Spanish entrepreneurship in Dubai: ICEX recommendations
Following FashionUnited’s interviews with the Spanish founders of Dubai-based fashion and lifestyle brands Montroi and Coma, we now flip the coin on Spanish entrepreneurship in the emirate to focus our attention on how to start a business in Dubai from outside its borders. For this journey, we have the invaluable guidance of ICEX, the public business entity under the Ministry of Economy, Trade and Business of the Spanish Government, dedicated to supporting Spanish companies in their commitment to internationalisation.
At a time when geopolitical tensions have redrawn the framework of trade relations between countries and economic blocs that are still far from being re-established and amidst this climate of uncertainty fuelled by the United States Government and its president, Donald J. Trump, the need for companies to open new markets for the export of their products has become especially clear.
These are markets from which they try to continue growing, if not offset the impact of those generalised 15 percent tariffs that have been agreed upon, for example, in the case of European imports to the US. Among these markets, for various reasons, Dubai and the United Arab Emirates (UAE) present themselves as a particularly attractive option, especially for Spanish companies in the fashion sector, given the positive reception that national fashion and footwear products and Spanish brands are already experiencing among the local population. This acceptance has led to Spain being positioned among the main importing countries of fashion and footwear to the UAE, within a trend that points to a steadily decreasing dependence on fashion from Asia, which still dominates the market.
“Spanish fashion is perceived as a good quality product, with modern designs and more competitive prices than other European countries”, ICEX told FashionUnited. The offering of Spanish companies, in fact, “is positioned in the medium-high sector”, and among all those already operating in the country, “Mango, Zara and Loewe stand out above all, although other Inditex brands are also present, such as Massimo Dutti, Oysho, Pull&Bear and Bershka; Springfield, from the Tendam Group; and Adolfo Domínguez”.
In fact, “more and more Spanish fashion brands are entering the UAE market”, including footwear brands “Alma en Pena, Toni Pons, Pretty Ballerinas, Pablosky and Camper, among others”, as well as children’s fashion, such as “Tutto Piccolo and Mayoral”, without forgetting other Spanish brands also present in the UAE such as “El Ganso and the Textil Lonia group”, responsible for the development of the fashion brands CH Carolina Herrera and Purificación García and owner of the Christian Lacroix brand.
An import market
Seeking to highlight the potential that Dubai and the UAE offer as export markets for Spanish fashion and footwear products, ICEX points out the UAE's strong profile as a clear import market for this product category. These are items that are currently still being supplied mainly by companies from Asia. This region continues to dominate fashion imports to the UAE, originating more than 70 percent of imports in 2023. However, there is a clear downward trend and a move towards greater diversification of these imports, as demonstrated by the fact that in 2015, this percentage stood at 89.6 percent.
This gradual decline in the weight of Asia within the trade balance of fashion and footwear imports to the UAE would highlight how the supply from other regions is managing to grow and establish itself within the local community. This community is increasingly global and has a more international profile in hubs such as the city-state of Dubai. This acceptance would present clear opportunities for growth and to continue balancing that trade balance, in which Europe is positioned as the second largest fashion supplier to the UAE, with more than 20 percent of imports in 2023, with Italy, France, Turkey, the UK and Germany as the main importing countries, followed by Spain, which is positioned as the sixth main exporter of fashion to the UAE.
Looking in more detail at the country’s role as a supplier of fashion and footwear, among “Spain’s exports to the UAE, those of Spanish leather goods and footwear stand out, which have increased in recent years and, specifically in 2024, by 7.93 percent and 13.41 percent respectively”, ICEX points out. This growth, however, they add, has occurred on a historical basis that shows how “Spanish fashion exports in general have been experiencing great ups and downs in the last five years”.
A strategic location
Completing this overview, in addition to the potential that Dubai and the UAE could present for the international expansion and growth of Spanish companies in the fashion sector, ICEX also highlights how, beyond operations within the country itself, having an active presence in Dubai and the UAE can serve to open up new opportunities for growth, both in the UAE and in all sorts of other markets in Asia, the Middle East and North Africa. This potential would stem from the particularly strategic location occupied by the UAE, as a shopping centre for companies from all these different regions.
