Christophe Caïs Decodes the New Face of Luxury in the Middle East
Originally Published in Business Times
Between authenticity, proximity, and personalization, the global luxury market is evolving in response to changing consumer expectations. Despite geopolitical tensions, the Middle East is emerging as an essential region for Western brands and a springboard for local players. An expert in luxury and brand strategy, Christophe Caïs analyzes these transformations. A Harvard graduate, he began his career in auditing in New York before moving to China in the 2000s. Faced with the influx of companies seeking to establish themselves there, he founded the strategic consulting firm CXG in 2006, which now supports major luxury brands across 85 countries. Based in Dubai, Christophe Caïs shares his perspective on the strategies needed to navigate a market undergoing profound change.
How are geopolitical tensions in the Middle East concretely impacting the luxury market?
Christophe Caïs: “We tend to view the region as a single entity, but there are significant differences between cities. In the United Arab Emirates, the two main cities, Dubai and Abu Dhabi, are affected differently by the conflict.
Dubai is heavily dependent on tourism, with an airport welcoming approximately 20 million visitors annually, excluding transit passengers. This customer base has declined for the time being. Within the city, there are also differences between shopping malls. The iconic Dubai Mall is the world’s leading tourist destination, making it highly dependent on tourism. The impact is direct for major brands operating their flagship boutiques there. Conversely, more regional malls tend to maintain their activity thanks to local customers.
For major luxury brands, the region accounts for between 3% and 5% of revenue. It is an important market, but not a vital one. The main challenge is managing uncertainty. People plan their holidays in advance, and in the absence of stability, they decide to go elsewhere. I believe Dubai will continue to experience a shortfall in tourist arrivals until at least the first quarter of 2027.
For expatriates and tourists alike, the situation is the same. We no longer feel as though we are living in an isolated bubble, but that does not mean activity has come to a complete halt.
Regarding supply chains, maritime traffic is directly affected by the closure of the Strait of Hormuz. This primarily concerns the region’s major ports, such as Jebel Ali and, to a lesser extent, Fujairah, which the Emirates are developing as an alternative to the former. This mainly affects heavy goods, such as sand needed for construction. Air transport remains essential for Dubai, but passenger and cargo flights are still operating.”
How is the luxury market responding to this regional crisis?
Christophe Caïs: “This crisis comes at a time when the luxury market was already experiencing a series of slowdowns to which major brands are struggling to adapt quickly. Luxury experienced an exuberant post-Covid period, with a highly dynamic market and substantial price increases. This momentum has come to an abrupt halt with the conflict, but the slowdown is also linked to those price increases. Customers’ purchasing decisions have evolved.
The customer segment known as Very Important Clients (VICs) focuses on exceptional pieces. They account for approximately 3% to 5% of luxury customers but represent, on average, 40% of purchases. Meanwhile, aspirational customers are those who spend significantly, but not enough to qualify as VICs. They are often younger consumers who can afford entry-level luxury products. When prices rise alongside inflation, these aspirational customers can no longer necessarily afford those products and begin questioning their spending.”
Why does this market remain strategic and attractive to international brands?
Christophe Caïs: “The Middle East is our fifth-largest market. The region has always sought to position itself as a premium destination, and that ambition has not changed. When the bombardments began in Dubai, we received numerous alerts on our phones, but people gradually became accustomed to them. The role of brands is to give customers a compelling enough reason to visit and accept that potential risk. Governments, particularly Dubai’s, are planning major communication efforts in the coming months. In France, for example, we can already see Emirates airline advertisements aimed at reassuring tourists about the destination. The main challenge will therefore be to restore confidence and maintain the destination’s attractiveness.”
“Luxury must restore meaning and offer inspiring experiences to its customers.”
— Christophe Caïs
A crisis can accelerate innovation in luxury. What opportunities and concrete levers for action emerge during times of crisis?
Christophe Caïs: “I lived in China for ten years, and there, the word crisis tells a different story from how we understand it in the West.
