Saudi fashion market cutting its cloth to new measurements thanks to e-commerce boom

Saudi fashion market cutting its cloth to new measurements thanks to e-commerce boom
Models present creation of Saudi designer Tima Abid during the Red Sea Fashion Week in Saudi Arabia’s Red Sea resort of Ummahat Island on May 16, 2024. (AFP file photo)
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Updated 03 November 2024
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Saudi fashion market cutting its cloth to new measurements thanks to e-commerce boom

Saudi fashion market cutting its cloth to new measurements thanks to e-commerce boom

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.”


OPEC+ extends production cuts by three months through March

OPEC+ extends production cuts by three months through March
Updated 7 min 30 sec ago
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OPEC+ extends production cuts by three months through March

OPEC+ extends production cuts by three months through March

RIYADH: OPEC+ on Thursday agreed to extend their supply cuts for three months through March to to support market stability.

OPEC+ countries, including Saudi Arabia and Russia, “will extend their additional voluntary adjustments of 2.2 million barrels per day... until the end of March 2025,” the alliance said in a statement.

A virtual meeting was held on the sidelines of the 38th OPEC and non-OPEC Ministerial Meeting.

According to the statement, the meeting welcomed the pledges made by the overproducing countries to achieve full conformity and resubmit their updated compensation schedule to the OPEC Secretariat for the overproduced volumes since January 2024 before the end of December 2024.

The alliance members will extend their additional voluntary adjustments of 2.2 million bpd, that were announced in November 2023, until the end of March 2025 and then the 2.2 million barrels per day adjustments will be gradually phased out on a monthly basis until the end of September 2026. This monthly increase can be paused or reversed subject to market conditions.

OPEC+ members are holding back 5.86 million bpd of output, or about 5.7 percent of global demand, in a series of steps agreed since 2022 to support the market.

The alliance also agreed to allow the UAE to raise output by 300,000 bpd gradually from April until the end of September 2026, instead of the earlier plan to start it in January 2025.

Despite the group’s supply cuts, global oil benchmark Brent crude has mostly stayed in a $70 to $80 per barrel range this year and on Thursday traded near $72 a barrel, having hit a 2024 low below $69 in September.


NEOM’s Topian launches pilot greenhouse for climate-resilient farming

NEOM’s Topian launches pilot greenhouse for climate-resilient farming
Updated 05 December 2024
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NEOM’s Topian launches pilot greenhouse for climate-resilient farming

NEOM’s Topian launches pilot greenhouse for climate-resilient farming

RIYADH: NEOM’s food company, Topian, has unveiled its first high-tech greenhouse in Oxagon, the industrial hub along Saudi Arabia’s Red Sea coast. 

The four-hectare facility, located in Oxagon Innovation Bay, is designed to pilot sustainable and localized food production using advanced agricultural technologies, according to a press releasae.

The greenhouse is expected to produce nearly 4,000 tonnes of fruits and vegetables annually while developing AI-driven predictive models to optimize operations in similar environments. 

This initiative is part of Topian’s broader mission to enhance food systems with sustainable practices that minimize resource use. It aligns with Saudi Arabia's ambitions to enhance food security, combat climate change, and achieve net-zero emissions by 2060, all in support of Vision 2030 goals.

“This project is exciting because this first set of high-tech greenhouses enables us to control the climate for plant growth in an environmentally friendly manner,” said Juan Carlos Motamayor, CEO of Topian. 

“It represents a positive step towards boosting regional and national food security and transforming food systems in Saudi Arabia and other arid regions affected by climate change,” he added.

The pilot will evaluate crop performance under various conditions, focusing on energy and water efficiency, cooling technologies, and radiation control. The project will leverage NEOM’s future renewable energy infrastructure to further optimize production, the release added.

Future plans include leveraging NEOM’s renewable energy infrastructure, such as its photovoltaic network, to further optimize operations.

Vishal Wanchoo, CEO of Oxagon, said: “This pilot aims to deliver, at scale, sustainably produced ingredients that NEOM residents and hospitality partners will be able to use – demonstrating an entirely localized ‘farm-to-table’ supply chain.” 

