Saudi Arabia is cutting its cloth to become the next kingdom of fashion

Special Saudi Arabia is cutting its cloth to become the next kingdom of fashion
Under the Fashion Commission, which was one of 11 such bodies established in 2020 by the Ministry of Culture, a plethora of initiatives to further grow the sector both publicly and privately are being implemented. (Saudi Style Council photo)
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Updated 17 September 2023
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Saudi Arabia is cutting its cloth to become the next kingdom of fashion

Saudi Arabia is cutting its cloth to become the next kingdom of fashion
  • Saudi Arabia’s market for fashion is on the rise, thanks to both public and private players

RIYADH: Until recently, the Saudi capital of Riyadh was hardly ever looked upon as a hotspot on the global fashion circuit. New York, Milan and Paris — these are the mainstays for fashion weeks, the cities where established and aspiring designers, buyers, and journalists have long gathered.

But times are changing, and Gulf countries are quickly becoming new hubs for the industry, particularly Saudi Arabia, where retail demand for fashion products has been forecast to increase by 48 percent to $32 billion in 2025, with the luxury field set to enjoy a 19 percent growth.

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Times are changing, and Gulf countries are quickly becoming new hubs for the industry, particularly Saudi Arabia, where retail demand for fashion products has been forecast to increase by 48 percent to $32 billion in 2025, with the luxury field set to enjoy a 19 percent growth.

With the first ever Riyadh Fashion Week underway from Oct. 20 to 23, Saudi designers will come into the spotlight on the catwalk in the capital of their own country. It is one of several of the Fashion Commission’s recent initiatives, following the launch of the ‘Saudi 100 Brands’ exhibition during Paris Fashion Week in June.
“Fashion retail has always been an attractive sector, specifically for women in Saudi,” Marriam Mossalli, a Saudi lifestyle editor, journalist and founder of communications agency Niche Arabia, told Arab News. “From sourcing fabric to working with local tailors; to selling within their immediate community; the profession has fit comfortably within our local ecosystem.”

She added: “Today, however, the appeal is global. With social media and e-commerce, the potential for many designers has grown exponentially as it’s not limited to their local market.”
The attention being paid to the industry signals the government’s belief in the sector’s potential for economic growth.
This shift has not happened by chance. The fashion industry has been identified as a key avenue for economic diversification for Saudi Arabia and is one of the non-hydrocarbon sectors rapidly on the rise.
Under the Fashion Commission, which was one of 11 such bodies established in 2020 by the Ministry of Culture, a plethora of initiatives to further grow the sector both publicly and privately are being implemented.
The commission’s March 2023 report “The State of Fashion in the Kingdom of Saudi Arabia 2023” provides an analysis of the Kingdom’s fashion value chain.
It revealed Saudi Arabia’s plan to reduce reliance on overseas imports and put the country on the map by using homegrown talent. It also highlights the sector’s potential for growth.
In the report, Saudi Fashion Commission CEO Burak Cakmak said: “We are building the foundations for the future of fashion right now, here in Saudi Arabia.”
With retail demand for fashion products projected to increase by 48 percent to $32 billion by 2025, the Saudi fashion industry is positioned for significant expansion.
In 2021, Saudi Arabia’s fashion industry spent $7.3 billion on imported goods, showcasing the potential economic impact of fostering domestic capabilwities.

The report showcases the sector’s rapid development, its strategic alignment with the nation’s Vision 2030, and how the Kingdom’s youth are putting the country on the global fashion stage through new designs and product launches.
It states how the fashion ecosystem is estimated to contribute to 1.8 percent of the total Saudi workforce, employing 230 000 people. The industry has a 52 percent female participation in the Saudi fashion workforce and 66 percent Saudization within core fashion jobs. This workforce is made up of 90,000 core fashion occupations and 140,000 related roles.
Moreover, domestic retail sales in the Kingdom are forecasted to reach $32 billion in 2025, a 30 percent growth from 2021’s total of $24 billion. Luxury fashion is a significant driver of growth, with the market growing by 19 percent in 2021 due to repatriation of spending given travel restrictions, increased female empowerment and the continued rise of e-commerce.
The market for fashion in the Kingdom is also growing due to external players and their eagerness and readiness to do business in Saudi Arabia.
These include the major luxury and fashion retail powerhouse Dubai-based Chalhoub Group, which has increasingly been doing business in the Kingdom.
Jasmina Banda, chief strategy officer at Chalhoub Group, says the business has been operating in the Kingdom for over 30 years, and currently operates over 250 stores spread across the Kingdom.
It also has over 4,000 team members, six warehouses, and is currently building a state-of-the-art fulfillment facility in Riyadh. It has dedicated offices across the Kingdom, including retail academies.
“For Chalhoub, the Kingdom remains our second-largest market,” Banda told Arab News. “In the luxury space, Saudi Arabia is overall the second-largest market, even though that varies by category.
“For example, in prestige beauty, Saudi is a strong number two, competing with the UAE, while in high-end fashion it comes in at No. 4, after the UAE, Kuwait, and Qatar, as it is a category extensively bought abroad.”
She added: “Over the last few years the Saudi fashion market has seen a strong growth, especially during the COVID-19 years when the borders were closed.
“Since reopening, we continue seeing increased offshoring of luxury spend abroad and we expect major transformations in our retail categories to happen in the coming years, as new shopping malls open — currently there are more than five luxury destinations in different stages of construction in the Kingdom.”

