Saudi Arabia Luxury Market Influenced by Rapid Digital Transformation

According to IMARC Group, the Saudi Arabia luxury market size reached US$ 14.5 Billion in 2018. Luxury goods, also known as superior goods, refers to a class of high-quality non-essential products. They are more expensive as compared to necessity goods and are generally bought by individuals with a high disposable income. Fine wines, perfumes, beauty products, jewelry, watches and apparel are common examples of luxury goods. At present, Saudi Arabia is the most prosperous Arab country and one of the fastest-growing economies in the world. With its vast oil wealth, the country has witnessed increased consumer spending and a growing desire for lavish lifestyles among consumers. It is the country’s young population with one of the highest per capita incomes across the globe, which represents the biggest catalyst for the growth of the luxury market.

Over the years, the sustained economic growth and inflating incomes of individuals in Saudi Arabia have changed their way of living and shifted their interest toward luxury goods. Consumers now prefer spending on luxury products and services such as fragrances, cars, watches, accessories and hotels. Owing to this, global luxury brands have increased their presence in Saudi Arabia by establishing mono-brand stores as well as adapting to regional demands and trends. Apart from this, the Kingdom is investing in economic diversification and has identified retail as a primary channel for growth. It is supporting the expansion of the retail industry by promoting public investments in retail infrastructure projects. As a result, the establishment of upscale malls has provided these brands ample space to expand their operations in the country. Moreover, the rising internet penetration and the growing influence of social media has led to the emergence of the online shopping trend. This has positively impacted the sales of luxury products as shoppers can now access global brands through online platforms. Looking forward, the market is further projected to reach a value of US$ 22.2 Billion by 2024, exhibiting a CAGR of 7.2% during 2019-2024.

Travel and hotels represent the most popular category

Travel and hotels currently dominate the market, accounting for the majority of the total market share. With an increasing number of tourists in Saudi Arabia, the government is heavily investing in the construction of luxury hotels in the Kingdom. Travel and hotels are followed by cars, personal luxury goods, food and drinks, and others.

Males exhibit a clear dominance in the market

On the basis of gender, the market has been segmented into males and females. Males currently account for the largest share in the market, on account of their higher population and purchasing power.

Market breakup by distribution channel

On the basis of the distribution channel, the market has been segregated into mono-brand stores, multi-brand stores, online stores and others. Mono-brand stores offer products of a single brand. The Prada and Mercedes outlets are an example of mono-brand stores. Multi-brand stores provide products from various other brands, whereas online stores sell goods and services on the online platforms. SOUQ, an English-Arabic language e-commerce platform, owned by Amazon, is an example of online stores in Saudi Arabia.

Similar Report by IMARC Group:

GCC Luxury Market: Industry Trends, Share, Size, Growth, Opportunity and Forecast 2019-2024

About IMARC Group: IMARC Group is a leading market research and consulting company that offers management strategy and market research worldwide. The company has done multiple projects on the Saudi Arabia luxury market, which has enabled the clients to set up and expand their businesses successfully. Some of the company’s offerings include:

• Market Research
• Plant setup
• Plant Expansion
• Marketing and sales
• Procurement and Distribution
• Innovation and Product Development

Imarc Group is a leading market research and consulting company that offers management strategy and market research worldwide.