Global : Saudi Apparel Retail Market - Continues to Grow Strongly

Tag : children apparels

" Global : Saudi Apparel Retail Market  Continues to Grow Strongly
Global House Investment- Kuwait- Saudi Apparel Retail Market- TheSaudi apparel retail industry is one of the high-growth markets inthe Arab region especially in the women and children segments. Theapparel business grew rapidly over the last several years as peoplebecame more fashion-oriented. The growth in the sector isattributed to high young population and increasing purchasing powerin the backdrop of recent economic boom. Growth of this sector isevidenced by the growth of fashion retailers. In fact as perColliers International, Riyadh has 2.5 million square meters ofgross leasable shopping mall space in Riyadh vs. 1.1 million inJeddah and 1.7 million in Dubai as of 2007.
Considering the clothing style in Saudi Arabia, men mostly wear thetraditional white thobes along with the red shemaghs. Women on theother hand, wear the black abayas and tarhas for everyday use.Despite the fact that all women wear the traditional Abaya on topof their clothes, underneath the abaya, Western dress is mostcommon. Western dress is adopted more by the younger Saudigeneration outside of school. Non-Saudi adults usually wear theWestern dress code.
The market for apparel sales in Saudi Arabia are made up of variedproducts not representing global brands in addition to unbrandeditems, which are generally imported from Asia. However, with thematuring of the market, there has been a shift towards brandedapparel sold through international retail chains. Sales of bradedapparels are estimated to be around 25-30% of total apparel sales.Its share continues to increase as evidenced by the expansion ofthe number of outlets and the number of malls specialized ininternational retail chains.
The market share of branded apparel has witnessed a steady increasein the last decade due to changes in consumer tastes and convergingglobal fashion trends. Saudi consumers have become increasinglysophisticated, demonstrating brand awareness and brand loyalty,demanding quality service and value for money and carefully lookingout for new product lines from their preferred brands.
Saudi Arabian Apparel market is heavily reliant on importsespecially when it comes to fabric, cloth, accessories andready-made Western style clothes. These imports come from all overthe world depending on price range and quality. There is anoticeable distinction and a clear line between the high-end andlow-end types of clothes. European and American clothes are usuallyclassified as high-end and targeted towards the upper social class,whereas, garments imported from the Far East especially from Chinaoffers much lower prices and quality and is geared towards thelower social class, which represents the largest section of thepie. Saudi manufacturers, on the other hand, mainly supply militaryuniforms and traditional abayas.
Apparel outlets in Saudi Arabia range from exclusive boutiquescarrying true haute couture and top international designer labelsto souq stalls. In Saudi Arabia, Riyadh is currently the largestmarket for retail apparel in Saudi Arabia accounting for around 40%of total apparel sales, and is followed by Jeddah (around 30%) andDammam/Khobar (around 20%). Growing presence of internationalbranded apparel in these big cities has contributed to growth inbranded apparel sector. Jeddah is larger on the mid-tier due tothe large number of pilgrims it receives during the Hajj and Umrahseasons, while Riyadh being more important for the top end of themarket due to the presence of a larger base of wealthier consumers.Dammam/Khobar comes in the third place, although it does gain someseasonal importance during Hajj and Umrah seasons when pilgrimscoming from Bahrain and Kuwait stop over for shopping on their wayback form the pilgrimage. Though going forward the smaller citiesare expected to grow at a higher rate, the larger cities likeRiyadh, Jeddah and Dammam will continue to contribute bulk of thesales.
Market Segments
The major market segments in retail apparel include Womenswear,Footwear, Childrenswear, Menswear and Eyewear.
Some segments of the market like Womenswear are more developedwhereas other segments are yet to catch up. Menswear represents asmall segment of the ready-made clothing sector in comparison toWomenswear and Childrenswear. Women and children are the majorityshoppers in the apparel market. They are mainly targeted byproviding excellent service, wide variety and quick turnover ofproducts and regular promotional campaigns to win their loyalty andregular visits. The smaller segments are expected to grow at ahigher rate in the coming years relative to the mature segments dueto their lower base. This growth will stem from the effectivetargeting of hitherto underdeveloped sectors, namely eyewear andMenswear, while the more mature areas of Womenswear andChildrenswear will remain the backbone of the market and continueto experience healthy growth.
Saudi Arabia is a major market for women and children's clothing.The market is segmented between the high-end branded sector, themid-market branded sector and the lower-priced market. The high-endand mid-market sectors of the apparel market are dominated byimports from Europe and the United States. The lower end of themarket is characterized by imports from the Far East and South EastAsia, some of which are styles copied from European and Americanbrand names.
Economic growth  an important driver of retail sector
The Saudi economy has witnessed an economic boom over the past fewyears thanks to the high crude oil prices, which have risen fromUS$25 per barrel in 2003 to exceed US$130 per barrel in 2008. Thisoil boom led to the increase in government revenue and expenditure,which in turn boosted the economy. Furthermore, the government isinvesting revenue surplus in building infrastructure and growingthe manufacturing and services sectors in the long term. This inturn will help in preserving the countrys economic strength forthe upcoming years.
The impact of a healthy economy on clothing spending is notablypositive. With higher levels of disposable income, and consumerconfidence, Saudi consumers are spending more money, particularlyon non-necessities such as mass market branded clothing. Continuedgrowth in GDP for the short to medium term will have a positiveaffect on the growth of purchasing power for consumers.
Government initiatives like Saudization are expected to have apositive impact on retail sector. Saudization will impact thecomposition of workforce and therefore will increase income levelsfor Saudis nationals. This in turn may increase expenditures onconsumer products as a whole and primarily expenditure on clothesand accessories.
Shopping Malls  Growth Enabler
The construction boom of residential, commercial, and leisureprojects, which has taken place all over the kingdom in the lastfew years, has led to the availability of large retail space. Therise of the modern shopping malls in Saudi Arabia has been takingplace at a fairly steady rate over the last ten years, with mallsbecoming increasingly sophisticated. Opening of numerous shoppingmalls and the ease and convenience this has provided shoppers withhas contributed to growth in branded apparel sector. This trend isexpected to continue in the near future with the openings of newshopping malls, providing retail companies with thousands of squaremeters to do more business in Saudi Arabia. Mall development islikely to be extremely important to the future of the brandedfashion market. Mall development is expected to spread to smallercities during the forecast period.