Saudi Arabia’s luxury goods retail market is estimated to be worth $14.24 billion in 2027, according to the Saudi Arabia Luxury Market: Industry Trends, Share, Size, Growth, Opportunity and Forecast 2022-2027 report by the International Market Analysis Research and Consulting group.
The report forecasts a compound annual growth rate of 11.72 per cent over the next five years.
Saudi Arabia’s attention to its economic diversification has placed focus on inviting public investors to expand its retail sector, which will drive the growth of the luxury goods market, says the report.
Last year, the market was valued at $7.41 billion as the kingdom saw increased spending on luxury products such as fragrances, cars, watches and leather items.
The report attributes increased spending to a rise in tourism and visitors’ exploration of the kingdom’s luxury retail sector, and the younger population having greater disposable income.
To keep pace with the increase in regional demand for luxury products, high-end brands, including Tiffany & Co., Mulberry and Prada, have begun increasing their retail footprint in Saudi Arabia, opening mono-brand stores.
The report’s findings are echoed by the GCC Personal Luxury in 2021: A Story of Early Recovery and Growth report by the Chalhoub Group and Saudi Arabian Ministry of Culture’s Fashion Commission.
By the end of next year, the luxury goods market is projected to reach $11 billion, with a seven per cent compound annual growth rate in the interim.
Travel restrictions and brands widening their product ranges in the region drove Middle East consumers to do 60 per cent of their luxury goods shopping regionally and just 40 per cent abroad.
