RIYADH: Saudi Arabia is witnessing a rapid transformation in its fashion sector, bolstered by economic diversification and a youthful, digitally savvy population.
With projections pointing to a robust growth trajectory, the Kingdom's fashion market is set to emerge as a driver of the nation's non-oil economy under Vision 2030.
The fashion market in Saudi Arabia is expected to generate $4.37 billion in revenue in 2024, with a compound annual growth rate of 11.62 percent from 2024 to 2029, according to Statista.
This will lead to a market volume of $7.57 billion in the next five years, underscoring the rising demand for fashion products, fueled by a growing population, increased disposable income, and the government's strategic focus on fostering non-oil industries.
E-commerce and online presence
One of the most dynamic segments of the fashion industry in Saudi Arabia is e-commerce. The online fashion sector is forecast to hit $2.5 billion in 2024, making up 17.8 percent of the country’s total online retail market.
With a projected CAGR of 4.4 percent between 2024 and 2028, this sphere is expected to grow to nearly $3 billion by 2028. This growth aligns with global trends as more consumers turn to online platforms for their fashion needs.
EcommerceDB highlights that in August, Saudi Arabia’s monthly e-commerce revenue for fashion reached $201 million, demonstrating a consistent interest in online fashion purchases despite a slight 6.1 percent decrease from the previous month.
More notably, this market continues to expand, with the share of online retail in fashion expected to surge from 40.6 percent to 68.9 percent by 2028, reflecting the growing preference for digital shopping.
As the online market grows, local companies are already capitalizing on this trend.
Saudi e-commerce retailer Namshi.com generated $167.2 million in revenue in 2023, making it a significant player in the Kingdom’s online fashion landscape.
This growth in internet sales has allowed local and regional brands to flourish, offering customers a wide variety of apparel, accessories, and footwear at the click of a button.
A shifting retail landscape
Saudi Arabia’s domestic fashion market has long been dependent on imports, with international brands dominating the retail scene.
In 2022 the Kingdom imported $2.6 billion worth of fashion goods from China alone. However, recent years have seen a pivot towards local production and the rise of Saudi brands.
In the same year, the Kingdom’s fashion industry was valued at $24.6 billion, contributing 1.4 percent of the nation’s GDP and employing 230,000 people.
This highlights the industry’s potential, which the Saudi government is keen to harness to reduce its reliance on foreign imports and support local talent.
Vision 2030 has identified the fashion sector as a significant contributor to non-oil GDP, and the Saudi Fashion Commission is at the forefront of these efforts.
The commission has launched several initiatives aimed at developing a comprehensive fashion value chain, from design and production to retail.
A key part of this strategy is fostering local talent, supporting the growth of small and medium-sized enterprises, known as SMEs, and creating a robust ecosystem where local designers can thrive.
Fostering local talent and reducing import dependency
The Saudi government has recognized fashion as a vital sector for cultural and economic growth. In 2021, the Kingdom spent $7.3 billion on imported fashion goods, highlighting the potential for domestic growth.
The Fashion Commission, established as part of Vision 2030, aims to build a thriving local fashion ecosystem by reducing reliance on imports and promoting Saudi designers on the global stage.
As Marriam Mossalli, a prominent Saudi fashion editor and designer, told Arab News: “The world has its eye on Saudi Arabia – whether it’s through our participation in global sports, promoting the Kingdom as a new tourism destination, or a global player in the start-up economy.”
This increased attention provides a unique opportunity for Saudi fashion to gain international recognition.
For generations, Saudi women have been involved in the fashion industry, sourcing fabric and working with local tailors, Mosalli said.
Today, social media and e-commerce have opened the doors for Saudi designers to expand beyond local markets, allowing them to tap into global demand, she added.
This is especially important as global interest in Saudi culture grows, providing a platform for Saudi designers to showcase their unique aesthetic.
Designer Yousef Akbar, whose designs have been featured on the cover of Vogue Arabia, believes that fashion is now recognized as an essential part of the Saudi economy.
“The fashion industry is now recognized as serious business for the government,” Akbar said, adding that while there was little support for fashion in the past, the sector is now seen as a crucial cultural and economic pillar.
Opportunities in the broader economy
As Saudi Arabia’s fashion industry grows, so does its potential to contribute to other sectors of the economy. The rise of luxury tourism, particularly with the development of high-end resorts along the Red Sea and other key projects, presents opportunities for fashion to intersect with hospitality, entertainment, and retail.
“There are so many sectors that utilize fashion, whether it’s the staff uniforms of a new resort by the Red Sea Development Company, or costumes for a new play produced by the General Entertainment Authority. There are so many opportunities for young Saudi talent to get involved and have their homegrown aesthetic celebrated,” Mossalli said.
The push for local production and the development of Saudi brands aligns further with broader economic goals to reduce dependence on oil, increase private sector participation in the economy, and foster innovation.
The fashion industry is well-placed to contribute to these goals, especially as the government invests in infrastructure, education, and technology to support its growth .
A promising future
Saudi Arabia’s fashion market is poised for rapid expansion, driven by both government initiatives and a growing consumer base that is eager for new and innovative products.
The retail demand for fashion products in the Kingdom is expected to increase by 48 percent to $32 billion by 2025, with the luxury sector set to enjoy a 19 percent growth . These figures underscore the vast potential that exists within the Saudi fashion industry.
With a strong focus on local talent development, sustainability, and international expansion, Saudi Arabia is well on its way to building a fashion industry that not only supports its economic goals but also celebrates its rich cultural heritage.
Burak Cakmak, CEO of the Fashion Commission, outlined this in a release, saying: “Market expansion efforts, including marketing campaigns and participation in international fashion events, further enhance the visibility and competitiveness of Saudi fashion brands.
“All of these are core strategic pillars that effectively nurture a vibrant, dynamic, and globally competitive fashion industry in the Kingdom.”
He added: “We believe that the future of Saudi fashion lies in the hands of our talented designers and visionary entrepreneurs. As we continue to support and nurture these individuals, we are confident that the Kingdom’s fashion industry will continue to flourish.”
