Why are things so expensive in Kuwait?

Having discussed this with numerous people on numerous occasions – most will conclude that Kuwait has a very over priced consumer market when compared to our European and Stateside ‘Neighbours.’

But why? It must be the sky high ‘operational costs right? Err….Nope….Let’s examine the basic facts:

  • Cost of living here is relatively cheap
  • we have no taxes on income
  • we have a minuscule 5% import tax on goods arriving from overseas
  • we employ cheap labour forces
  • we have access to cheap fuel

In Reality, the only thing which could be deemed ‘expensive’ are the rents – which incidentally are still reasonably priced per sqm when compared with other large cities. So again, I have to ask why is Kuwait so expensive for consumer goods?

Here are the basic assumptions which I have derived:

a) Monopolistic Market Characteristics: In Kuwait, people take established ‘brand-names’ on an ‘exclusive’ basis whereby they become an ‘agent’ for the International mother company.

Whereas in Europe or the US anyone can become a McDonald’s franchise owner – in Kuwait (typically) only one person controls the entire market for that product. Let’s not single out McDonald’s here – the same goes for all Cars, Food and Electronic items.

So it’s Lucky for the owner – but unlucky for us, the consumer.

The Agent is thereby authorized to put any desired markups on products which typically far exceed the manufacturer’s recommended retail prices.

Well we do have a few choices don’t we? I mean we can go to another store and buy our ‘Sony’ DVD player right?

Kind of true, but when you see that the prices are very similar (because remember the agent is controlling the supply) – then things start to become decidedly frustrating for the consumer.

So what options do we have other than looking for another brand?

Well, we could buy off of the ‘Grey Market’ (non authorized dealer) but as I can tell you from experience, this can be a painful issue should anything happen to your ‘non-authorized’ unit. Taking a ‘grey’ unit to the dealer is as worthwhile as taking in a different brand altogether.

b) Pure Greed: Long established companies, who have had an agency for many years, quite frankly, don’t care what we the consumer think of their prices. As far as they are concerned – we can pay the price on the sticker – or we can get out and find something else.

Owners have already milked enough money from their brand to cover all their expenses and their initial investments – so to them, it’s just another sale…..

The ‘hot brands’ are especially easy to maintain and subsequently abuse due to the elaborate amounts of R&D capital reinvested by the International Mother company per annum. This is to ensure that their designs /technology stay ahead of the chasing pack for the following season.

In all cases there is not much good news for the average consumer and the archaic problem of overpricing in Kuwait is unlikely to end anytime soon.

So is there a solution? Well yes, but it’s a long shot….perhaps I should rephrase that – a very long, long, extra long shot.

Only when the Government interferes and abolishes Monopoly ownership OR the consumer collaborates through mass boycotting (example: use International Internet Services) will we finally see prices drift down to more ‘worldly’ acceptable levels.

Of course, there is another slight problem…..It’s not so easy to order your favorite Big Mac and Fries via FedEx now is it?

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9 Responses to Why are things so expensive in Kuwait?

  1. forzaq8 says:

    i like how the brand pictures have at least 3 banned brands in kuwait 😛

    anywya , i would go with B , most companies are greedy and do not care what you want or how you feel , customer serivce in kuwait is in a very bad state , if people tell you company A has good customer service that mean they pick the phone and answer from time to time

  2. darkman says:

    Definitely a lot of greed in Kuwait.  Most shops charge shoppers high prices and have very poor customer service.

  3. H.T says:

    Prices are bad in q8 because of what you said, monopolies. But there is no chance of the government changing the rules. You forget that most of the Government is filled with the people who own all these big brands. lol.

  4. cutie b-blue says:

    It also doesn’t help us when large companies like Al Shaya are controlling huge amounts of the retail industry. Kuwait needs competition to improve.

  5. CyberRowdy says:

    its ridiculous that people cant bring in the products to kuwait if the product has a dealer here already….things like this act as protection to the cruel businessmen who sell for double the price and give 100 KD salary to each employee he makes use of selling the items.

  6. naughty star says:

    Toxy, the problem in Kuwait is the lack of professionalism. They want everything cheap except their prices. They don’t really think of a long term business plan. People are now traveling outside to buy their stuff which they can get from Europe for cheaper despite having to pay for an airline ticket and hotel. It’s crazy!

  7. Judi says:

    just checkin things out

  8. excause ME! says:

    THAT’S A LIE i AM KUWAITIT AND THAT ALL FALSE

  9. Shrief says:

    very true .. I live in kuwait and everything is expensive for example I got an ipad 3 months ago from the us for 250 KD 3g 64gb while the price in kuwait was 450 KD!!!

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