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- 3 Aug 2015
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The Untapped Potential Of Iran For Luxury Goods Brands

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Iran is quickly developing into one of the fastest-emerging luxury travel destinations in the world and – combined with the rising rate of disposable income of its population and positive political developments in the pipeline – it could become the next lucrative hotspot, explains Mathew Dixon, director of Hudson Walker International.

Over the past twenty years or so of business we have often been lucky to have insights from luxury leaders as to how they saw their brands expanding globally.

Many countries such as Dubai and China quickly become cornerstones of growth, whilst others such as Brazil and India promised a great deal, but instead delivered greater challenges than expected. Most recently Africa and, in particular, the increasing wealth of Nigeria has attracted a great deal of attention, with brands such as Escada, Ermenegildo Zegna and Porsche all opening operations in 2014.

However, over the past few months a new country has appeared on the radar: Iran.


 Iran has always possessed a rich vein of cultural opulence and appreciation for design 


Iranian President Hasan Rouhani was elected to office in June 2013 and set out a manifesto based upon a civil rights charter with increased levels of personal freedom, and addressed issues such as women’s rights. Significantly he also wanted to rebuild relations with the West and entered talks to agree a deal between Iran and six world powers to limit its nuclear programme in exchange for sanctions relief. Should this political agreement be achieved it will provide a clear opportunity for global luxury brands within a potentially very receptive market.

Iran has always possessed a rich vein of cultural opulence and appreciation for design, particularly in the capital Tehran. Within the city the art scene is booming. Vahdat Hall, the city’s opera house (which was built in 1967 to replicate the Vienna State Opera) was reopened and there is a vibrant street art scene developing and being recognised globally through Instagram.


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Naqsh-e Jahan Square, Isfahan, Iran


Western luxury brands have particularly taken interest in the first ever Tehran Fashion Week which took place in February this year. This is indicative of the changing way women and men are dressing in the city where boundaries are being pushed of what was previously deemed acceptable.

Neda Sadeghi, a designer showing at Tehran Fashion Week, recently told media; “My main goal is to show my line to bigger companies in the West. There are two sides in design and fashion in Iran, the everyday legally allowable to wear on the street and the other side of it is what women wear at home or at private parties. But you can still see lots of different designs and colours on the street and in all the boutiques.”

Tehran is also now one of the fastest-emerging luxury travel destinations in the world. Although British, American and Canadian tourists must be accompanied by a guide at all times in Iran, Travel the Unknown, a group and bespoke tour operator, owned by David McGuinness has seen a four-fold increase in interest. “It’s gone from being one of our niche destinations to being one of our more significant destinations, I put it down to the political change and people’s perceptions of Iran.”


 The potential of the region was recognised by Jean-Christophe Babin, the CEO of Bulgari 


A population of over 80 million people have had their appetite for luxury brands whetted by years of counterfeit distribution of watches, handbags and jewellery and an increasing selection of genuine product from the grey market.

The potential of the region was recognised by Jean-Christophe Babin, the chief executive of Bulgari; “It’s very wealthy and you have a population in Iran which has been used to luxury. Iran will be the next big thing in the Middle East … We were active in Iran years ago. So we know the market, and we have plans for that market.”

Like early adopting Chinese and Russian consumers before them, a culture of ostentatious demonstration of wealth is developing in Iran, particularly in the capital Tehran.

“Exposure to foreign trends through travelling, the internet and satellite television has created a desire for branded products,” Bahar, a 30-year-old fashion blogger told BBC Persia.


 By spending huge amounts of money on big brands, well-off Iranians want to show they’ve made it 


“Showing off is a big part of the story. By spending huge amounts of money on big brands, well-off Iranians want to show they’ve made it.”

The opportunity in Iran for luxury brands becomes particularly attractive when you look at the disposable income of its population. Despite years of sanctions, the International Monetary Fund puts Iran’s per capita GDP at $16,500. Put into context, this is more than China, India and Brazil.

It is this figure which means the opportunity in Iran is being so carefully monitored. Under current sanctions, it is not illegal for Western luxury brands to sell their products in Iran. However getting any profits out of the country is very challenging.

If, as expected, a compromise is reached between President Rouhani and Western leaders and the economic sanctions relaxed, the massive potential of Iran as a credible and lucrative luxury goods market will undoubtedly be realised.





To further investigate the Chinese luxury consumer on Luxury Society, we invite your to explore the related materials as follows:

- What Does China’s Market Correction Mean For Luxury?
- Is Switzerland Losing Its Shine?
- Is Thailand’s Luxury Market Making A Comeback?


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Mathew Dixon is a Director of Hudson Walker International, a global luxury recruitment firm, conducting luxury executive search services since 1993.

www.hudsonwalker.com