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Bahrain welcomed its first Chanel store in March this year. The country, with its growing market, is emerging as a key player among those in the Gulf Cooperation Council (GCC). (The other five — Qatar, Kuwait, Saudi Arabia, Oman and the United Arab Emirates — already play host to Chanel boutiques.)
“Bahrain’s market has evolved, and its consumers are increasingly seeking high-quality, unique and sophisticated shopping experiences,” says Ingie Chalhoub, founder of Etoile Group, who is partner to several luxury brands in the region including Chanel, Etro, Tod’s and Aquazzura (all of which have stores in Bahrain). What led to an increase in consumer spending power and a demand for luxury goods, according to Chalhoub, is “robust economic growth, a vibrant cultural scene and diversified investments”.
Marassi Galleria mall is a prime example of this new era for investment. Located in Diyar Al Muharraq, an urban development of seven islands spread across 10 square kilometres of reclaimed land, it includes an extensive waterfront with sandy beaches to the northeast of Bahrain’s capital Manama and is home to Aquazzura, Etro and Jimmy Choo. “After many years, we have a large new mall open in Bahrain — Marassi Galleria is part of a larger project in that area. Most luxury players have waited for that project to open their Bahrain flagships, including Dior, Louis Vuitton, Gucci, Bottega, Chanel, Hermès [and] Bulgari,” says Jasmina Banda, chief strategy officer and SVP of fashion joint ventures at Chalhoub Group. “The quality of the project, as well as the available space and mix, allowed us to create a unique offering catered to Bahrain consumers and visitors.” However, she points out that many more accessible luxury brands, like Chalhoub Group-operated Saks Fifth Avenue, have remained in Manama’s City Centre mall.
Small yet significant
The Gulf region has long been a significant focus for the luxury industry — and now, Bahrain could play a key role in the strategy. Luxury marketing is close to saturation point in Dubai, according to Fflur Roberts, head of luxury goods at Euromonitor, with “global luxury brands ramping up their engagement in other Gulf cities, including Riyadh, Abu Dhabi, Kuwait and Manama”. Roberts also points to Bahrain’s relatively high ranking in Euromonitor’s Wealth Index, currently 24th out of 83 global markets. “This places the country ahead of neighbouring Qatar,” she adds.
Shifting demographics is also a bright spot. Bahrain’s population is set to expand by just over 15 per cent by 2040, according to Roberts. “Bahrain is set to become an even more attractive consumer market for luxury goods due to population expansion and its rising level of per capita income,” she says. As a tax-friendly country (Bahrain operates no personal income tax), the oil-rich Kingdom is diversifying into other sectors, such as financial services and tourism. “The market has been on everyone’s radar due to their investment in infrastructure. It’s a natural progression for luxury brands to focus more on Bahrain as it continues to develop,” says Fabrizio Cardinali, CEO of Etro.
While Roberts highlights that Bahrain was home to just 4,300 millionaires in 2024 — less than the 140,000 millionaires in Saudi Arabia and the 77,000 millionaires in the UAE — this number is set to increase by almost 50 per cent in the next six years, per Euromonitor predictions. Social class A (the highest income group), looks to be the fastest-growing social class, says Roberts, which “will bode very well for the luxury and fashion market moving forward”.
As it stands, it is a small market ranking fifth within the GCC for luxury spend, per Chalhoub Intelligence data, but it has a high potential for growth. So what’s missing? It’s the real estate locations that are lagging behind. If you look at the entire Middle East as a region, Banda says, Bahrain only accounts for 1 per cent of the high-end fashion market and 1 per cent of the prestige beauty market.
Some of the stores in the mall are unoccupied, but this could change. “We have seen a boost in sales in Bahrain with the opening of Marassi Galleria across both fashion and beauty,” says Banda. “It is too early, but the first indicators are positive.”
Bahraini shoppers are also more receptive to new brands and shopping experiences, say Shaikha Noor and Shaikha Haya Al Khalifa, the cousins behind locally based brand Noon By Noor, who have previously shown at London Fashion Week. “They are very value oriented and quite tight-knit in nature, which is advantageous for many businesses trying to establish a foothold in the GCC region.” Noor emphasises that within the Gulf, Bahrain is known for being “open and business friendly”. Etro’s Cardinali echoes this sentiment: “Lower VAT than Saudi Arabia, lower operating costs, strategic location in the Gulf area, and supporting infrastructures help entrepreneurs start new businesses.” Plus, the Bahraini dinar is one of the strongest currencies in the world. While oil production has ramped up, the Kingdom has established itself as a banking and finance hub in the Middle East, with initiatives like the Bahrain Grand Prix and the annual Bahrain Shopping Festival boosting tourism.
Bahrain positions itself as a shopping destination for regional visitors, too. “The proximity of Bahrain and the beachside mall Marassi Galleria is particularly interesting for residents of the wealthy Eastern Province of Saudi Arabia, including Khobar, who find it convenient to travel to Bahrain for their luxury purchases,” says Chalhoub. “The ease of access [has] made Bahrain a preferred shopping destination for these high-net-worth individuals.”
Traditionally, Bahrain has been a weekend destination for Saudi nationals and expats living and working in the Eastern Region of the Kingdom. “They often come to Bahrain to enjoy hotels and beaches, as well as entertainment — cinemas, restaurants — that were for years not fully available in [the Kingdom of Saudi Arabia],” says Banda. “As part of their (often weekend) visits, consumers also shop in local stores.” Plus, Saudi shoppers can get their VAT back, which is an even bigger pull. “It attracts Saudi shoppers who are looking for more engaging prices,” agrees Cardinali.
The Bahraini way
Bahrain has a relatively small population compared to its GCC neighbours. However, according to Al Khalifa, Bahraini consumers tend to punch well above their weight in terms of brand consciousness and responsiveness to marketing. Brands should remain aware of cultural preferences and adapt their buys and marketing preferences to work for Bahraini women. Chalhoub says personalised services are crucial. “They also appreciate a blend of modern and traditional styles,” she says. It is important to work with local key opinion leaders (KOLs) and content creators for launches and new collection releases.
Amman and Dubai-based contemporarywear brand Nafsika Skourti launched in Bahrain in 2019 at Alothman Fashion, a multi-brand store that has outlets in several GCC countries and is the team behind London-based On Motcomb, but decided to conduct an in-person trunk show in 2022 to get to know their clients better. “I noticed there were a few more requests to adapt our styles to be a little more modest,” says Stephanie Skourti, commercial director and co-founder of Nafsika Skourti.
“There are a lot of expats who have grown up in Bahrain, so customer preferences are varied.” Skourti also notes that the Bahraini customer is very well educated, well travelled and sophisticated. “It’s an international market, with locals and expats and tourists from the Eastern Province of Saudi.” So understanding the needs of the varied customer base is essential.
While it’s early days for Marassi Galleria, the opening of this landmark mall could lead to luxury brands looking at Bahrain with fresh eyes. As Noor says: “Bahrain’s market is small yet mighty with a growing consumer demand, which makes it an especially attractive launch pad for brands looking to expand within the GCC region.”
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