Micro and Macro Economics of Fashion in UAE
The fashion industry has turned into a globalized sector since its inception in France, Paris. In the fashion industry, the key objective is to produce and market apparel, which is distinguished into five different categories. The categories of apparel in the fashion industry include luxury wear and mainstream clothing among others. These categories go through different groups of people who handle the production, marketing, advertising and distribution of the clothing items. Presently, the Middle East, particularly Dubai in the UAE has turned into a fashion hub. Most of the fashion apparels are directed towards the region due to various factors. Some of the factors include the high demand for fashion items associated with the regions and the availability of high amounts of disposable cash. One of the reasons that have been cited for the growth in the fashion industry in the UAE is the government support.
The UAE government supports the fashion sector through organization of various fashion events (Gilman, 2011). Large events such as the DSS fashion week for kids increase the rate of growth in the Dubai fashion industry. Moreover, the support of various corporate bodies has also led to the rise in retail spending in the Dubai fashion sector. From hosting 9 fashion events in 2004, the country has grown leading to the ability to host at least 11 corporate fashion events in 2008.
The demand for fashion products in the UAE is also increased by the high social awareness levels among the locals combined with a high percentage of expatriates with disposable cash who visit the country (Ireland, 2012). This has led to the presence of at least 95 percent of premium fashion brands within Dubai. While the extreme weather in Dubai may seem to be a challenge in the fashion industry, it enhances the fashion shopping experience. The weather forces consumers to stay indoors hence become more aware of the fashion brands in the market.
The fashion industry in Dubai comprises of a high percentage of the retail sector. In the last year, it was reported that the retail sector contributed up to 28 percent of the total national revenue of the UAE. This implies that the contribution of the fashion industry to the economy is immense. The fashion industry has also enhanced employment opportunities in the country. With over 200,000 people employed in the industry, the sector employees more people than the oil industry in the country. This is probably due to the high amounts of disposable cash in the country and the distribution of the industry across the country. The industry also attracts many tourists to the country hence increasing the revenue to the country.
Most of the customers in the UAE market are luxury spenders who concentrate on high end products. Because of this, most of the marketers also direct high end products to the local markets. Because of this, Dubai can comfortably compete with other areas such as New York and Paris in terms of the fashion industry. In the fashion trends, the high end market is growing into ready to wear apparel. The sector is predestined to grow to over $1 billion in the year. The sector is continuing to grow with more changes occurring in the mode of business structuring. Initially, the fashion businesses used franchise and partnership models of operation. This is however changing, with the establishment of more homegrown brands. To further enhance the industry, there are plans to set up the Dubai Council for Design and Fashion in the near future (Low 2012).
Gilman, N. (2011). Deviant globalization: black market economy in the 21st century. New York: The Continuum International Publishing Group.
Ireland, R. D., Hoskisson, R. E., & Hitt, M. A. (2012). Understanding business strategy: concepts plus (3E [i.e. 3rd ed.). Mason, OH.: South-Western Cengage Learning.
Low, L. (2012). Abu Dhabi’s vision 2030: an ongoing journey of economic development. Singapore: World Scientific.
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