Saudi women have long been known as big buyers of luxury fashion, Banda said, adding that people in the Kingdom are known for following trends on social media and being well-traveled.
“That is further shifting with the socio-demographic changes in Saudi Arabia, stemming from female empowerment and increasing workforce participation, as well as changes in the habits driven by entertainment options – cinemas, restaurants, concerts, etc.,” she said.
Banda also explained how when it came to marketing to Saudi consumers, buying and merchandising are tailored to the consumer preferences in terms of silhouette, color palette and sizing.
“Especially important seasons, such as Ramadan, are addressed through dedicated capsule collections, and specific marketing campaigns and activations. It is important to be bring to the customer global brands, in a tailored ‘glocal’ way,” she said.
All of Chalhoub’s largest luxury fashion brands are already present in Saudi Arabia.
Banda notes how in the luxury sector, Saudi Arabia represents 9 percent of the global market, due to the offshoring of spend. Saudis are often the top nationality shopping in Dubai, and increasingly in Qatar. In prestige beauty, however, Saudi Arabia represents one third of the Gulf Cooperation Council market.
“On the other hand, for some of the leading watches and jewelry brands, Saudi Arabia is the No. 1 market in the region by size. Maturity really varies by category,” she said, adding: “However, Saudi consumers are also frequent clients of top luxury brands in Europe, previously in the UK and France, and now predominantly in France — since the UK stopped tax free.”
Saudi spending on fashion will likely grow “exponentially,” she emphasizes, “once the country fully delivers on its tourism ambitions.”
The Fashion Commission’s report states how major opportunities for economic growth now lie within the sector’s nascent domestic fashion industry.
Rajaa Moumena, who sits on the board of the fashion association that works directly with the commission, believes the local industry is still in the early stage of development.

She said: “It is currently at the phase of awareness and setting up the appropriate legislation to create an enabling environment for entrepreneurs to start their businesses.
“This involves addressing various aspects such as licensing, permits, and regulations that govern the industry.”
One of the primary focuses, stresses Moumena, of Vision 2030 is to promote local production and reduce reliance on imports. This includes the production of all types of clothing, ranging from ready-to-wear garments to high-end haute couture. By encouraging local production, Saudi Arabia aims to create job opportunities, boost economic growth, and retain revenue within the country.
She emphasized that education is key for the domestic sector to grow.
“As the industry evolves and adopts new concepts, it is essential for educational institutions to keep pace with these changes. This means updating curricula, offering specialized courses, and providing students with practical skills required for the fashion industry. This will help opening doors to many jobs where skillful people are needed in the industry,” said Moumena.
By encouraging the Saudi youth to be creative and business savvy, Riyadh may soon be a permanent fixture on the global fashion calendar.


Saudi Aramco completes acquisition of 100% equity stake in Chile’s Esmax

Saudi Aramco completes acquisition of 100% equity stake in Chile’s Esmax
Updated 44 min 25 sec ago
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Saudi Aramco completes acquisition of 100% equity stake in Chile’s Esmax

Saudi Aramco completes acquisition of 100% equity stake in Chile’s Esmax
  • Transaction, first announced in September 2023, represents Aramco’s first downstream retail investment in South America

LONDON: Saudi Aramco successfully completed the acquisition of a 100 percent equity stake in Chile’s Esmax Distribucion, a leading diversified downstream fuels and lubricants retailer, it was announced on Friday.

Esmax has a national presence that includes retail fuel stations, airport operations, fuel distribution terminals and a lubricant blending plant. 

