Market Trends of Saudi Arabia Ecommerce Industry
Fashion and Apparel Segment is Expected to Grow Exponentially
- The fashion and apparel segment contributes a significant share of the revenue generated through the e-commerce offerings of the market vendors in the country. The clothing and fashion industries include many textiles and other outfits such as shoes, watches, jewelry, eyewear, bags, and accessories, including products for men, boys, women, and girls. Despite restrictive social norms governing dress and appearance, interest and intent thrive for both men and women.
- The Saudi Arabian Fashion Commission contributed to the nation's sustainability by developing the fashion industry through its 100 Saudi Brands initiatives and establishing the Saudi Professional Fashion Association. This initiative aims to develop 100 Saudi designers and premium brands to expand their businesses. This may increase the demand for e-commerce in the country, as e-commerce can be used to market the products.
- The global fashion e-commerce company has been expanding its market presence in the country, which shows the market potential in the country. For instance, in October 2022, the parent company of omnichannel retailer Nykaa, FSN International, formed a strategic partnership with the Middle Eastern Apparel Group to expand into the Gulf Cooperation Council (GCC) region, which includes Saudi Arabia.
- In March 2023, Amazon made it easy for Saudi businesses to access millions of new customers by offering its global registration system throughout the Kingdom. Along with information on units, inventory, and prices, the seller center would guide sellers in interacting with customers and increasing interaction in various product segments, including the fashion and apparel sectors. Fashion e-commerce companies have been raising funds to increase their market presence in the country's emerging e-commerce market, which may fuel market growth during the forecast period.
- According to the IMF, the country has registered a high individual net income, supported by its high per capita GDP, estimated to grow further. The growth in per capita GDP may increase the purchasing capacity of individuals in the country, which is expected to create an upsurge in demand for the fashion and apparel industries. This is expected to drive the growth of the e-commerce market in the country.
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Beauty and Personal Care Segment is Expected to Hold Significant Share
- The beauty and personal care segment includes a broad range of product categories, like cosmetics and fragrances, over-the-counter (OTC) pharmaceuticals, body and hair care products, tissue and hygiene paper, hand sanitizers, etc. Many global skincare companies are expanding their business by implementing e-commerce sales channels to increase their market presence, which may create an opportunity for market vendors.
- For instance, in January 2023, Happier Skincare, an Indian skincare company, planned to expand its business in the country. The company may adopt e-commerce expansion in the region, focusing on Saudi Arabia, which retails on several multi-brand marketplaces, including Amazon and its dedicated online store.
- Additionally, the officials of L'Oreal Middle East have stated in a forum that the customers in the country spend comparatively more money on their looks, supporting the market for cosmetics and fragrances as it continues to expand rapidly. These factors may drive the growth of e-commerce for beauty and personal care in the country.
- The country is a significant market for fragrances due to its high per capita income and rich culture. The Saudi Arabian market for high-end cosmetics and perfumes is expanding as the industry aims to appeal to upper-class consumers. For instance, Hermes opened its first fragrance and cosmetics shop in Saudi Arabia in July 2022. The increasing demand for perfumes may propel luxury fragrance brands to go for omnichannel sales, which can fuel the market in the country.
- Startups and small and medium-sized businesses in the Kingdom have taken advantage by entering the internet space and utilizing resources, like social media, to increase sales and broaden their clientele. New e-commerce companies can increase their market presence by opting for various social media platforms to avoid the advertisement expenses of their brands, which may increase the market in the country.
- Consumers in the Kingdom's Gen Z and Millennial generations are becoming more concerned with product ingredients, and there is an increasing demand for cosmetics that are organic, vegan, and made with ethical production practices. In addition, the country has been hosting beauty care product events, including Beautyworld Saudi Arabia, whose 3rd edition was organized in March 2022. These factors may increase the demand for such products in the country and create an opportunity for the e-commerce players in the country.