The greenhouse will provide year-round availability of locally grown produce such as lettuce, tomatoes, and strawberries, prioritizing quality and sustainability. Scientists will analyze taste, color, and texture to refine crop production for the consumer market.

Developed in collaboration with Van der Hoeven, a Dutch horticultural technology firm, the project serves as a testbed for innovative agricultural solutions. It aligns with NEOM’s broader goals to establish sustainable industries and tackle food security challenges in arid regions.

By showcasing the potential of clean technology and innovative farming practices, Topian’s greenhouse project underscores NEOM’s commitment to pioneering solutions that address global challenges and set a benchmark for future sustainable development.


Saudi Arabia launches 1st Japanese equity fund in partnership with SBI, Albilad Capital

Saudi Arabia launches 1st Japanese equity fund in partnership with SBI, Albilad Capital
Updated 05 December 2024
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Saudi Arabia launches 1st Japanese equity fund in partnership with SBI, Albilad Capital

Saudi Arabia launches 1st Japanese equity fund in partnership with SBI, Albilad Capital

DUBAI: Saudi Arabia has launched its first Japanese equity mutual fund, marking a significant step in a new partnership between Albilad Capital, the Kingdom’s largest exchange-traded fund manager, and Japan’s SBI Holdings, a leading financial group.

In a statement released on Thursday, SBI Holdings announced that the collaboration would provide Saudi investors with access to Japanese equities for the first time. At the same time, Japanese investors will be able to explore Saudi Arabia’s innovative financial offerings, including Shariah-compliant ETFs.

This partnership builds on a milestone achievement earlier this year, when SBI Asset Management— a subsidiary of SBI Global Asset Management— launched Japan’s first Saudi stock index-linked ETF, the SBI Saudi Arabia Equity Exchange Traded Fund, on the Tokyo Stock Exchange.

This new agreement further solidifies the investment ties between Saudi Arabia and Japan, contributing to the Kingdom’s Vision 2030, which focuses on attracting foreign investment, diversifying the economy, and expanding key sectors such as tourism, entertainment, and non-oil industries.

Recent developments supporting this vision include the creation of one of the world’s largest theme parks based on popular Japanese intellectual properties like Dragon Ball, as well as significant investments in major Japanese gaming companies.

Albilad Capital, the investment arm of Bank Albilad, is a key player in Saudi Arabia’s financial market and manages a significant portion of the country’s ETFs.

Meanwhile, SBI Group, which established its Middle East regional hub in Riyadh earlier this year, has reinforced its commitment to the region. The group has also teamed up with local firms to launch a regional investment fund aimed at fostering growth and innovation.

This collaboration highlights the deepening financial and economic ties between Saudi Arabia and Japan, positioning both nations for a future of shared investment opportunities.


Saudi Arabia ranks among top three globally in post-pandemic tourism rebound

Saudi Arabia ranks among top three globally in post-pandemic tourism rebound
Updated 05 December 2024
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Saudi Arabia ranks among top three globally in post-pandemic tourism rebound

Saudi Arabia ranks among top three globally in post-pandemic tourism rebound

RIYADH: Saudi Arabia has emerged as the third-fastest-growing destination worldwide for international tourism recovery in 2023, with arrivals increasing by 61 percent compared to pre-pandemic levels, according to the latest World Tourism Barometer from the UN World Tourism Organization.

The Middle East, led by Saudi Arabia and Qatar, has recorded the strongest growth globally, with international tourism recovering 98 percent of its pre-pandemic activity. Saudi Arabia’s tourism sector, a key pillar of the Kingdom’s Vision 2030 plan, is central to its broader strategy to diversify the economy away from oil dependence.

This growth is fueling efforts to boost tourism’s contribution to the national gross domestic product, with a target to raise its share from 3 percent to 10 percent by the end of the decade, aligning with the Vision 2030 objectives.

According to the Barometer, 1.1 billion international tourists traveled globally between January and September 2023, marking a major milestone in the industry’s recovery post-COVID-19.

Full recovery is expected by the end of the year, with the Middle East leading the way in growth, driven by Saudi Arabia and Qatar’s stellar performance.

Qatar, for example, saw more than double the number of arrivals compared to 2019, while Saudi Arabia's surge in visitor numbers further cemented its position as a global tourism leader.

