GCC luxury market to reach $11 bn in 2023: Chalhoub Group report

30 Mar '22

2 min read

Pic: Chalhoub Group

The luxury market in the Gulf Coordination Council (GCC) countries is projected to reach $11 billion in 2023, growing at a compounded annual growth rate (CAGR) of 7 per cent for 2021-2023, according to a report titled ‘GCC personal luxury in 2021: A story of early recovery and growth’ published by the Chalhoub Group recently. The report offers a deep dive on Saudi Arabia.

The GCC luxury market in 2021 has shown an early recovery from pre-COVID levels, ending the year at $9.7 billion, an increase of 23 per cent over 2019 figures.

Local consumers in GCC countries today spend 60 per cent of their luxury spending inside their countries, a significant increase compared to pre-COVID days.

The retail scene in the region witnessed a lot of activity last year and is expected to continue evolving in the next few years, the report says. Prestige beauty and high-end fashion e-commerce remain strong at 11 per cent and 15 per cent share respectively in the region.

Consumers are becoming more comfortable with shopping luxury online, with rising expectations particularly on last mile. High-end fashion outperformed 2019, growing by 39 per cent, with performance driven mainly by the absolute luxury segment at 55 per cent.

Prestige beauty market is worth $1.58 billion, growing at 6 per cent versus 2019. Make-up is the only segment that didn’t recover over the 2019 situation.

Women in Saudi Arabia now make up 33 per cent of the kingdom’s labour force—nearly double what it was five years ago, contributing to a higher spend on luxury goods. A boiling retail landscape there has seen new stores, pop-ups and brands, as well as emerging ‘retailtainment’, like the Riyadh Boulevard.

Saudi consumers have turned more familiar with online purchasing, and major online players are investing in the country by opening warehouses, the report added.

Fibre2Fashion News Desk (DS)

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