Saudi Arabia Luxury Market

Saudi Arabia Luxury Market:

The Saudi Arabia luxury market size reached USD 10.1 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 23.3 Billion by 2033, exhibiting a growth rate (CAGR) of 9.7% during 2025-2033. The rising e-commerce industry, along with the development of upscale malls, is primarily stimulating the market across the country.

Saudi Arabia Luxury Market Analysis:

• Major Market Drivers: The launch of policies by government bodies across the country that aim to promote foreign direct investments(FDI) and diversify their economy beyond oil-dependent sectors is bolstering the market.
• Key Market Trends: The increasing number of exclusive stores that cater to the demands and preferences of customers is positively influencing the market. Moreover, key players in the country are launching secondary product lines that are customized according to the upper-middle and middle class individuals seeking luxury.
• Challenges and Opportunities: One of the primary challenges hindering the market is navigating the balance between modernizing and maintaining cultural compliance. However, continuous collaborations among local partners to align with local cultural expectations are expected to fuel the market in the coming years.

Saudi Arabia Luxury Market Trends:

Rising Affluent Population

The increasing wealth among individuals across the country is contributing to the market. The report published by the Statista Research Department in January 2024 illustrated the number of high-net-worth individuals in Saudi Arabia in 2022, broken down by wealth range group. That year, there were approximately 26 people in Saudi Arabia whose wealth exceeded US$500 Million. Moreover, according to Henley & Partners' BRICS Wealth Report, the country presently holds the sixth position within the bloc in terms of high-net-worth individuals. Besides this, as per a report by Credit Suisse, Saudi Arabia emerged as the nation with the highest number of millionaires in the Middle East and North Africa region, ranked 23rd internationally in 2022. Additionally, the growing population of ultra-high-net-worth individuals (UHNWIs) is also stimulating the market. Knight Frank's Wealth Report 2021 stated that Saudi Arabia's ultra-high-net-worth individuals are projected to elevate by 20%, accounting for roughly 8,416 between 2020 and 2025. This, in turn, is escalating Saudi Arabia's luxury market demand. According to the IMARC, the luxury goods market size across the country is projected to exhibit a growth rate (CAGR) of 6.16% during 2024-2032. Furthermore, major cities, including Jeddah and Riyadh, are witnessing urban development projects, thereby leading to higher concentrations of affluent consumers. In December 2023, Naver and the Riyadh-based iot squared entered into a non-binding agreement to jointly build a digital twin platform in Saudi Arabia.

Growing Luxury Tourism

The development of upscale malls has provided lucrative opportunities for prominent brands to expand their operations, which is acting as a significant growth-inducing factor. For instance, in September 2023, Charlotte Tilbury planned to open two stores in Riyadh. Similarly, in November 2023, Chalhoub Group introduced 'The Visitor', a travel retail concept brand, with its first location at King Abdulaziz International Airport in Jeddah, Saudi Arabia. With an innovative retail space that merges luxury and travel, the concept aimed to deliver a unique shopping experience for passengers who pass through the airport each year. Additionally, it showcased over 200 luxury brands spanning beauty, fragrances, fashion, jewelry, eyewear, and electronics, including premium brands, such as Dior, Gucci, Jo Malone, La Mer, Carolina Herrera, Swarovski, etc. Apart from this, the rising demand for exclusive and luxurious properties in the hospitality sector is positively influencing Saudi Arabia's luxury market outlook. In November 2023, Diriyah Company, one of the projects of the Saudi Public Investment Fund, announced the introduction of a luxury branded residence project in Riyadh. Furthermore, in November 2023, IHG Hotels & Resorts launched its premium hotel brand, voco, in Makkah as part of its expansion strategy in Saudi Arabia. In April 2024, Marriott International, Inc. signed a deal with NEOM to unveil its second luxury hotel, the Ritz-Carlton Reserve, in Saudi Arabia. Apart from this, numerous improvements in the travel and tourism industry will continue to fuel the market in the coming years. For example, in May 2024, one of the hospitality groups in Saudi Arabia, Accor, introduced Accor One Living, offering a diverse range of accommodation options across 13 properties.

Expanding E-Commerce Industry

The inflating purchases of luxury products via e-commerce platforms, as they offer convenience and accessibility to customers, especially in remote areas with limited access to physical retail outlets, is propelling the market across the country. For example, in December 2023, a women-led ethical luxury brand, Abadia, expanded its reach via the renowned luxury online marketplace called Net-A-Porter, thereby becoming the first brand in Saudi Arabia on the e-commerce platform. Additionally, in May 2024, FeatureMind, one of the providers of digital retail solutions, expanded the e-commerce expansion for its international luxury jewelry and watchmaking brand, Mouawad, in Saudi Arabia. Apart from this, changing consumer behavior, particularly among the younger generation, has led to the increasing acceptance of online luxury shopping attracted by the wider range of products available on e-commerce platforms. For instance, in June 2023, Hermès introduced its first flagship digital store in Saudi Arabia, providing Saudi shoppers with a more tailored experience with regard to the page content, collections, and overall narrative. Furthermore, the emergence of various dedicated luxury platforms in the country that offer curated collections from high-end brands is expected to augment the market over the foreseeable future. For example, in May 2024, L'azurde, one of the luxury jewelry brands with a wide presence in Saudi Arabia, announced its availability on the BigCommerce platform.

