City of Gold
By Lorna Goodyer
Dubai’s gold and jewellery industry rakes in almost $4 billion a year and its souk is a must-see for any jeweller en route to Europe. Lorna Goodyer reports.
Dubai is a mecca of superlatives. In a city famed for ‘bling’, where money talks and every skyscraper is bigger and better than the last, it should come as no surprise that Dubai touts itself as the city of gold.While the UAE state’s economy might have hit the rocks last year when the Global Financial Crisis caught up with it, Dubai still claims to be the fastest growing gold centre in the world. It imports on average 300 tonnes of gold annually for retail and wholesale, and estimates suggest approximately 10 tonnes of gold is present in its burgeoning gold souk, which packs almost 300 retailers into an area of half a square kilometre.
One of the largest retail gold markets in the world, Dubai has become a regional hub for gold and jewellery trading and the industry is worth Dhs12 billion ($3.76 billion) annually – no mean feat for a retail hub whose economy is said to be in the doldrums.
The state’s famous gold souk is at the heart of this market, and with more yellow eye-candy than you can shake a stick at, no jewellery retailer or supplier should miss the opportunity to take a tour of its narrow streets.
From basic to intricate jewellery
The covered souk sits in complete contrast to the sleek and glossy new Dubai. In fact, Dubai’s history with gold and jewellery began long before the oil boom in the 1970s that created the catalyst for rapid expansion. Pearling formed a large part of the ancient history of Dubai and the city’s reputation for gold and jewellery was formed during its years as a major trading port in the 19th century.
Tightly concentrated in the east of the city, Dubai’s gold traders are renowned for offering some of the lowest gold prices in the world, thanks to UAE’s free trade policy. The origins of the gold souk can be traced back to the 1940s, when that policy attracted jewellery entrepreneurs from India and Iran who established stores there.
Small, independent shops now operate alongside established retailers – including Damas, ARY Jewellery, Prima Gold and Joy Allukas Jewellery – and in recent years the retail offer has been further ramped up, with new gold shopping centres such as the Gold and Diamond Park and New Gold Souk Center being built. Most vendors in the souk operate on a high turnover and low margin strategy.
1 of more than 300 small jewellery stores
Taking a tour of these streets, it is hard not to get caught up in the hustle and bustle of the market. While the traders are largely Indian, mostly operating from stores no wider than 4 or 5 metres, the customers traipsing the souk are varied – from well-dressed Westerners to locals clad in traditional garb, the gold souk is a melting pot of nationalities.
Next year, the government intends to begin monitoring and regulating the Dubai gold market in a way it never has been – a move that has been welcomed by the industry’s gold and jewellery body.
Here’s to hoping that tighter rules won’t take the shine off the glitz and glam that make the industry’s city of gold such a draw for consumers and retailers alike.
Posted August 24, 2010