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Advertising Spend for the Watch & Jewellery Trade in the Middle East for 2008
Total advertising spend for the Watch & Jewellery trade during 2008 increased by 13.5 percent (over 2007) for the Middle East
Advertising spend in most Middle East markets continued unabated, showed no recessionary trend during 2008
Lebanon registers highest advertising spend growth at 150 %, followed by the UAE & Saudi Arabia; Slight drop reported in Kuwait (-4%) and Qatar (-3%)
Magazines account for the lion’s share (46 %) of advertising revenues
In summary, despite global economic recessionary trends & plummeting oil prices, the mainstay of many of the Gulf economies, the total media spending in Arab Advertising Markets in 2008 for the jewellery and watches sectors increased by a healthy 13.5 % over corresponding 2007 expenditures (43 % over corresponding 2006 figures). All round increases were recorded in every major market in the region—principally the GCC (Saudi Arabia, UAE, Bahrain & Oman), the Levant (notably Lebanon) and in Pan Arab markets. The only downside to this continually incremental trend was evident in Kuwait (down 4 %) and Qatar (down 3%), small decreases in otherwise double-digit increases for all of the other markets.
Key considerations:
- Over 250 top, premium, international watch & jewellery brands were surveyed in this extensive report
- Media: Magazines / Newspapers / Television / Outdoor / Radio & Cinema
- All figures are in USD $ 000s
- GCC: Gulf Co-operation Council comprising the Arabian Gulf States of Saudi Arabia, Kuwait, Bahrain, Qatar, Oman and the UAE
- Pan Arab: Mix of Print Media / TV and Radio stations across the Pan Arab world
- Levant: Primarily Lebanon, Jordan and Syria
- For the purpose of this survey, advertising costs have been computed from the respective rate cards of individual publications. Barters, discounts and other considerations have not featured in this study.
- In this series, PARC—Gallup International has examined the media expenditure for specific brands as well as for principals / franchisees / retailers in the watches, jewellery and accessories both collectively and singularly for the Middle East region.
- The media has also been classified into Pan Arab Media which includes cross border TV stations such as MBC, LBC Sat, Future International (Al Mushtaqbal), Al Jazeera (Qatar) and Al Arabiya (UAE) to name a few; trans-national print media (publications with multi-country circulations) & regional radio stations.
Note to readers:
Cautionary & Acknowledgment:
All accompanying published data, numerical input, tabulated charts, statistical information, pie charts, histograms & graphics have been analyzed and provided by Pan Arab Research Agency (PARC) & Advertising Monitoring Services in association with Gallup International.
Readers are advised to note that the figures provided reflect advertising expenditure based on published rates of the various media involved. Not accounted for are the discounts provided, special rates applicable, barter deals, other bilateral considerations nor the commissions accrued to advertising agencies. Whilst the discounts would factor in the arithmetic and computation, MPParabia believes it will not significantly alter the overall perspective and emerging indicators of this very protracted and exhaustive PARC study.
As in previous years and with previous analyses, the MPParabia & www.mpparabia.com research team acknowledges with appreciation and gratitude the tremendous input, hard work and co-operation of the entire team at Pan Arab Research Centre, PARC, for access to all published data. Specifically, we would like to thank Sami Raffoul, General Manager and his dedicated team for their unstinted co-operation and support to this project.
Team MPParabia
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Advertising Spend—Upward trend
At USD $ 173.45 million in 2008, the total advertising spend (general, all categories) was up 13.5 % over corresponding 2007 figures across the GCC, Levant (Lebanon & Jordan) and Egypt. The region did not slow down and advertising spend for the industry in 2008 has been the highest ever. The big spenders continued to spend even more with bigger advertising budget allocations. The emergence of new brands has fuelled competition within the advertising industry and resulted in a massive boom in advertising spend across the board in all forms of media—print, radio, television and outdoor.
Optimistic though it may seem, one has to be cautious in making inferences, particularly in the last quarter of 2008, when the first effects of the global economic recession were first felt. An analysis of the monthly increase reveals a drop of 21% on ad spend in the region in October 2008. It gained 19% in November 2008 before stabilizing in December 2008.
Watches & Clocks Vs. Jewellery & Accessories
In every market and every sector, watches & clocks dominated the advertising landscape and accounted for the lion’s share of advertising spend relative to jewellery & accessories. The former accounted for 77 % against 23 % for the latter in the GCC & Levant markets; 68 % in the Pan Arab Media and individually, 75 % in the singular GCC markets and 87 % in the Levantine markets.
Industry continued to exude optimism in 2008 relative to 2007
The sizeable increment in advertising spend for the watch and jewellery trade across the surveyed regional markets of the Middle East in 2008 over 2007 and an even greater increase over 2006 clearly reflects the steadfastness & spectacular progress of the industry in the region.
The industry is an oasis of optimism and hope for global marketers and the vote of confidence is evidenced in the fact that brands continue to operate profitably, newer and larger boutiques are regularly being opened and others are still making a bee-line to this region. The Bvlgari Group is a case in point. While 2008 sales fell 12.5 % in the USA and 1.3 % in Europe, they rose 9.1 % in the Middle East and 1.6 % across the remainder of Asia, according to the company’s latest published statistics. Several other similar examples can also be cited.
