Saudi fashion market cutting its cloth to new measurements thanks to e-commerce boom

Models present creation of Saudi designer Tima Abid during the Red Sea Fashion Week in Saudi Arabia’s Red Sea resort of Ummahat Island on May 16, 2024. (AFP file photo)
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Updated 03 November 2024
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Saudi fashion market cutting its cloth to new measurements thanks to e-commerce boom

RIYADH: Saudi Arabia is witnessing a rapid transformation in its fashion sector, bolstered by economic diversification and a youthful, digitally savvy population.

With projections pointing to a robust growth trajectory, the Kingdom's fashion market is set to emerge as a driver of the nation's non-oil economy under Vision 2030.

The fashion market in Saudi Arabia is expected to generate $4.37 billion in revenue in 2024, with a compound annual growth rate of 11.62 percent from 2024 to 2029, according to Statista.

This will lead to a market volume of $7.57 billion in the next five years, underscoring the rising demand for fashion products, fueled by a growing population, increased disposable income, and the government's strategic focus on fostering non-oil industries.

E-commerce and online presence

One of the most dynamic segments of the fashion industry in Saudi Arabia is e-commerce. The online fashion sector is forecast to hit $2.5 billion in 2024, making up 17.8 percent of the country’s total online retail market.

With a projected CAGR of 4.4 percent between 2024 and 2028, this sphere is expected to grow to nearly $3 billion by 2028. This growth aligns with global trends as more consumers turn to online platforms for their fashion needs.

EcommerceDB highlights that in August, Saudi Arabia’s monthly e-commerce revenue for fashion reached $201 million, demonstrating a consistent interest in online fashion purchases despite a slight 6.1 percent decrease from the previous month.

More notably, this market continues to expand, with the share of online retail in fashion expected to surge from 40.6 percent to 68.9 percent by 2028, reflecting the growing preference for digital shopping.

As the online market grows, local companies are already capitalizing on this trend.

Saudi e-commerce retailer Namshi.com generated $167.2 million in revenue in 2023, making it a significant player in the Kingdom’s online fashion landscape.

This growth in internet sales has allowed local and regional brands to flourish, offering customers a wide variety of apparel, accessories, and footwear at the click of a button.

A shifting retail landscape

Saudi Arabia’s domestic fashion market has long been dependent on imports, with international brands dominating the retail scene.

In 2022 the Kingdom imported $2.6 billion worth of fashion goods from China alone. However, recent years have seen a pivot towards local production and the rise of Saudi brands.

In the same year, the Kingdom’s fashion industry was valued at $24.6 billion, contributing 1.4 percent of the nation’s GDP and employing 230,000 people.

This highlights the industry’s potential, which the Saudi government is keen to harness to reduce its reliance on foreign imports and support local talent.

Vision 2030 has identified the fashion sector as a significant contributor to non-oil GDP, and the Saudi Fashion Commission is at the forefront of these efforts.

The commission has launched several initiatives aimed at developing a comprehensive fashion value chain, from design and production to retail.

A key part of this strategy is fostering local talent, supporting the growth of small and medium-sized enterprises, known as SMEs, and creating a robust ecosystem where local designers can thrive.

Fostering local talent and reducing import dependency

The Saudi government has recognized fashion as a vital sector for cultural and economic growth. In 2021, the Kingdom spent $7.3 billion on imported fashion goods, highlighting the potential for domestic growth.

The Fashion Commission, established as part of Vision 2030, aims to build a thriving local fashion ecosystem by reducing reliance on imports and promoting Saudi designers on the global stage.

As Marriam Mossalli, a prominent Saudi fashion editor and designer, told Arab News: “The world has its eye on Saudi Arabia – whether it’s through our participation in global sports, promoting the Kingdom as a new tourism destination, or a global player in the start-up economy.”

This increased attention provides a unique opportunity for Saudi fashion to gain international recognition.

For generations, Saudi women have been involved in the fashion industry, sourcing fabric and working with local tailors, Mosalli said.

Today, social media and e-commerce have opened the doors for Saudi designers to expand beyond local markets, allowing them to tap into global demand, she added.

This is especially important as global interest in Saudi culture grows, providing a platform for Saudi designers to showcase their unique aesthetic.

Designer Yousef Akbar, whose designs have been featured on the cover of Vogue Arabia, believes that fashion is now recognized as an essential part of the Saudi economy.

“The fashion industry is now recognized as serious business for the government,” Akbar said, adding that while there was little support for fashion in the past, the sector is now seen as a crucial cultural and economic pillar.

Opportunities in the broader economy

As Saudi Arabia’s fashion industry grows, so does its potential to contribute to other sectors of the economy. The rise of luxury tourism, particularly with the development of high-end resorts along the Red Sea and other key projects, presents opportunities for fashion to intersect with hospitality, entertainment, and retail.

“There are so many sectors that utilize fashion, whether it’s the staff uniforms of a new resort by the Red Sea Development Company, or costumes for a new play produced by the General Entertainment Authority. There are so many opportunities for young Saudi talent to get involved and have their homegrown aesthetic celebrated,” Mossalli said.

