Target Market

The business will be targeting expatriates in Dubai. This decision has been arrived at due to varied demographics and psychographic data that indicates expatriates would make for a favorable target market. To begin with, Dubai is the most populous city in the United Arab Emirates. In 2013, UAE population stood at 9.2 million. Expats contributed to around 7.8 million of this population (Guide2dubai, 2016). This is to say that expats make up more than 80% of the UAE’s population. As a result, targeting expatriates is the prudent thing for the business since they provide the largest market share in Dubai.

The segments of the expatriates that the business will focus more on are expats from South Asian and Western countries. South Asian countries contribute to around 58% of the UAE population. India alone accounts for 40% of the population (Khamis, 2014). Indians are a favorable segment given that they are the biggest buyers of jewelry in Dubai. According to jewelry group and the Dubai Gold and gold merchants, it is not Arabs, Europeans, Emiratis or even tourists who purchase most jewelry as a single group, but it is the Indians (Omar, 2014). Indians tend to have a liking for jewelry since it has a connection to various aspects of their life. It has religious importance, it is viewed as an investment, and it is utilized as adornment. This is an indication of why Indians need the jewelry. The Indian population buys jewelry on a large scale in Dubai, more so during festive seasons such as Dubai Shopping Festival (Omar, 2014). In mid-2016, the Indian government was working to ease customs clearance for expats that were traveling back home with varied jewelries (Khamis, 2014). When customs are working on such a framework, it is an indication that Indian expats are used to purchasing large amounts of jewelries in cities that they work in including Dubai.

Expats from Western countries comprise only 8% of Dubai population. However, they are a lucrative target market for the costume and fashion jewelry niche. This is because expats from most western countries are usually professionals earning large salaries compared to expats from these other countries. This means that affording different types of jewelry will not be a problem for them.  Another aspect is that jewelries in their home country are more expensive compared to the prices that they will get here. As a result, they are likely to take the initiative of purchasing more (even buy for their friends and families back home). This shows why expats from Western countries need this jewelry.

Some psychographic data can also be used in showing why expats are the best target for this business. More than 65% of expats in Dubai think that they are earning more than they would be earning back home (Go-gulf, 2016). This is to say that their expenditure prospect is likely to be high as they feel more contented about their income levels. The benefits in UAE that are received by expats also seem to be high compared to global average figures. Health and medical allowance is 70% in UAE while the global average is 52%, accommodation allowance is 60% while global average stands at 33%, annual trips to home allowance is 67% compared to global average that stands at 33% (Go-gulf, 2016). This is to say that expats working in Dubai will feel like they have a better disposable income hence their probability to purchase jewelries is high since their propensity to spend if boosted. It will also be viable to target both men and women. Most jewelry stores in Dubai put more emphasis on women, but this approach normally culminates on failure to capture a bigger market share. Dubai has among the highest male to female population imbalance ratio that is more attributed to the expats residing there. 75% of the 2.2 million is composed of men while 25% is composed of women (Khamis, 2014). This means that targeting women alone would lead to the business not fulfilling the needs of the target market.

Costume and Fashion Jewelry Market

Jwelix intends to dwell into the niche of costume and fashion jewelry. This niche is involved with jewelry that is made with materials that are less valuable compared to other valuable materials such as platinum, diamond, gem, gold and other precious metals. This niche is experiencing substantial growth in Dubai. Among the drivers that are contributing to this growth is the fact that many consumers have the desire to purchase jewelry that makes them look fashionable while maintaining a low budget at the same time (eBay, 2016). The prices for solid gold, precious gemstones and diamonds can be high for consumers that want to coordinate their jewelry with different outfits. The rise in demand for men’s jewelry has also attributed to the growth of this jewelry niche (eBay, 2016). Jwelix intends to operate as an online store, which comes as a favorable approach given the ongoing growth in the e-commerce industry. People of the United Arab Emirates are yet to embrace e-commerce exponentially, but the prospects are quite good. In 2016, the value of e-commerce in UAE was estimated to be around US $2.8 billion. There is the expectation that the market will grow to $10 billion by 2018 (Forbes, 2016).  Currently, Dubai alone accounts for 46% of online shoppers in UAE. The growth is expected to continue in the positive direction. This means that if Jwelix positioned itself appropriately, it would have the ability to grow as the market continuous to grow.

