How to spend it, UAE style

Consumer spending in the UAE reached Dh671.6 billion last year, according to a Dubai Chamber study.

For those of us lucky enough to be living in the UAE, we know the real perks of being here, besides the usual sun, sand and shopping experience. It is one of the safest places to live in, is among the best connected in the world, and - the biggest perk of them all - it offers a cosmopolitan lifestyle and an unparalleled quality of life thanks to high per capita income.
These are among the primary reasons why expats who might have initially decided to spend a couple of years here in the UAE end up living here for decades on end. A new report from Euromonitor, released by the Dubai Chamber of Commerce and Industry, elaborates on the several factors that compel residents to stay longer in the UAE.
Interestingly, the report also highlights that gone are the days when expats used to live a frugal life in the emirates, remitting back home a bulk of what they earned here. Today's expats believe more in the 'if you've got it, flaunt it' way of life, with UAE expats leading the region in household expenditure, spending Dh378,319 ($103,000) in 2016, the highest in the GCC.

And what do we spend on? UAE residents 'live' the high life, spending Dh275 billion ($75b) annually on housing. We have a 'good taste' for finer things in life, spending Dh91b ($24.8b) on food and beverages. And we believe in 'going places', incurring Dh61b ($16.7b) every year on transportation-related costs.
As Hamad Buamim, President and CEO of Dubai Chamber, puts it: "The UAE's consumer market is largely being driven by a fast-growing population with relatively high incomes, which are key economic fundamentals that support a robust long-term outlook for spending growth in the country."
"As we look across the global landscape of major cities that are redefining standards of quality lifestyle, one city in particular is capturing the hearts and minds of some of the world's most entrepreneurial, sophisticated and ambitious people - and that, by any measure, is Dubai.
"Dubai's strong investment fundamentals are supported by its superior quality of life, visionary political leadership, attractive real estate investment climate, corruption-free environment, geographic access to must-see destinations, multi-lingual environment and its growing position as a regional hub for tourism, logistics and financial services," he added.
"As we look ahead," Menon elaborates, "Dubai remains one of the safest locations in the world, with excellent connectivity, strong economic prospects, a no-tax regime and a stable political system. These factors, coupled with top-notch quality infrastructure, ensure that Dubai surpasses most, if not all other cosmopolitan and financial centres of the world. The city also offers exceptional lifestyle offerings, making it a magnet for international tourists and residents. Given this backdrop, Dubai will continue to provide exceptional opportunities for potential real estate investors who wish to participate in the city's continued growth and prosperity."
The Dubai Chamber study claimed the consumer spending in the UAE reached $183 billion (Dh671.6 billion) last year and is projected to grow at 7.5 per cent compound annual growth rate over the next five years to cross $261 billion (Dh 957.87 billion) by 2021.
The study results showed that UAE consumer spending accounted on average for about 45 per cent of the GDP, compared to a 39 per cent average for the GCC, 45 per cent for Asia, 56 per cent for the EU and 68 per cent for the US.
Laurent A. Voivenel, senior vice-president, operations and development for the Middle East, Africa and India, Swiss-Belhotel International, says the UAE is witnessing a significant boost in domestic tourism. The UAE has recently added a lot of new entertainment and tourism hubs.
"No other single destination in the region is as attractive or diverse in its offering as the UAE. More and more people are opting for staycations as it saves both money and time. Moreover, it's not just about where you go on vacation that matters, but whether you are able to relax and unwind. Long-haul holidays are expensive and can be stressful, especially if it is to get away for only a few days. Therefore, a lot of families prefer to stay back and explore the local hotels and attractions that gives them a sense of escape without going too far," he added.
Raees Ahmed, director of Orange Fairs and Exhibitions and organiser of Halal Expo Dubai, says consumer spending, especially on organic and halal products, will drive the growth of consumption across the UAE.
"Consumption of goods and services are directly linked to the people's happiness and shared prosperity. As a country, the UAE is growing steadily with increased citizens' happiness. With a decline in the cost of living due to declining rents and property prices, people are expected to spend more on food and beverage prices. From our experience, we see an increase in the number of food and beverage producers to enter the UAE market - especially in the halal and organic segment," he noted.
Cyrus Engineer, managing director at Shapoorji Pallonji International Property Developers, states that when it comes to the UAE, the country offers all its residents excellent infrastructure to live a comfortable and hassle-free life.
"It is a tax-free haven that attracts people from all over the world. For Indians particularly, UAE is only a three-hour flight away, and as a result, a 'home away from home'," Engineer concluded.Going forward, the report predicts that high incomes, changing lifestyles, and increased health consciousness are expected to fuel consumer demand for goods and services in family-focused spending categories, such as education, and transport, as well as premium household products and services.
The report identified communication as the fastest growing category at 10.2 per cent CAGR through 2021 due to high penetration of smartphones and digital devices followed by health goods and medical services, hotels, education and leisure.
- waheedabbas@khaleejtimes.com
With inputs from Deepthi Nair