large players, as the targeted middle-class faced rising life expenses in 2013.


Consumer Behavior


Preferred Payment Methods

Source: Paypal e-commerce report, September 2013

Credit and Debit Cards are the preferred payment method, although Cash on delivery, which has a strong share as well and is quite common in Arab countries. PayPal or similar payment services are becoming more and more popular.

Payment on Delivery

32%

PayPal30%Credit/

Debit Cards38%


UAE Luxury Market Insights

Disclaimer: These cultural insights should be considered only as opinions of the AdWords Sales team based on individual experience of local user behavior. These do not necessarily reflect the opinion of Google and are not intended as guarantees or predictions of performance based on application of these insights.

Take into consideration the following key aspects of luxury consumers purchasing behavior:

- The experience surrounding the purchase of an expensive item is key for luxury purchasers. What separates the luxury buying experience from the mass experience is the personal approach.

- The exclusivity a brand offers a customer - whether it’s limited-edition merchandise, a first look at a product or personalized service - is a key element of the luxury experience.

- The US affluent consumers spend a lot of time online and they use online resources to gain time. Research before purchasing is very important for them, especially in the case of luxury items. In 2013, the US affluents spent an average 41.6h per week online

The UAE Luxury Market

The Ledbury Research Consultancy claims that the number of luxury stores in the UAE increased by almost 50 percent. Therefore luxury brands are realizing that expansion to the Middle East would be profitable as consumers have high purchasing power and are attracted to high quality and elite brands

The Dubai Luxury Market

Dubai commands around 20% of Middle East luxury market and around 60% of the UAE’s luxury market. The Dubai Mall, accounts for 50% of Dubai’s luxury purchases.

Most promising cities for luxury consumption

While Dubai will remain the retail heart of the UAE, the drivers of growth are now shifting towards Abu Dhabi, Saudi Arabia, Qatar, and Kuwait’. says Patrick Chalhoub, CEO of Chalhoub group. Biggest luxury retailer in the GCC.


Vertical ConsumerInsights


Watches & Jewellery Query Trends

Q1 2014 Indexed Queries CPC Ad CTR Depth

Computers and Tablets

100 $0.36 3.02% 3.79

Mobile 135.3 $0.25 3.27% 3.59

YoY Q1 2014 Queries CPC Ad CTR Depth


-31.16% 35.64% 55.86% -238.06%

Mobile 47.03% 254.97% 6.60% -30.09%

Q1 Q2 Q3 Q4

Queries 25.7% 25.3% 24.3% 24.8%

Clicks 25.5% 25.8% 26.8% 21.8%

The growth of mobile queries continues. The number of queries is quite stable throughout the year.

Average quarterly query

Sources: Google Internal


Fashion & Apparel Query Trends



100 $0.23 2.06% 5.11

Mobile 114.2 $0.16 2.00% 3.64



-56.7% 37.5% -11.2% -171.1%

Mobile 14.1% 218.1% -9.7% -32.3%

Q1 Q2 Q3 Q4

Queries 22% 32% 25% 21%

Clicks 20% 36% 21% 23%



The growth of mobile queries continues slowly. Computers & Tablets queries are decreasing, indicating that this category has more potential for mobile.


Beauty & Perfumes Query Trends



100 $0.49 2.42% 4.16

Mobile 145.7 $0.32 2.08% 3.56



-22.3% 13.7% -5.4% -72.2%

Mobile 76.4% 77.9% -3.7% -16.1%

Q1 Q2 Q3 Q4

Queries 26% 26% 24% 24%

Clicks 21% 27% 25% 27%



This category presents the biggest peak in mobile queries growth. Therefore, mobile shows a lot of opportunity to increase reach and ROI. The number of queries is quite stable throughout the year.