In terms of competition, there are several stores offering costume and fashion jewelries in Dubai. Among the most notable ones, there is souq.com and namshi.com. Namshi.com offers a variety of products and has incorporated jewelry in its offering. However, there is more focus on women jewelry. There also seems to be numerous negative reviews about this store on different online stores when it comes to customer service. Souq.com also operates on a similar model like namshi.com, and they are more inclined to women when it comes to the jewelry offerings. This is among the things that will make people buy from my business as opposed to such retail outlets. Prior data has shown that male expats in Dubai account for almost 75% of the population. It has also emerged that men’s jewelry is among the aspects that are contributing to the growth of the costume and fashion jewelry niche. Giving the desired focus to this consumer group is likely to make people purchase from Jwelix in light of other retail outlets that are in existence. Another thing that will prompt consumers to buy from Jwelix is the reduced prices that will be offered. The business will be providing high-quality products at lower prices compared to competitors. This is likely to result in low-profit margins for the business, but this will be offset by increased sales levels. Selling at a lower price will help the business to capture a substantial market share, which will result in increased profits in light of the margins involved. When a business creates value for consumers, they are likely to remain loyal due to the satisfaction that is being derived.

The business will establish itself as a USP by selling products from award-winning emerging jewelry designers. The target will be more on designers who were featured in 2016 Dubai magazines and won varied jewelry designer awards. These designers will not be expected to sell their products through any other stream, but only through Jwelix. This will ensure that the business is providing a unique offering to consumers since the products that will be on sale will not be available anywhere else. The designers that will be involved have already made a name for themselves and have established a following, which will make it easier for the business to make sales even with its inception. This is because being featured in magazines and trade shows as the best in various categories helps build a favorable rapport with potential consumers. The business has approached Marjan Shakeri to feature on the company’s platform to act as an intermediate reach to consumers, and the response that was received was quite positive. Marjan Shakeri only operates in Iran, and my proposal aroused her interest to venture into Dubai’s market. The business is also in the process of contacting Harshmi Sheth who was recognized and rewarded last year for producing creative jewelry designs.

References

eBay,. (2016). Is Costume Jewelry the Same as Fashion Jewelry?. eBay. Retrieved 26 February 2017, from http://www.ebay.com/gds/Is-Costume-Jewelry-the-Same-as-Fashion-Jewelry-/10000000177633015/g.html

Forbes,. (2016). E-Commerce Gains Ground On Malls In UAE With $2B In Online Sales. Forbes.com. Retrieved 10 February 2017, from http://www.forbes.com/sites/suparnadutt/2016/11/11/e-commerce-gains-ground-on-malls-in-uae-with-2b-in-online-sales/#36be9c0730e5

Go-gulf,. (2016). Expats in Middle East – Statistics and Trends [Infographic]. Go-Gulf. Retrieved 26 February 2017, from http://www.go-gulf.ae/blog/expats-middle-east/

Guide2dubai,. (2016). Expatriate Population of Dubai UAE. Guide2dubai.com. Retrieved 26 February 2017, from http://www.guide2dubai.com/visiting/tourist-information/uae-population

Khamis, J. (2014). Dubai population ‘unbalanced’, stats show. GulfNews. Retrieved 26 February 2017, from http://gulfnews.com/news/uae/society/dubai-population-unbalanced-stats-show-1.1380034

Omar, S. (2014). Who buys most gold in Dubai souqs?. Emirates 24/7. Retrieved 26 February 2017, from http://www.emirates247.com/news/who-buys-most-gold-in-dubai-souqs-2014-08-29-1.561161

 
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