Saudi Arabia is on its way to becoming a leading hub for luxury shopping in the Middle East, as it attracts global brands and affluent consumers.
The Kingdom’s economic diversification, lifestyle enhancement and high income levels have boosted the spending on high-end products.
A report by EMR estimates that the Saudi luxury market reached a value of about US$17.97 billion in 2022. The market is further expected to increase at a CAGR of 7% between 2023 and 2028 to reach a value of approximately US$27.02 billion by 2028.
According to the report, Saudi Arabia is among the wealthiest and fastest-growing Arab nations in the world. Due to steady economic growth as well as high per capita income, the country has seen increased spending on luxury products and services like fragrances, automobiles, watches, leather goods, hotels, etc. In addition, the Kingdom is investing in economic diversification and has established retail as a key growth channel. This promotes the growth of the retail sector by promoting public spending in retail infrastructure projects. In addition, the thriving tourism industry has also created enormous opportunities for both the luxury hospitality and retail sectors.
The Government of Saudi Arabia recently announced its plan to build four economic cities to foster internal trade, attract foreign direct investment (FDI), as well as diversify into non-oil industries, which, in return, boost the Saudi Arabia luxury market growth of luxury goods in the country.
In addition, major luxury brands, such as Prada, Tiffany, and Mulberry, are growing their presence in Saudi Arabia by opening up single-brand stores and responding to regional demand and trends. They are now launching secondary product lines, appealing to middle and upper-middle classes who aspire to their own affordable luxury. In addition, the establishment of state-of-the-art malls also provides these brands with sufficient space to broaden their operations in the region.
Furthermore, the power of social media, together with the rise of online shopping, has had a positive effect on the luxury industry in Saudi Arabia as shoppers can now access luxury brands even through online platforms.
(Image top of page – Unsplash – Horlogy Hands)