The transaction, which was first announced in September 2023, represented Aramco’s first downstream retail investment in South America, illustrating the attractiveness of this market, and supports the Saudi company’s strategic goal to strengthen its downstream value chain.  

“We are delighted to conclude the acquisition of Esmax and look forward to working with the outstanding team on the ground in Chile to achieve our shared ambitions,” Yasser Mufti, Aramco executive vice president of products & customers, said.

“Aramco aims to be a primary global retail player and this deal combines our high quality products and services, including Valvoline lubricants, with the experience and quality of an established operator in Chile.” 


Germany’s WIKA opens new plant in Dammam

Germany’s WIKA opens new plant in Dammam
Updated 01 March 2024
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Germany’s WIKA opens new plant in Dammam

Germany’s WIKA opens new plant in Dammam

DAMMAM: The vast industrial city, known as MODON, situated in the industrial patch of land lined by warehouses and factories in Dammam has a new factory in town. 

The well-established German WIKA group inaugurated their newest plant on Feb. 29, with the local state-of-the-art production facilities meant to streamline every step of their journey forward.

“This is a symbol of our bilateral relationship which consists of a myriad of business, economic, cultural and political relations,” German Ambassador to the Kingdom Michael Kindsgrab said to the crowd.

Kindsgrab, who flew in for the occasion, pointed out how this new plant served as an example of the ample opportunities recently made available to German companies in the Kingdom and would help to further deepen the close relationship between Germany and Saudi Arabia. 

He cited this as his first visit to the Eastern Province and seemed to immensely delight in the cultural offerings on stage when local performers welcomed him — and WIKA — in traditional folk song and dance in between the various speeches.

The launch also brought together Germans and Saudis, as well as the diverse staff at WIKA.

“On behalf of Saudi Aramco, I would like to extend my warm thanks, appreciation and congratulations to WIKA for inaugurating WIKA Saudi Arabia,”  Fawaz Al-Sahan, manager of process automation system division at Saudi Aramco said, adding: “Today I’m honored to celebrate this success with you because we believe that localization has great benefits to both of our companies.

“In terms of scope, I believe that this is the largest instrumentation facility in the Kingdom. I trust this facility will serve as a WIKA hub for the Middle East.”

Alexander Wiegand, chairman and CEO of WIKA, also spoke to the crowd and offered his heartfelt gratitude to those who helped his family-owned company excel over the decades. He lovingly recalled the days when his mother was in charge and how this new facility in Dammam would be an extension of the WIKA family that is celebrating 78 years of operation in 2024.

“WIKA’s expansion in Saudi Arabia will create more than 100 new jobs over the next few years, it thus makes an important contribution to the local job market. In the new plant, German top technology is implemented by a qualified team with in-depth knowledge of the local market. This ensures that customers are supplied with high-quality instrumentation solutions tailored to their specific needs,” Wiegand said.

The factory covers a total area of 3,000 sq. m. Supplied

The new factory, with the logo colors of orange and blue, aims to enable WIKA to serve customers in Saudi Arabia, and the region at large, even more extensively. 

In the future, products for measuring pressure, temperature, level and flow will be manufactured locally on a total area of 3,000 sq. m. This would include diaphragm seals, instrumentation valves and thermometer thermowells for connecting measuring instruments to critical processes. The range of these services will be further expanded.

WIKA, as it was noted at the ceremony, sees itself as a partner in Saudi Arabia’s economic development, especially in the area of expanding economic sectors alongside oil and gas and diversifying beyond it. The group of companies has been present with sales subsidiaries in the Kingdom for over 20 years with about 12,000 employees worldwide, and counting.

In keeping with the Saudi Vision 2030 and the Saudi Made initiative, the launch also had its eye to the future.

“We are not thinking in quarters, we are thinking in decades,” Wiegand concluded.


Arab finance ministers discuss multilateralism, economic development at G20 meeting in Brazil

Arab finance ministers discuss multilateralism, economic development at G20 meeting in Brazil
Updated 01 March 2024
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Arab finance ministers discuss multilateralism, economic development at G20 meeting in Brazil

Arab finance ministers discuss multilateralism, economic development at G20 meeting in Brazil
  • Egypt, UAE attended as guests alongside Saudi Arabia, the only Arab G20 member
  • Saudi minister: Fair trade practices must be promoted ‘to enhance economic opportunities for developing countries’

SAO PAULO: The meeting of G20 finance ministers and central bank governors that took place in Brazil on Feb. 28-29 could not be concluded with a joint statement as there was no consensus over the conflicts in Ukraine and Gaza.