2009 Recession casts its long shadow
The recession is beginning to bite even in the Middle East where retail sales across the board is witnessing a decline in 2009. In Dubai for example, it is reported that sales have dropped by 25 % whilst those in Abu Dhabi have dipped by 3 to 4 %, according to Majid Al Ghurair, Chairman of the Dubai Shopping Malls Group and President of BurJuman Dubai. .
Retail potential & infrastructure fuelling growth
The GCC’s retail sector is worth about USD $ 100 billion and is the second largest non-oil industry in the region. By next year, a massive 16.35 million sq. m. of Gross Leasable Area (GLA) is due for completion in the GCC, according to Retail International, a British Consultancy firm.
As a case in point, the Emirate of Abu Dhabi in the UAE will almost double its mall retail space in the next two years. The total amount of retail space in shopping centres will grow from the current 700,000 sq. m. of GLA to 1.2 million sq. m., according to Robert Ziegler, the Vice President of the Dubai-based consultancy firm AT Kearney. At least six shopping centres are scheduled to open in Abu Dhabi in the next three years, including Deerfields Town Square on the outskirts of the Emirate next year and the revamped Central Market, Abu Dhabi’s old souk, expected in 2011. Abu Dhabi also plans to attract 2.7 million hotel guests to the Emirate by 2012, according to an official of Abu Dhabi Tourism Authority (ADTA), a move that is likely to boost the local retail trade.
The opening of new mega shopping malls, such as The Dubai Mall and other retail centres in the region is providing a much-needed boost to the retail industry. New hotels are also continually being set up in the region (up to 30 new hotels in the region by end-2010 according to a recent report by a leading hotel advisory & consultancy group) and new tourist arrivals arising from the many new airlines operating in the region and new destinations constantly being added to their itineraries.
The re-export market is also very significant in certain pockets of the Middle East notably Dubai in the UAE, where a sizable portion of merchandise brought into the country is then re-exported to its vast and populous hinterland including the CIS countries, the South Asian subcontinent and Africa.
Saudi Arabia, UAE retain top two positions
Traditional regional powerhouses Saudi Arabia and UAE continued to maintain their top positions. In 2008, the UAE rallied from second place to topple Saudi Arabia from its top perch to become the single biggest advertising spender during the year. In 2007, Saudi Arabia had edged the UAE to take top spot as the biggest advertising market.
The UAE’s 2008 watch & jewellery advertising expenditure stood at USD $ 37.469 million representing an 18 % growth over the corresponding 2007 figure of USD $ 31.699 million. On the other hand, Saudi Arabia’s advertising spend of USD $ 32.464 million in 2007 was overshadowed by a modest 3% increase to attain USD $ 33.339 million in 2008.
GCC-single biggest advertising bloc
The six oil-rich GCC countries constituted the single biggest regional bloc for advertising spend with a cumulative annual 2008 budget of USD $ 101.8 million or roughly 60 % of the total Middle East expenditure. The 2008 figure represents an 11 % increase over 2007 statistics. Likewise, the GCC is also the single largest retail bloc in the Middle East.
Kuwait, Qatar stabilize in 2008 after attaining double digit growth in 2007
After two consecutive years of double-digit growth, advertising spend in Kuwait and Qatar declined slightly in 2008, after registering significant increases in 2007 over 2006 at 42.61 % and 48.88 % respectively. Kuwait’s 2008 advertising off-take was USD $ 12.538 million followed closely by Qatar at USD $ 12.357 million, reflecting a small decline of 4 % and 3 % over 2007 off-take respectively. The small fall may be more of a correction factor given the phenomenal growth increases experienced by these countries in 2007 when the spurt in advertising spend in Kuwait and Qatar increased by 42.61 % and 48.88 % respectively over corresponding 2006 figures.
In recent times, Qatar has shown marked dynamism in advertising expenditures and retail sales boosted by events such as the annual Doha Jewellery & Watches Exhibition, which in February 2009 held the 6th Edition of the Fair. An annual watch & jewellery exhibition is also held in Mishref, Kuwait.
Lebanon:
Lebanon topped the list of top media spenders for the Middle East’s non-GCC region. The country stunned the advertising community with a staggering 150 % increase in advertising spend in 2008 at USD $ 15.832 million over the 2007 figure of USD $ 6.331 million. Lebanon has a healthy and robust media industry, coupled with an equally vigorous retail market, which makes the country a natural recipient of generous media expenditure budgets. With the return of political stability, the Lebanese diaspora and the numerous tourists to the country, retailers and traders are on a roll. The country is also a big market for luxury goods in all product categories notably premium watches & fine jewellery.
Easy-to-read Presentation:
The professionally-conducted study has been attractively presented, for the first time, with colourful eye-catching illustrations, comprising bar charts, histograms and pie-diagrams accompanied by easy-to-read data and well-presented analyses. This ready-reckoner presentation contains, for the first time, such detailed & exhaustive information as media breakdown in advertising spend (TV, Newspapers, Magazines & other media); Ranking of Markets and media split; category split by media; 2008 media split; 2008 product growth; monthly spend analysis and overall media split analysis among other data presentations.
Importantly, the top 25 brands by region and media, and the top 20 brands on television, newspapers, magazines and other top spenders will be some of the highlights to be presented in the second installment of this Market Report.
Special Note:
The next Market Report will list the top ten spenders for the watch & jewellery industry in each of the GCC, Levantine (Lebanon, Jordan & Syria) countries and Egypt.
(Important Note: All data and published information is the copyright material of PARC, UAE).