NEWS

The UAE Gems and Jewelry Market is expected to develop strongly throughout the forecast period, with a compound annual growth rate (CAGR) of 6.84% through 2029. The market was valued at USD 8.34 billion in 2023.

Introduction

If you’re passionate about jewellery and want to turn your passion into a successful business, there’s no better place to do it than in the United Arab Emirates (UAE). In particular, the city of Dubai stands out as a thriving hub for the jewellery industry. With its dynamic business scene and flourishing luxury market, Dubai offers unparalleled opportunities for jewellery businesses to shine. However, navigating the intricacies of starting a jewellery business in Dubai can be challenging. That’s why we’re here to guide you through the process and share insider tips to help you master the jewellery industry in the UAE.

FACTS

• The jewelry market in the United Arab Emirates is expected to generate US$0.41 billion in revenue by 2024.
• From 2024 to 2028, the market is predicted to grow at an annual rate of 1.78% (CAGR 2024-2028).
• In contrast to global statistics, India’s jewelry business earns the most income, projected to reach US$81,260 million in 2024.
• According to estimates based on per capita income, each individual in the United Arab Emirates is expected to produce US$42.59 in revenue within the Jewelry market in 2024.
• According to projections, luxury would account for 57% of jewelry market sales by 2024.
• In the United Arab Emirates, demand for opulent gold and diamond jewelry is still high, a reflection of the nation’s wealthy

Understanding the UAE Jewellery Market Landscape

To succeed in the jewellery industry in the UAE, it’s essential to have a deep understanding of the market landscape. Jewellery holds significant cultural significance in the UAE and the wider Middle East region. It is not only seen as a form of adornment but also as a symbol of elegance, wealth, and status. The UAE jewellery market is dynamic and highly competitive, with both local and international brands vying for customers’ attention. It’s crucial to stay updated with the latest market trends and consumer preferences to stay ahead in this rapidly evolving industry.

GOLD

Gold karats vary in the United Arab Emirates, although the most common ones are 21K and 18K. We shall be able to see gold metal in Dubai that is offered in 24 carat, 22 karat, 21 karat, and 18 karat weights.

Tax-Free Market: Dubai, a major trading hub, boasts a tax-free environment for gold, making it a popular destination for international buyers.

The pure gold form in this case is 24 karat.

• 22 carat gold is an alloy consisting of 8.33% additional metals and 91.67% pure gold.
• 21 carat is an alloy consisting of 12.5% additional metals and 87.5% pure gold.
• A mixture of 75% pure gold and 25% other metals is called 18 karat.

One of India’s biggest gold trading partners is Dubai, or the UAE. The Indian government recently inked a Comprehensive Economic Partnership Agreement (CEPA) with the UAE government, allowing for the subsidized import of up to 140 tons of gold from the UAE. India has reduced the 1% customs duties on gold imports for all banks that are registered and for the nation’s top jewelers to 14% of the entire value.

Precious Metal Derivatives

• It is anticipated that in 2024, the nominal value of the United Arab Emirates Precious Metal Derivatives market will be €12.12 billion.
• The predicted annual growth rate (CAGR 2024-2028) is expected to be 4.39%, culminating in a total estimated amount of €14.39bn by 2028.
• In 2024, the market for precious metal derivatives will have an average price per contract of €0.41.
• By 2028, it is anticipated that there will be 29.82k contracts in the United Arab Emirates’ precious metal derivatives market.

Key Market Players

• Damas Jewellery LLC
• Malabar Gold & Diamonds
• Sky Jewellery LLC
• Titan International (Middle East)
• FZE Tiffany & Co.
• Kalyan Jewellers FZE
• Joyalukkas Jewellery LLC
• Pure Gold Jewelers LLC
• Ceylon Master Gems FZCO
• Atlas Jewellery LLC

Major brands in the Middle East region, including Hand Diamond & Jewelry LLC, L’AZURDE, Safa group, and Chanel ,increased their online retailing platforms to grow the Middle East & Africa jewelry market share in 2021. For instance, in October 2021, TOUS, a Spanish brand, launched its e-commerce website in Arabic to better communicate with shoppers in the Middle East region and expand its market in the Middle East countries.