But many of the leaders who attended shared similar concerns regarding the topics suggested as priorities by Brazil, which is the current president of the forum, especially reducing inequality and building multilateral cooperation to address the most pressing global issues such as sustainable development and financial stability.

Three Arab nations took part in the meeting. Besides Saudi Arabia, which is the only Arab member of the G20, Egypt and the UAE attended as guests. They manifested concurrent views regarding the central themes of the forum.

Finance Minister Mohammed Al-Jadaan, who headed the Saudi delegation along with Saudi Central Bank Gov. Ayman Al-Sayari, affirmed during one of the event’s sessions that “addressing debt vulnerabilities in low-income countries cannot happen without multilateral cooperation from all stakeholders, including creditors, debtors, international financial institutions, and the private sector,” the ministry’s media center reported.

Al-Jadaan added that fair trade practices must be promoted “in order to enhance economic opportunities for developing countries.”

Regarding low-income nations’ debt, he said implementation of the G20 Common Framework, an initiative launched a few years ago to support poor countries with unsustainable debt, must go on.

Mohamed Hadi Al-Hussaini, the UAE’s minister for financial affairs, expressed his country’s commitment to reducing inequalities through financial inclusion, Emirates News Agency reported.

He cited the Financial Infrastructure Transformation Programme, launched in 2023 with the goal of speeding up the digital transition in the financial sector.

The initiative shares the same principles as the G20-supported Global Partnership for Financial Inclusion.

Al-Hussaini said innovative instruments may have a relevant role in promoting development, mentioning green bonds and sukuk, a Shariah-compliant bond used in Islamic finance.

He also addressed the UAE’s efforts regarding energy transition and combating climate change.

The Emirati government has been helping vulnerable nations enhance their climate resilience. The UAE pledged $200 million to the Resilience Sustainability Trust in December 2023.

Al-Hussaini said the UAE decided to prioritize multilateral cooperation during the 13th World Trade Organization Ministerial Conference, which was held in Abu Dhabi on Feb. 26-29 and discussed new models for global trade.

Egyptian Finance Minister Mohamed Maait emphasized in his speech that developing nations have been impacted by challenging situations in recent months, something that affects their budgets and their ability to meet their citizens’ needs amid growing inflation crises, Ahram Online reported.

He said international cooperation is fundamental to support countries that are struggling to maintain their efforts for social protection.

He added that Egypt gained great experience in relief programs in recent years. During the COVID-19 pandemic, the country increased its support programs in order to assist vulnerable social segments at a time of economic hardship and high inflation. Any reform needs social programs if the goal is to obtain success, he stressed.

Al-Jadaan had bilateral meetings with Maait, Ilan Goldfajn, who heads the Inter American Development Bank, the French delegation and US Treasury Secretary Janet Yellen. Al-Sayari met with his Turkish counterpart.

According to a statement released by the US Treasury Department, Al-Jadaan and Yellen discussed the Saudi economy, “the progress of its reform program” and the need to “work together effectively in both bilateral and multilateral settings.”

Al-Hussaini met with the finance ministers of South Africa and Germany, as well as the executive president of the Development Bank of Latin America and the Caribbean.


Oil Updates – crude rises, markets await OPEC+ decision amid mixed demand drivers

Oil Updates – crude rises, markets await OPEC+ decision amid mixed demand drivers
Updated 01 March 2024
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Oil Updates – crude rises, markets await OPEC+ decision amid mixed demand drivers

Oil Updates – crude rises, markets await OPEC+ decision amid mixed demand drivers

SINGAPORE: Oil prices edged up on Friday and were set to end the week modestly higher as markets awaited an OPEC+ decision on supply agreements for the second quarter amid differing demand indicators for key consumers US and China, according to Reuters.

Brent futures for May climbed 31 cents, or 0.38 percent, to $82.22 a barrel by 9:45 a.m. Saudi time, while US West Texas Intermediate for April rose 24 cents, or 0.31 percent, to $78.50.

WTI is on track for at least a 2.5 percent increase this week, while Brent is holding near last week’s settlement price. Brent has hovered comfortably above the $80 mark for three weeks.

“Brent crude prices continued to trade sideways this week ... Brent at $83/bbl has shown recent strength although fundamentals remain tilted to oversupply,” said BMI analysts in a client note.