Globally, tourism recovery has been steady across regions. Europe and Africa both surpassed 2019 levels in tourist arrivals, while the Americas reached 97 percent of pre-pandemic figures. Asia and the Pacific, which reopened more gradually, reached 85 percent of 2019 levels by September, showing continued improvement.

The Northern Hemisphere’s summer travel season was especially strong, with global arrivals nearly matching pre-pandemic levels in the third quarter.

Tourism spending has also surged. Of the 43 destinations tracked by the UNWTO, 35 reported higher tourism receipts than before the pandemic. This trend is reflected in Saudi Arabia, which has seen an increase in both visitor numbers and spending. Other countries, including Japan, Turkiye, and France, have also experienced significant growth in tourism receipts. Spain, Italy, and the UK also reported strong increases in tourism-related earnings.

UNWTO Secretary-General Zurab Pololikashvili commented: “The strong growth in tourism receipts is excellent news for economies worldwide. The fact that visitor spending is growing even faster than arrivals directly benefits millions of jobs, small businesses, and contributes significantly to the balance of payments and tax revenues in many countries.”

As global tourism recovers, Saudi Arabia continues to capitalize on this momentum to solidify its position as a leading global travel destination, while advancing its ambitious economic diversification goals.


PIF, Bpifrance sign $10bn MoU to boost Saudi-French financial ties

PIF,  Bpifrance sign $10bn MoU to boost Saudi-French financial ties
Updated 05 December 2024
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PIF, Bpifrance sign $10bn MoU to boost Saudi-French financial ties

PIF,  Bpifrance sign $10bn MoU to boost Saudi-French financial ties

RIYADH: Saudi Arabia’s Public Investment Fund and Bpifrance Assurance Export have signed a memorandum of understanding valued at $10 billion to enhance financial cooperation between the two nations.

The agreement, announced in a press release, will provide financing support to PIF and its portfolio companies over the next five years.

This collaboration is aimed at advancing sectors central to Saudi Arabia’s Vision 2030, which seeks to diversify the Kingdom’s economy and reduce reliance on oil. The deal also underscores PIF’s ongoing efforts to strengthen its international financial partnerships and expand its investment footprint globally.

“As a key driver of Vision 2030 and a leading global investor, PIF is mandated to transform and diversify the Saudi economy,” the press release noted.

Rasees Al-Saud, head of Financial Institutions and Investor Relations at PIF, called the MoU a crucial step in fostering international financial collaboration.

“This MoU marks another significant milestone in PIF’s strategy to deepen its relationships with leading global financial institutions and export credit agencies. It will open new doors for French and Saudi companies to collaborate, exchange expertise, and achieve mutually beneficial outcomes.”

Denis Le Fers, director general of Bpifrance Assurance Export, shared a similar sentiment, emphasizing the potential benefits for both countries.

“This agreement will strengthen Franco-Saudi commercial ties, increase trade flows, and create opportunities for French companies to form new partnerships. It will also contribute to the realization of Saudi Vision 2030.”

The deal highlights PIF’s growing role as a global investment catalyst and aligns with its objective to stimulate economic growth and job creation. Since its establishment in 2017, PIF has launched 99 companies, continuing to drive the Kingdom’s economic transformation through strategic partnerships.

This MoU comes on the heels of a state visit by French President Emmanuel Macron to Saudi Arabia in early December. Macron’s visit, which followed an invitation from Crown Prince Mohammed bin Salman, underscored the deepening bilateral ties and mutual commitment to enhancing cooperation across sectors, in line with both Saudi Vision 2030 and France 2030.

The number of French companies operating in Saudi Arabia has risen by more than 43% since 2020. Major French investors in the Kingdom include Air Liquide, Airbus, L'Oréal, and Total, spanning industries from energy to cosmetics.

During his visit, Macron also signed executive programs with French cultural institutions in Saudi Arabia to foster collaborations in areas such as heritage preservation, museums, libraries, and film. These initiatives will include artist training, archaeological surveys, educational workshops, and other cultural activities.

This growing partnership between France and Saudi Arabia signals a shared ambition to foster economic growth and cultural exchange in the years ahead.