Retail sector sales in Oman are forecast to increase by more than six per cent annually during the next five years, mostly spurred on by booming tourism, a rise in per capita income and a growing population, according to the latest report advisory firm Alpen Capital.
The study projects that the highly dynamic GCC retail industry should register a 15.7 per cent year-on-year growth, hitting revenue of $296.8 billion. At the same time, GCC retail industry sales are predicted to grow at a compound annual growth rate of 5.7 per cent between this year and 2026 to reach $370 billion.
Alpen Capital said: “Bahrain (7.3 per cent compound annual growth rate), Saudi Arabia (6.5 per cent compound annual growth rate) and Oman (6.1 per cent compound annual growth rate) is expected to grow above the GCC average of 5.7 per cent compound annual growth rate during 2022-2026 period. Growth in the smaller countries such as Bahrain and Oman is expected to primarily be driven by an increase in tourism activity, rise in GDP per capita and penetration of organised retail stores.”
The report noted that while the current retail landscape in Oman is dominated by standalone units, the popularity of organised retail concepts (malls and shopping centres) is gaining steam, the report noted.
“This is primarily driven by growing interest among consumers, especially the affluent class and millennials, in new lifestyle experiences and increasing demand for space from both global and regional brands who look to further establish their presence and broaden their portfolio to gain market share,” said the Alpen Capital report.
A growing population base, coupled with swift urbanisation and a high GDP per capita of $29,444 has been instrumental in the resurgence of the organised retail market in Oman.
Wholesale and retail trade in Oman has seen a 6.1 per cent year-on-year increase at the beginning of this year, reaching RO2.63 billion, compared to RO2.26 billion recorded for the same period last year, the National Centre for Statistics and Information data reveals.
Alpen Capital ascribed the rapid expansion of the retail space in the last few years to major developers who flock to Oman to set up shops, namely from pan-GCC retailers and big malls.
“Apart from Muscat, many new projects are springing up in other cities such as Sohar and Nizwa supported by the government’s efforts in moving towards the expansion of the retail sector,” the report noted.
Oman e-commerce surge
In addition, Alpen Capital has predicted a more than 20 per cent average annual growth in Oman’s e-commerce sector for the next five years.
Oman’s retail industry is transforming due to heightened consumer awareness, aggressive competition and an increase in e-commerce penetration which prompts more and more retailers to switch to the omnichannel mode to flourish in the market.
“Although there is limited e-commerce activity in Oman’s private sector, the market is estimated to grow by an average of more than 20 per cent annually between 2022 and 2026 given that the government is actively promoting digitisation and e-government services through the Information Technology Authority,” Alpen Capital said.
As part of Oman’s Vision 2040, the government is actively encouraging investment flows into the retail sector among others. These initiatives further strengthened the retail sector within the GCC markets, the report said.
With the borders reopening and travel restrictions easing, business confidence in the GCC region is rebounding.
“GCC is fast becoming a global centre for business, entertainment and sporting events. Moreover, the rising population, with a high concentration of expatriates and high net-worth individuals, remains one of the primary factors for driving growth of the GCC retail industry,” said Alpen Capital.