Market dynamics

The UAE jewellery market is home to a mix of local and international jewellery brands, with Dubai serving as a major hub for the industry. Among the key players in the market is Kalyan Jewellers, with 21 stores in the Middle East under Kalyan Jewellers LLC (UAE), Kalyan Jewellers WLL (Qatar), and Kalyan Jewellers for Golden Jewelleries WLL (Kuwait). In 2014, the company received a private investment of 700 Cr from Highdell Investment Limited (Warburg Pincus group). With a leading market position in the Indian jewellery market and a growing pan India presence,

Kalyan Jewellers is a major player in the UAE market with a focus on product diversification. The market dynamics are constantly evolving, with changing consumer preferences and trends. The strategic location of Dubai also provides opportunities for jewellery businesses to expand their reach beyond the UAE, tapping into markets in the Middle East, Africa, and beyond.

The cultural significance of jewellery in the UAE

Jewellery has deep cultural significance in the UAE and the wider Middle East region. It is considered an essential part of traditional attire and is often worn on special occasions and celebrations. Jewellery symbolizes elegance, wealth, and social status, and is passed down through generations as heirlooms. In Middle Eastern culture, jewellery is not just a fashion accessory but also a form of self-expression and artistry. Traditional designs, such as intricate filigree work and the use of precious gemstones, are highly valued.

Starting Your Jewellery Business in the UAE

Starting a jewellery business in the UAE requires careful consideration of legal and regulatory requirements. The UAE offers a business-friendly environment, with streamlined company formation processes and supportive government policies. Dubai, in particular, provides a world-class infrastructure and convenient access to global markets. Jewellery businesses can benefit from tax advantages, including 100% foreign ownership, exemption from corporate and personal income taxes, and no restrictions on capital or profit repatriation. It’s important to work with legal and business consultants who are familiar with the local laws and regulations to ensure compliance and a smooth setup process.

Legal and AML regulatory considerations for jewellery in UAE

The main law governing AML in the United Arab Emirates is Decree-Law No. 20 of 2018 on Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organizations. Dealers in precious metals and stones (DPMS) are subject to the Anti-Money Laundering (AML) regulation as a result of Cabinet Decision No. 10 of 2019 concerning the Implementing Regulation of this Decree-regulation. This implies that dealers in precious metals, jewels, and stones, as well as jewelers, are subject to the AML rule.

A list of Designated Non-Financial Businesses and Professions (DNFBPs) is provided by the Cabinet Decision. These DNFBPs, which include jewelers and dealers of precious metals and stones, are subject to AML rules. AML requirements apply to them if they do transactions worth at least AED 55,000.

When starting a jewellery business in the UAE, it is crucial to understand and comply with the legal and regulatory requirements. Obtaining a trade license from the Dubai Department of Economic Development (DED) or the relevant free zone authority, such as the Dubai Multi Commodities Centre (DMCC), is essential. The chosen location for the business, whether on the mainland or in a free zone, will have specific zoning regulations that need to be followed. Meeting the minimum capital requirements, obtaining certifications for the quality of products, such as the Dubai Central Laboratory (DCL) certification, and adhering to regulations related to precious metals and stones are also important considerations. Working with legal advisors who specialize in business setup in the UAE can help navigate these legal and regulatory requirements effectively.

