From a strategic vantage point in the United Arab Emirates (UAE), DB Schenker helps the world’s luxury brands meet growing demand for their products in Saudi Arabia, Kuwait, the UAE, Qatar, Bahrain and Oman.
Demand for luxury goods is strong in the United Arab Emirates (UAE), where shoppers visit global hubs like Dubai to buy high-end products from international luxury goods makers.
“The luxury goods segment is in high demand in the GCC region (the Gulf Cooperation Council, includes Saudi Arabia, Kuwait, the UAE, Qatar, Bahrain, and Oman),” said Yasmina Beloued, Luxury Key Account Manager, for DB Schenker in the UAE. “This sector of the market is picking up quite well, with some brands now opening stores and otherwise expanding in the region.”
Credit the region’s high COVID-19 vaccination rates with driving some of that momentum. Currently number one in the world when it comes to vaccination rates, the UAE had administered over 17 million vaccine doses as of late-August.
This, combined with the pent-up demand that occurred in 2020 during the pandemic-related shutdowns and travel restrictions, is making the vibrant shopping culture in Dubai a key target for the world’s luxury shoppers. And because these buyers enjoy seeing, touching, and trying on their high-end purchases before they buy them, many of them still flock to malls and stores (versus buying online).
Flexing to Meet Customers’ Needs
Not immune to the far-reaching impacts of the global pandemic, the luxury goods sector leaned heavily on reliable logistics providers like DB Schenker during the time of crisis. Springing into action and ready to help, DB Schenker utilized freight flights and worked closely with its origin and destination teams to help minimize potential cargo delays.
With many customers relegated to shopping online due to lockdowns, DB Schenker also helped luxury goods manufacturers set up more robust e-commerce marketplaces. In Dubai, for example, one luxury brand began storing products at the logistics provider’s facility, where goods were quickly picked and shipped to stores once an order was placed.
Pre-pandemic, the time from the moment cargo was picked up at the origin and delivered to its destination averaged about 2-1/2 days. In 2020, that time nearly doubled to four days. To help luxury brands whittle down this timeframe, DB Schenker began offering guaranteed 48-hour delivery timelines via its concierge express service for urgent orders. Those orders typically involved high-value or exotic goods (e.g., snakeskin bags or high-value leather products), and were guaranteed to be at their destinations within two days or less.
Successfully managing the logistics and transport of luxury goods requires a well-orchestrated process that starts when the product leaves the manufacturing plant and ends when it reaches its final destination. Between those two points, manufacturers require many different valueadded services, including direct carrier services (to ensure predictable lead times), cargo security (for high-value goods) and boutique services (unpacking of the boxes or pallets in the storeroom).
The pandemic created a need for even more value-added services, including the extra packaging and tracking required for ocean shipments—a mode that became vital when the world’s air travel was put on hold. Equipped with tracking devices that provide a high level of supply chain visibility and vital information like current humidity levels, the shipments were well cared for and watched over as they made their way across the ocean.
DB Schenker also helps one customer pre-book its airfreight space (to ensure coverage), receive its cargo, repack/palletize that cargo, and then deliver it to the customers’ regional distribution centre. “We’re the first ones to receive the cargo from overseas,” said Beloued. “From there, the luxury brand transports the cargo locally to other GCC countries and destinations.”
Coming Soon: EVs
Through its cargo segregation services, DB Schenker receives luxury goods on pallets, breaks them down into individual orders, and then repackages and re-palletizes the products according to its customers’ wishes. For example, if an order of 100 leather purses arrives in Dubai from Paris, then 40 of those purses may need to stay in Dubai while the other 60 are split between Saudi Arabia and Bahrain. DB Schenker segregates the order, packages it into three different shipments, and then delivers those shipments to the three destinations.
These are just a few of the strategies that DB Schenker deploys to support the varying needs of the luxury goods segment in the UAE, where its next initiative will be to introduce electric vehicles (EV) to its delivery fleet. Knowing that organizations and individuals worldwide are paying closer attention to environmental sustainability and the size of their carbon footprints, DB Schenker wants to do its part to reduce any negative impacts of logistics and transportation movement.
“Luxury fashion brands want to know that their practices are sustainable and eco-friendly, and especially when it comes to transportation and logistics,” Beloued said. “As part of that mission, they're highly interested in electric and hybrid trucks that feature reduced CO2 emissions. To fulfil this need, DB Schenker is currently working on several EV solutions that will meet our customers’ needs in this regard.”
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