From modest market to global giant: The journey of Dubai as the City of Gold

As a young boy, Mihir Vaya assisted his father in running their small jewelry business in Dubai.

He recalls riding with his father across Dubai Creek on an abra boat to deliver their creations. He remembers a time when the Gold Souk, now filled with countless shops, was just a few makeshift stalls clinging to the riverbanks. But most of all, he recalls working alongside his father in their workshop, where he and his sister held gold wires to be shaped into beautiful pieces of jewelry.

“Those tasks might have seemed trivial, but they made you feel so important,” says Vaya. “From that moment on, I’ve always been drawn to the craft.”

Ashwin Vaya, Mihir's father, is among the many Indian traders, jewelers, and entrepreneurs who arrived in Dubai in the late 20th century to pursue opportunities in the booming gold industry. Together with visionary Emiratis and other immigrants from across the region, they played a pivotal role in turning Dubai into a global hub for gold.

Before the pandemic, the gold and jewelry industry accounted for 20% of the UAE’s total non-oil exports, with the majority originating from Dubai. Each year, between 20% and 40% of the world’s gold supply passes through Dubai.

The Rise of the Souk

The intricate alleyways and traditional wooden structures of the Dubai Gold Souk have remained largely unchanged for over a century, with only minor updates made over time.

What has evolved, however, is its scale and influence. What began as a small market has expanded into a massive trading hub stretching over two kilometers in width and three kilometers in length.

Today, over 700 traders operate in the souk, with the majority situated in the Gold Souk or across the Creek in the Meena Bazaar. Many of these shops have been family-owned for generations.

When the Gold Souk first opened in the early 1900s, Dubai Creek was home to only a small number of local jewelers, trading goods along the spice route. The market began to grow in the 1940s when Iranian and Indian traders were encouraged to establish businesses due to new trade policies. However, it wasn’t until the discovery of oil in the 1970s that the real boom began.

The City of Gold

Jayant Javeri looks back on those exciting days with a deep sense of nostalgia.

Hailing from Mumbai, Jayant and his brother Anil arrived in Dubai in 1971, the same year the UAE was established. The Javeri brothers had grown up in the gold trade in Bahrain, where their grandfather founded a money exchange company that also sold gold bars, and their father played a key role. However, the brothers were eager to build their own legacy.

Their first business in Dubai was a general trading company, dabbling in gold transactions through orders from their grandfather.

In 1990, recognizing the growing demand for gold in the Gulf, the brothers founded Javeri Jewellery, which they proudly claim to be the first gold shop in Bur Dubai's Meena Bazaar. At the time, Meena Bazaar was a far cry from what it is today, with only the Javeri brothers and a handful of other buildings. Today, the area is home to numerous jewelry chains and family-run stores, offering slightly lower prices compared to the Gold Souk.

As word spread throughout India, thousands of others flocked to Dubai in the following years, eager to replicate the success of the pioneers. The 1990s marked the peak of the UAE's gold rush.

The bustling Meena Bazaar, filled with gold traders, diamond dealers, and jewelers, still looks much the same today, with dazzling displays that seem designed to captivate and overwhelm. You won’t find displays like these in Macy’s.

Dubai earned its reputation as 'The City of Gold,' known for being an affordable hotspot for purchasing gold and precious gems – a title it continues to hold today.

This reputation is largely due to low taxes (with only a 5% VAT introduced in 2018, which tourists can reclaim), fierce competition, government regulation, and the unique pricing structure. Unlike most places around the world, jewelry prices in Dubai are not fixed, but fluctuate with the daily international gold market rates. This means haggling is part of the shopping experience – even within stores.

Intense competition

Mihir Vaya and his family's journey to the UAE mirrors that of the Javeris. Mihir's grandfather founded a jewelry business in Gujarat, India, in the 1940s, crafting and selling his own pieces. His son, Ashwin, later took the reins.

Ashwin expanded the business, focusing on wholesale jewelry sales, and moved to Kuwait in search of fortune. When the Gulf War erupted in 1990, he relocated to Dubai.

“We were raised in the jewelry business. We’d watch Dad head to the souk for good deals, and we’d take the abra to Meena Bazaar. Back then, there weren’t any large traders,” Mihir recalls.

Mihir began working alongside his father full-time at the age of 21. Over the years, he has witnessed the transformation of the gold trade into its current state.

“The competition is fierce now, and the industry has shifted. In the past, everything was handmade. Today, designs are created on computers, and casting machines do the work. It’s less personal, more mass-produced.”

The modern gold trade is not without its controversies. The UAE imports gold from several countries that rely on artisanal and small-scale gold mining (ASGM). While ASGM provides vital income for rural communities, it is often poorly regulated and linked to unsafe working conditions.

