Wednesday

Saudi Arabia's Shopping Mall

The Saudi apparel retail industry is one of the high-growth markets in the Arab region especially in the women and children segments. The apparel business grew rapidly over the last several years as people became more fashion-oriented. The growth in the sector is attributed to high young population and increasing purchasing power in the backdrop of recent economic boom. Growth of this sector is evidenced by the growth of fashion retailers. In fact according to Colliers International, Riyadh has 2.5 million square meters of gross leasable shopping mall space in Riyadh versus 1.1 million in Jeddah and 1.7 million in Dubai as of 2007.

Considering the clothing style in Saudi Arabia, men mostly wear the traditional white thobes along with the red shemaghs. Women on the other hand, wear the black abayas and tarhas for everyday use. Despite the fact that all women wear the traditional Abaya on top of their clothes, underneath the abaya, Western dress is most common. Western dress is adopted more by the younger Saudi generation outside school. Non-Saudi adults usually wear the Western dress code.

The market for apparel sales in Saudi Arabia are made up of varied products not representing global brands in addition to unbranded items, which are generally imported from Asia. However, with the maturing of the market, there has been a shift towards branded apparel sold through international retail chains. Sales of braded apparels are estimated to be around 25 to 30 per cent of total apparel sales. Its share continues to increase as evidenced by the expansion of the number of outlets and the number of malls specialised in international retail chains.

The market share of branded apparel has witnessed a steady increase in the last decade due to changes in consumer tastes and converging global fashion trends. Saudi consumers have become increasingly sophisticated, demonstrating brand awareness and brand loyalty, demanding quality service and value for money and carefully looking out for new product lines from their preferred brands.

Saudi Arabian Apparel market is heavily reliant on imports especially when it comes to fabric, cloth, accessories and ready-made Western style clothes. These imports come from all over the world depending on price range and quality. There is a noticeable distinction and a clear line between the high-end and low-end types of clothes. European and American clothes are usually classified as high-end and targeted towards the upper social class, whereas, garments imported from the Far East especially from China offers much lower prices and quality and is geared towards the lower social class, which represents the largest section of the pie. Saudi manufacturers, on the other hand, mainly supply military uniforms and traditional abayas.

Apparel outlets in Saudi Arabia range from exclusive boutiques carrying true haute couture and top international designer labels to souq stalls. In Saudi Arabia, Riyadh is currently the largest market for retail apparel in Saudi Arabia accounting for around 40 per cent of total apparel sales, and is followed by Jeddah at around 30 per cent and Dammam and Khobar at around 20 per cent. The growing presence of international branded apparel in these big cities has contributed to growth in branded apparel sector.

Jeddah is larger on the mid-tier due to the large number of pilgrims it receives during the Hajj and Umrah seasons, while Riyadh being more important for the top end of the market due to the presence of a larger base of wealthier consumers.

Dammam/Khobar comes in the third place, although it does gain some seasonal importance during Hajj and Umrah seasons when pilgrims coming from Bahrain and Kuwait stop over for shopping on their way back form the pilgrimage. Though going forward the smaller cities are expected to grow at a higher rate, the larger cities like Riyadh, Jeddah and Dammam will continue to contribute bulk of the sales.

5 comments:

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