Participating in local and international jewellery exhibitions

Participating in local and international jewellery exhibitions is an effective way to showcase your collections to a wider audience and connect with potential customers and industry professionals. In Dubai, there are several renowned jewellery exhibitions that attract visitors from around the world. Some of the key exhibitions to consider include:

• Jewellery Arabia: This exhibition, held annually in Bahrain, is one of the largest jewellery shows in the Middle East, attracting exhibitors and visitors from around the world.
• Dubai International Jewellery Week: This event showcases a wide range of jewellery collections, from luxury brands to emerging designers, and provides an opportunity to connect with customers and industry peers.
• VicenzaOro Dubai: This exhibition brings together international jewellery brands and industry professionals, offering a platform to showcase your collections and explore new business opportunities.
• Baselworld: Held in Switzerland, Baselworld is one of the largest and most prestigious jewellery exhibitions globally, attracting industry professionals, buyers, and media from around the world.

Why Choose UAE for Gold Business?

• The UAE is a significant gold trade partner for nations like China and India, who together supply more than half of the world’s gold demand. Countries that export gold, such as Switzerland and the United Arab Emirates, have benefited from the high gold prices that China, India, Egypt, and the United States have been able to obtain from overseas markets in recent times.
• A number of security and supply-demand issues prevent other Middle Eastern nations from allowing Automated Teller Machines (ATMs) to accept gold bars and coins, but the United Arab Emirates (UAE) is one of them.
• Dubai’s tax-free gold buying regime, which makes it a desirable location for gold purchases, is one of the main reasons fueling the boom. Furthermore, the government of Dubai has put in place a number of procedures to guarantee the quality and purity of gold that is sold in the city, which has increased buyer confidence. The creation of the Dubai Gold and Commodities Exchange (DGCX), which offers a safe and regulated environment for gold dealing, further increases the city’s allure.

Dealing with fluctuating gold and diamond prices

Fluctuating prices of gold and diamonds are common challenges faced by jewellery businesses. These price fluctuations can impact profit margins and pricing strategies. To deal with these challenges effectively, jewellery businesses can consider the following strategies:

• Stay updated with market trends and monitor price movements of gold and diamonds.
• Build strong relationships with suppliers and negotiate favorable pricing terms.
• Diversify your jewellery collections to include different price points and materials.
• Educate customers about the factors that influence pricing and the value of the materials used in their jewellery.
• Offer flexible pricing options, such as layaway plans or financing options, to accommodate customers’ budgets.
• Consider hedging strategies or entering into long-term supply contracts to mitigate the impact of price fluctuations.

Conclusion

In conclusion, mastering the jewellery industry in the UAE demands a comprehensive understanding of cultural significance, market dynamics, legal considerations, sourcing high-quality materials, and implementing effective marketing strategies. Crafting unique pieces that blend traditional Middle Eastern designs with modern twists and embracing sustainability and ethical practices are key to success. E-commerce plays a vital role in reaching a wider audience, while navigating challenges like fluctuating prices and evolving consumer preferences requires adaptability. By staying informed, innovative, and socially responsible, you can make a mark in this competitive market.

About Arnifi

Arnifi is digital first Corporate service provider helping companies enter the Middle East region, starting with UAE and Saudi Arabia markets. Founded and backed by professionals from Amazon, Souq and other large companies operating in KSA – the team understands what it takes to succeed as a startup in both UAE and Saudi Arabian markets, apart from going through the setup process multiple times. Arnifi will provide a truly digital experience to entry and scale up of companies both UAE and Saudi Arabia. Discover tailored solutions and strategic partnerships that propel your business forward. Check out at – www.Arnifi.com for more details.

Frequently Asked Questions (FAQ)

What are the initial steps to start a jewellery business in the UAE?

The initial steps to start a jewellery business in the UAE include obtaining a trade license from the Dubai Department of Economic Development (DED) or the relevant free zone authority, such as the Dubai Multi Commodities Centre (DMCC). It is important to comply with zoning regulations specific to the chosen location.

How can I differentiate my jewellery brand in the competitive UAE market?

To differentiate your jewellery brand in the competitive UAE market, focus on creating unique designs that reflect the cultural significance of the region. Incorporate traditional Middle Eastern designs with a modern twist and emphasize craftsmanship and quality to stand out from the competition.

What is the 22 carat Gold price ?

AED 264.75 = 1 Gram

AED2,575 = 10 Gram

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