Gildo Zegna, CEO of Italian luxury group Zegna recently stated that “The new Hong Kong is Dubai. And next it will be Saudi Arabia.”
Saudi's retail sector, bolstered by a growing domestic market, is flourishing. Both physical stores and e-commerce platforms are thriving, the latter driven by Covid-19 shifts to online purchasing. Traditional souk markets persist, ensuring a diverse fashion landscape from haute couture to international brands across all market segments.
While the dominant men’s product category is underwear ($626m, SAR 2.3bn) and other outerwear ($499m, SAR 1.9bn) which includes thobes. The men’s market, although smaller than women’s ($3.5bn, SAR 13.1bn vs $7.4bn, SAR 27.8bn), is expected to grow by 27% from 2022 to 2027.
Domestic clothing and textiles manufacturing value addition was valued at US$2.1 billion (SAR 7.9 billion) in 2020. The value of clothing and textiles manufacturing value addition peaked at US$3.2 billion (SAR 12 billion) in 2016 (Figure 13).
This change appears to be driven by economic shifts towards services within the Kingdom, along with increased connectivity to international markets improving the ability to import. Despite this, the Kingdom has a solid foundation upon which fashion production can grow.
Knitted textile domestic production is limited, causing a 307% trade deficit increase from 2012-2021. Natural and woven textiles reveal a similar import dependency due to restricted domestic production, though woven textile imports decreased by 43% over the years.. The Saudi textile value chain thus reveals a picture of current dependencies, with significant local growth potential.
In clothing manufacturing, cotton and oil-based polyamides are dominant. Cotton imports shrunk by 52% from 2012-2021, potentially due to limited knitting and weaving capabilities. However, pre-2016 data indicates previous in-country clothing production that may have fueled cotton demand.
Oil, essential for synthetic fabrics like polyester, acrylic, and nylon, remains a cornerstone of Saudi's economy, with $210 billion mineral oil exports in 2021, securing a $205 billion trade surplus.
Understanding the importance of fashion design education, the Ministry of Culture in 2019 introduced a scholarship for Saudi designers at leading US fashion schools. Today, twelve Saudi universities offer programs in fashion-related fields, becoming an essential source of skills, knowledge, and innovation. Among them, Umm Al Qura University, Al Qussaim University, and King Abdulaziz University stand out, offering six, seven, and eight programs, respectively. While enrollment in design courses is on the rise, the rates in production remain constant, signalling a need for talent growth in the production and education segments. Nurturing this talent pipeline is key to localizing the fashion value chain.
This study revealed a fashion ecosystem workforce of 230,000 individuals, with female participation standing at 52% and Saudization accounting for 66% within core fashion jobs. Studies underscore the positive impact of increased female participation in the workforce on overall well-being. Therefore, the fashion sector could potentially be a catalyst for not only GDP growth but also labor force diversity, female empowerment, and overall well-being.
Most of the programmes offered in fashion (94%) are offered at a bachelor’s level. As of 2021 these programmes have the capacity for 3 850 students and are predominantly focused on design, covering fashion, jewellery, and textiles.
The Saudi fashion sector prioritizes these technologies as strategic components of the domestic supply chain. CEO, Burak Cakmak, notes that the Kingdom is providing an enabling environment for this transition, highlighting emerging tech-savvy designers, absence of large-scale legacy operations, and a growing market.
Saudi Arabia also showcases manufacturing capabilities in key fashion segments, particularly synthetic fibre production, given its lead in the global petrochemicals sector. Furthermore, with its leading role in petrochemicals, the Kingdom can potentially play a significant part in the emerging circular fashion economy, reusing and recycling polyamides, and supplying renewable synthetic fabrics and yarns.
If you have any questions or want to learn more about the fashion industry in Saudi, please feel free to get in contact with our team.
