How has the luxury sector evolved in Kuwait in recent years?
The luxury sector in Kuwait has rapidly evolved over the last decade. Malls are full of all major international brands, and the biggest global department stores such as Harvey Nichols and Bloomingdales have also expanded significantly in the region. In general, the entire region experienced YoY growth until the significant drop in oil prices, which acted as a reality check for countries heavily dependent on oil. At present, wealthy millennials are reshaping the luxury sector in different ways. Today's consumer looks for an experience rather than the product. In addition, high street brands are being mixed with luxury brands. For example, fashion influencers are mixing brands such as Adidas and Zara with YSL and Gucci. In short, I believe the luxury industry worldwide is changing rapidly. Moreover, e-commerce has changed the market, and people are more on the lookout for better deals; consumers have also become more educated. There are many e-commerce companies abroad that are now allowed to ship to Kuwait. This will represent a challenge for the local sellers, and we have already started to feel the impact. The market in Kuwait is shrinking compared to the last few years, but not as much as the rest of the GCC. For example, compared to Dubai, we are not reliant on tourism. Local purchasing power is quite strong, and the country has a solid middle class. The country's formidable relationship with Qatar and Saudi Arabia also presents an advantage. In addition, Kuwait is one of the few remaining countries that have not implemented 5% VAT. That means products sold here remain competitive on a regional scale. Nevertheless, it will be important to adapt and keep in pace with latest developments, such an e-commerce platform. With numerous promotional activities, we can ensure that our e-commerce prices remain close to Europe and the US. The consumer is knowledgeable, and is aware of the alternatives that are available elsewhere. Also, younger consumers' behavior has evolved in a new direction. Companies have to be relatable, maintain quality, and be trendy. Beidoun is still opening malls and big stores, so we still have reason to remain optimistic, but Kuwaitis are definitely becoming more price sensitive.
What are the main factors that you consider before deciding to introduce a new brand in the Kuwaiti market?
First and foremost, it is important to find market gaps. We have definitely become more selective and adopted a more exhaustive market research. In fact, we have intensively used social media in order to conduct our market research; the market is changing at a fast pace. When it comes to perfumes and cosmetics, there are a number of niche brands coming into the market. People want to differentiate themselves; the niche segment is therefore growing significantly. In the cosmetic sector, young US-based brands are taking market share away from the traditional brands.
In what ways is the company reinventing itself to relate to its customers and expand its clientele?
Ours was one of the first e-commerce platforms for cosmetics in the region. In Kuwait, social media influencers and digital marketing have a tremendous impact on consumers, and we are focusing on that medium. When it comes to brick and mortar, we are closing down the traditional concepts and shifting our focus toward our niche and novelties portfolio.
How is the creation and implementation of online stores impacting the company's finances?
In general, the region is at its early stages when it comes to e-commerce, especially when compared to countries such as the US and the UK. When it comes to the luxury e-commerce market in the region, the market is growing. However, it still needs some time to catch up with the rest of the world. The consumer still likes to touch and feel products, so e-commerce has not developed that much when it comes to luxury products in Kuwait. In the next five to seven years, we remain hopeful that it will reach 15-20% of our business.