Competitor Benchmarks(Non Branded Luxury KWs)

Google Confidential and Proprietary Google Confidential and Proprietary Sources: Google Internal Research, Apr 2013 - Mar 2014

BenchmarkImpressions

Clicks

CTR

Cost USD

CPC USD

Avg Imp Position

Top Competitors Top CompetitorsMonobrand

Avg Click Position

Monobrand

This benchmark analysis is a performance summary for the Top 5 Monobrand Players & Category Leaders in April 2013 - March 2014

Competitor Benchmarks (UAE)Watches & Jewellery

Desktop and Tablet Mobile

291K 655K 150K 264K

13K 45K 6K 19K

4% 7% 4% 7%

$15K $21K $4.3K $7.5K

$1.49 $0.64 $1.00 $0.50

1.2 1.3 1.2 1.1

1.9 2.0 1.7 1.5

Google Confidential and Proprietary Google Confidential and Proprietary Sources: Google Internal Research, Apr 2013 - Mar 2014


Clicks

CTR

Cost USD

CPC USD

Avg Imp Position


Avg Click Position

Monobrand75K 227K 18K 98K

5K 20K 312 8k

7% 9% 2% 8%

$2.5K $10 $461 $3K

$1.04 $0.53 $1.70 $0.36

1.3 1.3 1.2 1.2

2.0 1.7 1.5 1.4


Competitor Benchmarks (UAE)Fashion & Apparel




Sources: Google Internal Research, Apr 2013 - Mar 2014


Clicks

CTR

Cost USD

CPC USD

Avg Imp Position



Avg Click Position

Monobrand84K 393K 80K 307K

3.5K 20K 2.2K 15.3K

4% 5% 3% 5%

$8K $12K $3K $6K

$2.42 $1.55 $1.47 $0.71

1.3 1.4 1.2 1.2

1.9 2.0 1.6 1.5

Competitor Benchmarks (UAE)Beauty & Perfumes


InvestmentEstimates(Non Branded Luxury KWs)


Watches & Jewellery Search Estimates (900+ generic keywords)

Maximum Market Potential Estimate for United Arab Emirates

Sources: Google Traffic Estimator - Estimates based on a sample of Google data from 01/07/14 to 30/06/15 for search. Future results may differ.

Daily Clicks Daily Impressions

Avg. Position Estimated Cost/Day

CTR Avg. CPC

328 8K 1.71 $106 4.1% $0.32

$39KEstimated Yearly

Budget

rings

watches

diamonds


Apparel & Fashion Search Estimates (400+ generic keywords)



handbags

shoesdresses



CTR Avg. CPC

410 16K 1.83 $124 2.6% $0.30


Budget


Beauty & Perfumes Search Estimates (900+ generic keywords)



mascara

parfumemake-up



CTR Avg. CPC

279 8K 1.56 $92 3.4% $0.33


Budget


Conclusions

Google Confidential and Proprietary

ConclusionMajor considerations and key action items

These cultural insights should be considered only as opinions of the AdWords Sales team based on individual experience of local user behaviour. These do not necessarily reflect the opinion of Google and are not intended as guarantees or predictions of performance based on application of these insights.

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● Advantage: Biggest Luxury Market in MENALuxury stores have been increasing significantly in the UAE. Dubai commands around 20% of Middle East luxury market and around 60% of the UAE’s luxury market.

● Challenge: Adapt to the local and international userAs the UAE is a business hub for Middle East and North African markets, the number of expatriates in the country in quite high (80%) Campaigns should be created in English and in Arabic to cater to the international users.

● Opportunity: Aware and Engaged Consumers who have money to spendLuxury is a sign of social status, consumers are aware of the brand and actively seek the newest fashion trends and stay up-to-date.

● Future: VIP treatmentLuxury retailers can win UAE customers by replicating the in-store experience, including the VIP treatment to which they are accustomed. Online brands must offer free or discounted shipping, an easy return process, superior customer service, exclusive content such as loyalty programs, early access to sales, sneak peeks of new products or services, and VIP privileges.

Date post:	26-Jan-2017
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Luxury Vertical Insights: UAE

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