Sales of luxury watches have continued to grow rapidly this year across the Emirates as Chinese tourists flock to the country's malls in search of internationally recognised brands. Ahmed Seddiqi and Sons, one of the Middle East's largest watch companies, has seen double-digit growth in the first five months of this year over the same period last year and aims to expand across the country in response to demand. The chief executive said that after the financial crisis people are going back to the reassuring brands and ones that are well known. Ahmed Seddiqi has 50 stores across the United Arab Emirates, representing brands such as Rolex, Patek Philippe, AudemarsPiguet and Tag Heuer. About 152000 visitors from China stayed in Dubai hotels last year. The Dubai Department of Tourism and Commerce Marketing said the figure for this year is expected to be at least 50 per cent greater. According of the Swiss Watch Industry, sales of Swiss watches in the UAE to a report released last week by the Federation were 81 per cent higher in the first quarter than in the same period two years before.

• Discuss how an increase in demand might affect retailers and producers of luxury watches.(10 marks)(Needs two paragraphs - possibly one on impact on producers and one on impact on retailers, or a chain of impact through retailers to producers, or argue a positive impact and a negative impact)