According to ICEX, “the main international fashion brands want to be present in the UAE”, but “not only because of its popularity as a shopping destination, but also because it is a great regional showcase and the gateway to the MENA (Middle East and North Africa) market”. The fact that the UAE is “one of the main importing countries in the world for fashion, and the first in the Middle East and North Africa”, highlights “its privileged position as a shopping centre and its excellent logistical facilities”. These competitive advantages, however, can be affected by “the fall in oil prices and geopolitical tensions in the area”, which “have already led to ups and downs in imports in the fashion sector in the last decade”, although “the trend in the last four years has been one of growth”.
The importance of shopping centres
Having already outlined the reality of Dubai and the UAE as potential markets for the export/import of Spanish products, we now focus our attention on their retail reality, to discover how to make the ambition of operating within Dubai and the UAE a reality. To achieve this objective, it is essential to understand the importance of, first, the shopping centres, and second, the large franchising groups that ultimately facilitate the growth and presence of the main international brands in the country.
“The particular climate of the country makes the shopping centre the usual distribution channel, where, in addition to shopping, one can enjoy a wide range of activities”, and in fact it is a format that “accounts for 95.1 percent of total sales, while the rest corresponds” mostly to the online channel, which, ICEX points out, “has experienced growth of 308.3 percent since 2014”.
From this particular retail reality, Emirati private franchising groups take on special importance. These are family-owned companies that “rent large areas in the most important shopping centres in the country, which allows them to negotiate more competitive rental prices”. This “makes it highly recommendable to partner with one of these groups in order to operate in the UAE”, and in fact “Spanish companies enter the UAE mainly through the franchise system”, partnering “with a local partner”; while “to a lesser extent, some companies start in the Emirati market through corners in some fashion establishments”.
A demanding and highly competitive market
To conclude, ICEX presents a summary of the main keys that define the Dubai and UAE market, which should be taken into account when it comes to opening the region as a new export market. These keys are related both to the particular retail reality in which international companies that maintain or seek to open operations in the country operate, and to the nature and purchasing behaviour of the local buying community.
Starting with the latter point, local consumers “continue to prioritise quality fashion from internationally recognised brands, despite the decline in purchasing power in recent years”. Combining both realities leads to “the main shopping periods” being “the sales seasons, which occur several times throughout the year”, within the framework of festivals and events such as the “Dubai Shopping Festival, Ramadan, Dubai Summer Surprises, etc.”, and “which consumers prefer to wait for”. As for the nature of the offer, the “growing demand and interest in sportswear stands out, due to the change in lifestyle towards a healthier one among the population, as well as the already established athleisure trend, whose consumers require comfortable and stylish clothing and footwear”.
As for the former, and elaborating on what has already been mentioned about these private franchising groups, the truth is that “the leadership of the sector is dominated by a few, but large, local retail companies, with very short distribution channels and representing a wide variety of brands”. These groups “constantly receive offers”, so they demand “a very high level of differentiation from new brands that want to enter the market” with their help.
In addition to this differentiation, there is also the requirement of having “a high level of recognition” as an “international brand, which makes it difficult to access possible negotiations”. It also creates a market that is certainly demanding when it comes to accommodating new operators, and also highly competitive, both for those companies that try to do so and for those that succeed. The reality today “of the fashion market in the UAE”, ICEX analyses, is that of a market that “is very mature and highly saturated with brands”. This saturation “affects the entry of new competitors”, and requires new brands to operate with a policy of “very tight prices and margins” when dealing with consumers.
- Dubai and the UAE are attractive import markets for Spanish fashion due to the good acceptance of the products and a decreasing (although still largely majority) dependence on Asia.
- ICEX highlights the importance of shopping centres and franchise groups for operating in the UAE, with franchising being the main entry system.
- The Dubai market is demanding and competitive, with consumers prioritising recognised brands, and has a high level of saturation, requiring differentiation and tight pricing for brands aspiring to operate in the emirate and the strategic UAE market.
This article was translated to English using an AI tool.
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