According to a survey conducted by Boston Consulting Group (BCG) in collaboration with Altagamma, the association of Italy’s top luxury labels, the Middle Eastern luxury goods market, which is projected to be worth close to € 15 billion in 2023, is expected to double in size by 2030 and reach € 30–€ 35 billion, driven by the UAE and particularly Saudi Arabia.
The Middle East and North America are predicted to have the two markets with the biggest growth potential in 2023, according to McKinsey & Company’s most recent assessment on the industry. The Middle East has benefited in the past two years from the lockdowns that China has enforced as a result of the country’s tough anti-Covid regulations. Additionally, the region’s sales of luxury items have soared as it has become a shelter for many wealthy Russians who were affected by EU and US sanctions following the invasion of Ukraine.
“The Middle East is one of the new frontiers of luxury. Especially Saudi Arabia, which until now has been slow in developing commercial spaces dedicated to the luxury world,” said Filippo Bianchi, a director and partner at BCG in Milan.
BCG noted that Saudi Arabia plans to construct eight massive shopping mall complexes, which are expected to bring some of the luxury goods purchases made by Saudi Arabians overseas back home. The BCG report estimates that Riyadh, the nation’s capital, will alone create up to 500,000 square metres of commercial space devoted to luxury, including three large malls.
The rising power of Saudi Arabia’s young population—more than 60 per cent of whom are under 30—will make it simpler to shift luxury spending back into the nation.
