Saudi's Luxury Market Size Expected to reach $15billion by 2028

Saudi Arabia is on course to emerge as future luxury capital of the Middle East.

As Saudi Arabia has firmly established itself as a top destination for high-end shopping, it may not be long before the Kingdom emerges as a future luxury capital of the Middle East.

With the diversification of the economy, improvement of consumers’ lifestyle, as well as high per capita income, Saudi Arabia has seen increased spending on luxury products.

According to a report by the International Market Analysis Research and Consulting Group, the Saudi luxury market size reached $8.3 billion in 2022. Looking forward, IMARC Group expects the market to reach $15.8 billion by 2028, exhibiting a compound annual growth rate of 11.6 percent during 2023-2028.

Not surprisingly, global luxury brands like Gucci, Louis Vuitton and Chanel have opened flagship stores in the Kingdom while Prada, Tiffany and Mulberry have increased their presence by establishing mono-brand outlets.

The growing demand for luxury is apparently being driven by affluent groups, such as Gen Z, female consumers and wealthy tourists.

According to Euromonitor International’s data, the Kingdom was home to 117,000 millionaires in 2022, meaning a considerable number of ultra-high-net worth-individuals. This is alongside a large Gen Z population who support the sector, as luxury shoppers around the world are getting younger.

Saudi Arabia stands out as a youthful market overall, where the Gen Z population stood at 8 million in 2021, whilst almost half of the total population is below 29 years old.

Saudi Arabia’s retail sector witnessed a marked increase in retail space and a robust recovery in domestic demand during the first half of the last year.

To ramp up its growth, Saudi Arabia also has designed ambitious retail projects as part of the Saudi Arabia Vision 2030 that serves to reinvigorate the economy, diversifying beyond the real estate and infrastructure sectors.

?As the JLL’s latest Global Real Estate Transparency Index demonstrates, Saudi Arabia maintained its position in the top 50 global rankings, while also boosting its position at a regional level.?

Currently, Riyadh houses 3.3 million square metres of retail area, followed by Jeddah, which jumped from 16,000 to 1.7 million square metres and Makkah, which grew from 17,500 to 1.4 million square metres in the part of the last year.

(M.E Retail News/Arab News 2023)