Saudi Arabia Is Playing a Bold New Fashion Game

TRACY MA | 2024/09/14

Saudi Arabia is working hard to step into the fashion spotlight.

According to the 2023 "State of Fashion in the Kingdom of Saudi Arabia" report, the country aims to reduce its reliance on imported clothing by nurturing homegrown brands. By developing a full fashion value chain—from design and manufacturing to logistics and retail—Saudi Arabia is striving for self-sufficiency. The report predicts that by 2025, retail demand for fashion products will surge by 48%, growing at an annual rate of 13%, to reach USD 32 billion.

The Kingdom’s fashion ambitions stem from a larger national transformation. One of the world’s richest oil nations is charting a course toward economic diversification through Vision 2030 and its National Transformation Program, launched in 2016. Building a thriving fashion sector is just one piece of this broader industrial mosaic.

In truth, before 2020, Saudi Arabia had little to no fashion ecosystem. Around 90% of its garments and textiles were imported (mostly from China), there were no prominent local models on the international stage, and homegrown fashion labels were virtually nonexistent. But as economic diversification accelerated—with a boom in sports events, relaxed restrictions on women, and the Ministry of Culture’s Fashion Commission launching the “Saudi 100 Brands” program—Saudi Arabia began fostering a new, top-down approach to fashion: government-led planned fashion.

Seven years in, the results are showing. In 2022, fashion contributed 1.4% to Saudi Arabia’s GDP. By comparison, the global fashion and textile trade accounts for around 2% of global GDP.

So how exactly does this planned fashion model work? And what lessons or opportunities does it offer for emerging markets or international brands?

1. Fashion Anchored in Culture, Powered by Sports

Fashion rarely stands alone—it is deeply embedded in culture. Just as camping culture fuels outdoor gear or yoga gave rise to Lululemon, mass sports movements drive fashion trends and brands. Think basketball, football, tennis, or even disc sports—their cultural momentum can turn into fashion gold.

In Saudi Arabia, sports have become a national priority. Vision 2030 emphasizes building a professional sports ecosystem and fostering a sports economy to create jobs and improve quality of life. The country has funneled its oil-driven wealth into sports, and the results are visible—from the nation’s football club acquisitions to its rising presence in global sports.

By the end of 2022, 48.2% of Saudis engaged in at least 30 minutes of physical activity weekly. For men, the number reached 54.8%, and for women, 38.3% (GoStat data). The fashion ripple effect is clear: in 2022 alone, women’s sportswear sales hit nearly USD 1.3 billion.

Global brands are moving fast. adidas, Nike, and PUMA together controlled over 50% of Saudi Arabia’s sportswear market in 2022, with adidas leading at 29%. Nike gained momentum after sponsoring the Saudi national team in the 2022 World Cup and released a Muslim-friendly sports hijab, empowering Saudi women to bridge religion and athletics.

Other brands like FILA are also eyeing the market. While Chinese brands have been relatively quiet—aside from Semir’s 2021 Riyadh store—Saudi Arabia’s sportswear market is clearly heating up, with a projected 21% growth to USD 1.5 billion by 2027.

2. Women’s Empowerment Unlocks Consumer Potential

No conversation about fashion is complete without women. Recognizing this, Vision 2030 set a bold target: raise women’s labor force participation to 30%. In 2018, the figure stood at just 15%, far below the global average of 39%.

Saudi Arabia was long the only country where women couldn’t drive. That changed in 2022, allowing more women to work and move freely—boosting their spending power and expanding the private sector.

Once synonymous with black abayas and headscarves, Saudi women today enjoy more freedom in personal style. While abayas remain common, they now feature diverse colors, fabrics, and patterns.

Global brands are adjusting. D&G, Mango, and others have launched modest fashion lines targeting Muslim women. As reforms continue, jeans, long-sleeved tops, and maxi skirts are expected to grow in popularity.

Saudi Arabia has also hosted its own fashion weeks, aiming to rival Paris and Milan and establish itself as the Middle East’s rising fashion hub.

Yet supply is still limited. Local designers and manufacturers ready to meet demand—especially for culturally resonant pieces or innovative activewear—have clear opportunities. OEM/ODM service providers also have room to expand.

3. Weak in Manufacturing, Strong in Design

Saudi Arabia’s fashion sector remains nascent. Domestic production is small, and quality lags far behind imports.

The Fashion Commission reports over USD 7 billion in annual fashion imports. Cutting just 20% of that could redirect USD 1.3 billion into local production.

China is Saudi Arabia’s top source for fashion goods. In 2021, Saudi imports from China hit USD 2.6 billion, more than those from India (USD 807M) and the UAE (USD 618M) combined.

According to Chinese trade officials in Riyadh, the demand for high-quality fabrics has risen, while low-end imports have dropped. Cotton, wool, silk, synthetics, and blends now account for over USD 68M annually.

While weak manufacturing is a limitation, it may also be a creative advantage. As some argue, manufacturing-focused brands often struggle to lead in design.

Saudi Arabia is prioritizing design as the soul of its fashion industry. Twelve universities now offer fashion-related degrees, and students receive government support to study abroad.

The “Saudi 100 Brands” program mentors 100 designers across branding, sales, marketing, and product development. In 2023, Mohammed Ashi, one of its alumni, became the first Saudi designer to showcase at Paris Haute Couture Week.

4. Going Global: Design and E-Commerce as Gateways

Beyond exporting textiles and garments, Saudi Arabia’s shift opens doors for design-focused brands and e-commerce platforms.

China can ride the Middle East tailwind. Since Saudi Crown Prince Mohammed’s 2019 China visit, Chinese has been added to the Saudi school curriculum. The Ministry of Finance pledged to roll out Chinese in 746 secondary schools by 2022.

Many Saudi students study in China and return with an appreciation for Chinese fashion. One notable example: a Saudi princess ordered dragon-embroidered clothing from Chinese designer NE·TIGER (reportedly made by three Riyadh designers).

E-commerce offers another opportunity. Saudi Arabia is the 27th largest global and the largest Middle Eastern e-commerce market. 80% of consumers shop online daily, with an average cross-border transaction of USD 152.

By 2023, Saudi e-commerce revenues are expected to reach USD 11.97 billion, growing to USD 20.1 billion by 2027.

Previously, Jollychic had 35 million users before shutting down. Shein, AliExpress, Alibaba, and Qidian now fill the gap—creating a gateway for Chinese-made fashion to ride Saudi Arabia’s fashion boom.

A key policy update in August 2023: Saudi Arabia’s Ministry of Justice lifted the ban on foreign ownership and management of local companies. Foreign brands can now operate directly in the Kingdom—paving the way for investment, growth, and competition in fashion.

Sources:

The State of Fashion in Saudi Arabia 2023
GoStat (General Authority for Statistics)
China Daily
Unsplash (Images)