In Chinese, the word for crisis, weiji, combines two characters: wei, danger, and ji, opportunity. I therefore like to view crises as anxiety-inducing moments that allow organizations and team capabilities to evolve. Covid is a good example. It accelerated brands’ digital transformation at a time when some projects had been progressing with difficulty for three years. Within a few months, companies mobilized to reconnect with their customers. That experience enabled them to develop the reflexes needed to respond quickly and effectively to crises. This period should also prompt the luxury sector to rethink its growth model. The growth engine driven by price increases has now stalled. Brands must restore meaning, create experiences, and return to the fundamentals of quality. This requires a genuine paradigm shift: moving away from a model focused on ever-faster growth toward intentional growth, aligned with production capabilities, team training, and the ability to maintain quality.”
“Thanks to Covid, companies have developed a greater and more effective capacity to respond to crises.” — Christophe Caïs
In an increasingly competitive market, what role can international brands play alongside regional players?
Christophe Caïs: “Most major brands are already present in the market, and their positions are firmly established.
It is important to understand that this is a complex and highly competitive retail landscape, particularly dependent on shopping malls. For a long time, foreign companies could not distribute directly in Dubai and were required to partner with a local company. Today, major brands can enter the market directly, but this remains very complicated for smaller brands.
When a new brand wants to develop a retail network, it should partner with a local distributor such as Chalhoub, Al Tayer, or Seddiqi. These groups have the relationships and market knowledge needed to negotiate retail locations and identify the best opportunities.
It is no longer mandatory, but it is strongly recommended: having the right network remains the foundation of success.
At the same time, some outstanding brands are emerging regionally. Huda Beauty, founded in Dubai in 2013, is an incredible success story. Amouage, a more niche brand founded in Oman in 1983, offers a local alternative to major groups such as L’Oréal.
These brands rapidly establish regional awareness and credibility before accelerating their international expansion.
This trend, which has been visible for approximately a decade, is expected to strengthen. Today, these brands have the capabilities to become major international players, if they have not already achieved that status.”
How do brands build loyalty among local customers?
Christophe Caïs: “During Covid, brands had already shifted their attention toward their local customer base.
We are now seeing a continued effort to cultivate those relationships, particularly because local customers are influential, connected, and passionate about luxury. During periods of strong growth, brands tend to rely on tourist customers and neglect their local clientele. When tourist traffic suddenly stops, they find themselves unprepared. In reality, we are witnessing a process of catching up and rebalancing.
Saudi Arabia, Qatar, and even Kuwait are less dependent on tourism and have managed to maintain their business activity.
We are seeing a sense of pride among local customers who, during difficult times, prefer to stay and shop locally rather than travel to London or Paris for their luxury purchases. In practice, brands must offer products adapted to local tastes.
For example, Berluti developed a range of men’s sandals in Dubai that has been very successful.
Brands must also adapt their in-store teams. Approaches and cultural codes differ between local customers and tourists. Teams therefore need training to avoid cultural missteps and to integrate local identity into the brand over the long term.”
“Having the right network remains the foundation of success.”
— Christophe Caïs
What role does the customer relationship play?
Christophe Caïs: “It is crucial to put human interaction back at the heart of the customer relationship. The interaction with the sales associate is the touchpoint that either fulfills or fails to deliver on the brand promise.
It represents the culmination of promotional and branding campaigns across the media. For example, the ‘invisible customer’ effect, when you enter a boutique and no one approaches you for five minutes, is particularly damaging.
At a time when in-store traffic is declining, brands must be capable of offering an inspiring and memorable experience to those who make the effort to visit a boutique. A positive experience can create an emotional connection with a brand and contribute to customer loyalty and positive word of mouth. I always say: ‘What matters is not what you say to customers, but what customers say about you when you’re not there.’ A satisfied customer becomes an ambassador who shares that experience with friends and family. Conversely, a customer becomes a detractor if their experience is poor. This effect is naturally amplified by social media.
Brands must prioritize a return to their roots, with an absolute focus on the product. Quality requires precise traceability and responsible manufacturing, alongside a measured pricing strategy. The priority is customer lifetime value: building lasting loyalty to the brand. This includes after-sales service, which is often mistakenly viewed as a cost center when it is actually a crucial moment in the customer relationship. This service offers an opportunity to build loyalty and strengthen long-term customer relationships.”
“Brands must return to their roots, with an absolute focus on the product.”
— Christophe Caïs
