What UAE retailers can learn from China’s evolving luxury market
In both China and the UAE, watches and jewelry are highly favored as investment purchases, reveals Silvia Coleman, vice president of Thought Leadership at CXG.
The UAE has firmly established itself as one of the world’s most dynamic retail destinations, drawing strength from its multicultural demographic, ambitious mall developments, and appetite for luxury. Yet, as competition intensifies and consumer behavior shifts, retail leaders are increasingly asking: how can the UAE take lessons from the world’s largest retail powerhouse—China—to remain agile and future-proof?
Silvia Coleman, vice president of Thought Leadership at CXG, believes there are valuable parallels. Drawing on findings from CXG’s report, Understanding Chinese Luxury Customers’ Sentiment in 2025, she highlights strategies that could help UAE retailers balance short-term pressures with long-term competitiveness.
From volume to value-driven retail
Chinese consumers are becoming more cautious with their spending, driven by economic uncertainty and a focus on long-term security. Coleman notes that UAE retailers need to respond by moving away from volume-driven models.
“The adaptation for UAE brands should consist of shifting from volume-driven to value-driven strategies,” she explains. “One way to do so could include implementing flexible purchasing models, like layaway programs or membership tiers, that respect consumers’ financial prudence while maintaining desirability. Also, demonstrating clear value through storytelling, rather than pushing frequent purchases.”
China’s retail market shows that wellness and lifestyle are increasingly central to purchase decisions. For the UAE, a country already positioning itself as a global wellness tourism hub, this presents an opportunity to evolve retail ecosystems beyond transactional experiences.
“The lesson here for UAE retailers is to create holistic lifestyle ecosystems, beyond simply adding wellness products,” says Coleman. Fashion retailers could partner with fitness experts, while beauty brands might integrate comprehensive wellness consultations, creating spaces where wellness and retail seamlessly intersect.
Managing pricing and consumer trust
With 50 per cent of Chinese luxury consumers deterred from frequent purchases because of price increases, UAE retailers must rethink how value is communicated. Coleman suggests creating “sophisticated pricing narratives, focusing on cost-per-use and investment value” while differentiating product tiers through transparency and cultural storytelling.
This strategy becomes particularly relevant in a price-sensitive but brand-conscious UAE market, where consumers value exclusivity but also want clear justification for premium pricing.
The Chinese market has seen nearly half of luxury buyers turn to dupes. Coleman believes this trend is a warning sign for UAE brands. “The 48 per cent dupe adoption rate requires proactive defense through emotional brand connections that transcend product features,” she notes.
For UAE brands, that means doubling down on brand integrity through authentication programs, exclusive experiences, and curated communities that offer intangible value no imitation can replicate.
Gen Z and the experience economy
Gen Z in China is spending more on experiences than on physical products, a trend Coleman sees resonating in the UAE. With the country’s strong technology infrastructure, she argues, retailers should pivot toward immersive experiences.
“This could entail workshops, masterclasses, and exclusive events,” she says. “The UAE’s tech infrastructure could be leveraged for AR/VR experiences and virtual consultations that make every interaction feel privileged rather than transactional.”
Luxury travel has emerged as one of the fastest-growing consumer categories in China, and Coleman sees strong parallels for the UAE. “Luxury travel presents the strongest opportunity, given the UAE’s position as a global transit hub,” she says.
Retailers can build synergies with hospitality partners, offer lifestyle products that enhance travel, and even create “travel concierge” services that tap into the UAE’s cultural diversity.
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In both China and the UAE, watches and jewelry are highly favored as investment purchases. To meet this demand, Coleman recommends UAE brands focus on craftsmanship education, personalisation, and advisory-led services that reinforce the long-term value of these products.
Perhaps the strongest lesson from China is the speed at which retailers adapt. Coleman notes that Chinese brands thrive on rapid iteration—testing concepts via pop-ups and smaller activations before scaling. UAE brands, she argues, should adopt similar agility through shorter review cycles and more experimentation.
China has shown that different customer groups require different strategies, and Coleman believes the UAE can apply this learning in its multicultural context. “In the UAE’s multicultural context, brands should understand how different communities interact with luxury, creating tailored approaches while maintaining brand coherence,” she says.
The long-term view: building authentic connections
For Coleman, the key takeaway is that UAE retail leaders must focus on relationships rather than transactions. “The critical insight is that most luxury consumers likely plan to resume luxury purchasing when conditions improve, but selectively,” she emphasises.
By investing in customer relationships during challenging periods, UAE retailers will be best placed to capture disproportionate growth during recovery.
“The overarching theme from China’s market is the shift toward strategic, relationship-focused luxury consumption,” she concludes. “UAE brands must recognise that consumers increasingly view luxury purchases as investments in their future selves… Success requires moving beyond traditional retail models to becoming trusted partners in customers’ lifestyle and personal development journeys.”
Written for Gulf Business by