“Expectations of a continuation of OPEC+ production cuts into Q224 is also weighing on sentiment as soft demand is expected to persist ... However, timespreads for Brent futures contracts have widened. The move to stronger backwardation (market structure) will be supportive of a more bullish stance for prices as markets are pricing in tightening in the months ahead,” the analysts added.

A Reuters survey showed the Organization of the Petroleum Exporting Countries pumped 26.42 million barrels per day this month, up 90,000 bpd from January. Libyan output rose month-on-month by 150,000 bpd.

A decision on extending the cuts is expected in the first week of March, sources have said, with individual countries expected to announce their decisions.

Increasing possibilities of OPEC+ continuing with the supply cuts beyond the first quarter, potentially till the end of 2024, will likely keep oil prices above $80 a barrel, said DBS Bank energy sector team lead Suvro Sarkar.

Strong expectations of Saudi Arabia keeping term prices of crude it sells to Asian customers little changed in April from March levels also underpinned the market.

Supporting prices, the Federal Reserve’s preferred inflation gauge, the US personal consumption expenditures index, showed January inflation in line with economists’ expectations, reinforcing market bets for a June interest rate cut. This in turn could lower consumer costs and spur fuel buying activity.

However, a mixed bag of February purchasing managers’ index data from China, the world’s top oil consumer, capped price gains.

China’s manufacturing activity in February contracted for a fifth straight month, an official factory survey showed on Friday, raising pressure on Beijing policymakers to roll out further stimulus measures as factory owners struggle for orders.

“Demand side we concur that 2Q will have hiccups and we are projecting Brent to average lower in 2Q24 compared to 1Q24, before rebounding in 2H24 on the back of the potential rate cut scenario, which should boost fund flows toward riskier assets,” said DBS Bank’s Sarkar. 


Inter-Arab trade at $700bn: Union of Arab Chambers

Inter-Arab trade at $700bn: Union of Arab Chambers
Updated 29 February 2024
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Inter-Arab trade at $700bn: Union of Arab Chambers

Inter-Arab trade at $700bn: Union of Arab Chambers
  • Secretary-general attends World Trade Organization Ministerial Conference in Abu Dhabi
  • ‘The Arab region’s presence in such events aids in shaping policies for freer global trade’

SAO PAULO: Inter-Arab trade stands at $700 billion, constituting 10-11 percent of global trade, the secretary-general of the Union of Arab Chambers said on Thursday during the 13th World Trade Organization Ministerial Conference in Abu Dhabi.

In an interview with Emirates News Agency on the sidelines of the event, Khaled Hanafy highlighted the potential for increased trade, expanded business opportunities, job creation and economic growth across the Arab world through standardization, improved logistics and private sector engagement.

The UAE’s strategic positioning and robust infrastructure make it a preferred hub for international businesses seeking access to international markets, Hanafy said.

Its hosting of prestigious events such as COP28 and the WTO Ministerial Conference underscores its global leadership, communication prowess and influence in international forums, he added.

“The Arab region’s presence in such events aids in shaping policies for freer global trade,” Hanafy said, adding that the conference strengthens the UAC’s position as a representative of the Arab private sector within the WTO, potentially leading to observer status in key technical committees.

This, he said, would empower the UAC to exert greater influence on decisions shaping international trade flows.

The Arab world’s private sector contributes over 75 percent of the region’s gross domestic product, roughly equivalent to $3 trillion. This sector also plays a vital role in employment generation.

Hanafy emphasized the need for even greater private sector involvement in trade to foster business growth and achieve sustainable development across Arab nations.

He championed the UAC’s role in fostering trade cooperation within the Arab world, encompassing both commercial and investment activities.

Hanafy also advocated for the establishment of the Arab Common Market, outlining essential principles for achieving economic unity across the region.

This was the official debut of the Arab private sector at a WTO Ministerial Conference.

With unprecedented access granted to businesses at the event, representatives from regional chambers of commerce seized the opportunity to voice their concerns and aspirations.

Hanafy emphasized the significance of this inclusion at a roundtable event on the sidelines, saying: “This is the first time the Arab private sector is welcomed. The Arab private sector must be here.

“This is a great opportunity. There’s an objective: We want to see the Arab private sector have a larger role.”

Promoting economic cooperation and integration across the Arab world, the UAC unites chambers of commerce, industry and agriculture from the 22 Arab League member states.

It supports governmental and civil society initiatives to strengthen regional economic ties in commerce, industry, agriculture, finance, investment and services.