Saudi Arabia Luxury Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with the Saudi Arabia luxury market forecast at the country level for the period 2025-2033. Our report has categorized the market based on the distribution channel, category, and gender.

Breakup by Distribution Channel:

• Mono-brand Stores
• Multi-brand Stores
• Online Stores
• Others

Mono-brand stores represent the most popular distribution channel

The report has provided a detailed breakup and analysis of the market based on the distribution channel. This includes mono-brand stores, multi-brand stores, online stores, and others. According to the report, mono-brand stores represented the largest market segmentation.

Mono-brand stores in Saudi Arabia represent retail outlets dedicated to a single luxury brand, offering an exclusive and immersive shopping experience that showcases the brand's full range of products, from apparel and accessories to perfumes and home décor. These stores are strategically located in high-end shopping districts and luxury malls, reflecting the brand's prestige and attracting affluent consumers seeking personalized services and unique products. By maintaining a consistent brand identity and ambiance, mono-brand stores enable luxury brands to establish a strong presence in the market. For instance, in April 2024, VF Corp., the parent company of Timberland, Dickies, Smartwool, Jansport, Vans, and other active lifestyle brands, engaged with retail conglomerate GMG to expand its retail network via mono-brand stores, focused primarily on the Kingdom of Saudi Arabia (KSA). The rise of such stores is also driven by the increasing demand for authenticity and exclusivity, aligning with the country's Vision 2030 goals to enhance the retail landscape.

Breakup by Category:

• Travel and Hotel
• Cars
• Personal Luxury Goods
• Food and Drinks
• Others

Cars hold the largest share in the market

The report has provided a detailed breakup and analysis of the market based on the category. This includes travel and hotel, cars, personal luxury goods, food and drinks, and others. According to the report, cars represented the largest market segmentation.

The country's affluent population, the expanding urbanization, and the growing demand for high-end automotive experiences are augmenting the adoption of luxurious cars. Moreover, brands, such as Mercedes-Benz, BMW, Rolls-Royce, and Lamborghini are particularly popular, with showrooms strategically placed in major cities like Riyadh and Jeddah to cater to the elite clientele. In March 2024, Wallan Trading Company signed a strategic agreement with Lotus, providing Saudi consumers seamless access to the brand's diverse range of luxury vehicles. Additionally, the increasing number of female drivers following recent social reforms has expanded Saudi Arabia's luxury market share.

Breakup by Gender:

• Male
• Female

The report has provided a detailed breakup and analysis of the market based on the gender. This includes male and female. According to the report, female represented the largest market segmentation.

Luxury for females is driven by a strong cultural emphasis on beauty and personal care. Brands like Estée Lauder and Huda Beauty are particularly popular among them. For instance, a study published by Chalhoub Group in May 2024 revealed that female shoppers drive most beauty categories with an average spend that is 55% higher than men. The fragrance is an exception, where men tend to shop 20% more frequently and spend 11% more. Moreover, the Future Laboratory and Together Group collaborated on a study, which explores how Saudi Arabia is becoming a hub of cultural refinement for luxury enthusiasts, particularly on the evolving role of women within this rapidly developing market. Titled "New Codes of Luxury in Saudi Arabia," the comprehensive study, unveiled in February 2024, illustrated the number of females working in Saudi Arabia and how this is contributing to changing the way people think about luxury spending. As highlighted within the report, approximately 88% of individuals in the country advocate for luxury brands to actively promote women's empowerment through their programs and operational principles.

Competitive Landscape:

• The market research report has also provided a comprehensive analysis of the competitive landscape in the market. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.
• At present, Saudi Arabia's luxury market top brands are implementing various strategies to capitalize on the growing demand for luxury goods and services in the country. They are investing in establishing a stronger presence by opening flagship stores, boutiques, and luxury retail outlets in prominent cities such as Riyadh, Jeddah, and Dammam. Moreover, companies are customizing their products and marketing strategies to cater to Saudi Arabia's unique cultural preferences and values and incorporating local elements, designs, and themes in their offerings to resonate with the Saudi consumer. Besides this, companies are embracing the e-commerce trend and establishing a robust online presence. They are creating dedicated luxury platforms, partnering with leading e-commerce players, and enhancing their websites to offer a seamless digital shopping experience. Furthermore, key players are focusing on providing exceptional customer service and personalized attention to create a memorable and immersive shopping experience.

Saudi Arabia Luxury Market Recent Developments:

• May 2024: L'azurde, one of the luxury jewelry brands with a wide presence in Saudi Arabia, announced its availability on the BigCommerce platform.
• May 2024: FeatureMind, one of the providers of digital retail solutions, expanded the e-commerce expansion for its international luxury jewelry and watchmaking brand, Mouawad, in Saudi Arabia.
• March 2024: Wallan Trading Company signed a strategic agreement with Lotus, providing Saudi consumers seamless access to the brand's diverse range of luxury vehicles.

Saudi Arabia Luxury Market Report:

Key Benefits for Stakeholders:

• IMARC's report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Saudi Arabia luxury market from 2019-2033.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the Saudi Arabia luxury market.
• Porter's five forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Saudi Arabia luxury industry and its attractiveness.
• The competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.