The Key to Success

For most gold sellers in Dubai, the secret to long-term success lies in cultivating a dedicated customer base and fostering strong relationships over the years. Shoppers in Dubai are less likely to bargain hunt; their loyalty is unwavering.

Mehul Pethani is a prime example of this success.

You’ll often find Pethani at Cara Jewellers in the vast Gold and Diamond Park in Al Quoz, where he spends most days attending to loyal clients, as a steady line of customers patiently waits their turn.

The Pethani family name is well-known in this area. Mehul has three cousins and a brother-in-law working alongside him, with many others being friends he's known since childhood.

This connection is no accident. Founders Kiran and Anil Pethani sourced workers from their hometown in Gujarat to staff their first shop, which opened in 2005.

Mehul moved to Dubai in 2007, with little knowledge of English or the gold and diamond business, having grown up in a farming family.

Thirteen years later, he has become one of the most in-demand salespeople in Dubai. He claims that over 90% of his clientele are repeat customers.

“It’s all about being transparent and honest with customers,” he explains. “Whatever you’re selling, you need to be truthful so they know they’re getting value for their money.”

This means no bargaining, as Mehul’s regular customers have such trust in him that they’re confident they’re already receiving the best possible price.

In fact, it’s not unusual for customers to find themselves paying less than the quoted price for a piece of jewelry. This is the level of trust Mehul is referring to.

The sales team doesn’t work on commission, so Mehul dedicates six days a week and twelve hours a day (even on Fridays) to his work, driven purely by passion for the craft.

Major Players

While some of the pioneering jewelry businesses, like Javeri Jewellers, have stayed true to traditional methods, others have pushed for broader growth.

Brands like Cara, Damas, and Joyalukkas are now well-known globally. Firoz Merchant, the founder of Pure Gold Jewellers, has emerged as one of Dubai's most influential philanthropists, dedicating millions to helping free imprisoned expatriates. Meanwhile, Malabar Gold has surpassed Tiffany & Co. in annual revenue, with 215 locations worldwide.

For Jayant Javeri, competing with the industry giants is an uphill battle. Javeri’s prices are higher due to the fact that they don’t buy gold in large quantities. He often finds himself looking at his larger competitors and thinking, 'Their business model is more efficient than mine.'

However, the bigger players in the market believe there’s space for everyone to thrive.

Babu John, the founder of Sky Jewellery, hails from Kerala, India. He launched the first Sky Jewellery store in Dubai's Gold Souq in 1988. Now, he operates over 20 showrooms throughout the Gulf. In the Gold Souk, he owns three stores within just 200 meters of each other. Despite the challenges, business was booming before the pandemic hit.

Sanjay and Vinay Jethwani, the brothers behind Meena Jewellers, were on track for a major city-wide expansion of their store, which they took over from their father in 1993. But the plans have been put on hold for now.

After years of rapid growth, it was the Covid-19 pandemic that finally slowed the UAE's booming gold trade.

Looking ahead with hope for better days.

Mehul shares that the pandemic caused a 40% drop in his sales. Mihir and his family endured a tough six months, uncertain if they would ever be able to restart. The Javeri brothers saw a brief surge during Diwali, but by the end of the year, business had dwindled to almost nothing again.

Despite the hardships, Rajesh Popley, founder of Al Anwaar Jewellers, remains optimistic about the future and believes better days are ahead.

Rajesh Popley also grew up surrounded by the world of jewelry in Mumbai, where his father was a well-established wholesaler of gold and freshwater pearl jewelry. The family later moved to Dubai, and when Rajesh was just 16, his father entrusted him with overseeing the family store.

Rajesh recalls, 'My parents were not formally educated, but I excelled in my studies. Under my father’s mentorship, I sold a lot of gold and pearls.'

A lot has changed since those early days. Once lucrative margins have now narrowed, and the competition has intensified. The industry has become a 'completely different playing field,' according to Rajesh.

'There are so many players in the market, an overwhelming abundance of supply, and customers are spoiled with choices. But as a local brand, we offer more than just jewelry – we provide an emotional connection and experience that customers value,' he explains.

Rajesh takes pride in his unique offerings, including detailed pieces he calls 'art,' pigeon blood rubies, and Golconda diamonds. Yet, he acknowledges that many people aren’t keen on what they are unfamiliar with.

'I take pride in offering only the finest, but not everyone values that. In business, success comes from providing high-quality products at fair prices,' Rajesh says.

Today, Al Anwaar boasts locations in both Mumbai and Dubai, including a prestigious store in the iconic Dubai Mall.

Rajesh takes great pride in the company’s growth, though he wonders if such success could have been achieved anywhere else in the world.

'We’re well-known locally, having grown alongside their culture and earned their support. This region has truly been a blessing for us,' he reflects.