The push for local production and the development of Saudi brands aligns further with broader economic goals to reduce dependence on oil, increase private sector participation in the economy, and foster innovation.

The fashion industry is well-placed to contribute to these goals, especially as the government invests in infrastructure, education, and technology to support its growth .

A promising future

Saudi Arabia’s fashion market is poised for rapid expansion, driven by both government initiatives and a growing consumer base that is eager for new and innovative products.

The retail demand for fashion products in the Kingdom is expected to increase by 48 percent to $32 billion by 2025, with the luxury sector set to enjoy a 19 percent growth . These figures underscore the vast potential that exists within the Saudi fashion industry.

With a strong focus on local talent development, sustainability, and international expansion, Saudi Arabia is well on its way to building a fashion industry that not only supports its economic goals but also celebrates its rich cultural heritage.

Burak Cakmak, CEO of the Fashion Commission, outlined this in a release, saying: “Market expansion efforts, including marketing campaigns and participation in international fashion events, further enhance the visibility and competitiveness of Saudi fashion brands.

“All of these are core strategic pillars that effectively nurture a vibrant, dynamic, and globally competitive fashion industry in the Kingdom.”

He added: “We believe that the future of Saudi fashion lies in the hands of our talented designers and visionary entrepreneurs. As we continue to support and nurture these individuals, we are confident that the Kingdom’s fashion industry will continue to flourish.”


Global Markets — stocks and dollar dip as Trump’s spending bill passes, trade deal deadline nears

Updated 04 July 2025
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Global Markets — stocks and dollar dip as Trump’s spending bill passes, trade deal deadline nears

LONDON: Stocks slipped on Friday as US President Donald Trump got his signature tax cut bill over the line and attention turned to his July 9 deadline for countries to secure trade deals with the world’s biggest economy.

The dollar also fell against major currencies with US markets already shut for the holiday-shortened week, as traders considered the impact of Trump’s sweeping spending bill which is expected to add an estimated $3.4 trillion to the national debt.

The pan-European STOXX 600 index fell 0.8 percent, driven in part by losses on spirits makers such as Pernod Ricard and Remy Cointreau after China said it would impose duties of up to 34.9 percent on brandy from the EU starting July 5.

US S&P 500 futures edged down 0.6 percent, following a 0.8 percent overnight advance for the cash index to a fresh all-time closing peak. Wall Street is closed on Friday for the Independence Day holiday.

Trump said Washington will start sending letters to countries on Friday specifying what tariff rates they will face on exports to the US, a clear shift from earlier pledges to strike scores of individual deals before a July 9 deadline when tariffs could rise sharply.

Investors are “now just waiting for July 9,” said Tony Sycamore, an analyst at IG, with the market’s lack of optimism for trade deals responsible for some of the equity weakness in export-reliant Asia, particularly Japan and South Korea.

At the same time, investors cheered the surprisingly robust jobs report on Thursday, sending all three of the main US equity indexes climbing in a shortened session.

“The US economy is holding together better than most people expected, which suggests to me that markets can easily continue to do better (from here),” Sycamore said.

Following the close, the House narrowly approved Trump’s signature, 869-page bill, which averts the near-term prospect of a US government default but adds trillions to the national debt to fuel spending on border security and the military.

Trade the key focus in Asia

Trump said he expected “a couple” more trade agreements after announcing a deal with Vietnam on Wednesday to add to framework agreements with China and Britain as the only successes so far.

US Treasury Secretary Scott Bessent said earlier this week that a deal with India is close. However, progress on agreements with Japan and South Korea, once touted by the White House as likely to be among the earliest to be announced, appears to have broken down.

The US dollar index had its worst first half since 1973 as Trump’s chaotic roll-out of sweeping tariffs heightened concerns about the US economy and the safety of Treasuries, but had rallied 0.4 percent on Thursday before retracing some of those gains on Friday.

As of 2:00 p.m. Saudi time it was down 0.1 percent at 96.96.

The euro added 0.2 percent to $1.1773, while sterling held steady at $1.3662.

The US Treasury bond market is closed on Friday for the holiday, but 10-year yields rose 4.7 basis points to 4.34 percent, while the two-year yield jumped 9.3 bps to 3.882 percent.

Gold firmed 0.4 percent to $3,336 per ounce, on track for a weekly gain as investors again sought refuge in safe-haven assets due to concerns over the US’s fiscal position and tariffs.

Brent crude futures fell 64 cents to $68.17 a barrel, while US West Texas Intermediate crude likewise dropped 64 cents to $66.35, as Iran reaffirmed its commitment to nuclear non-proliferation. 


World food prices tick higher in June, led by meat and vegetable oils

Updated 04 July 2025
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World food prices tick higher in June, led by meat and vegetable oils

PARIS: Global food commodity prices edged higher in June, supported by higher meat, vegetable oil and dairy prices, the UN Food and Agriculture Organization has said.

The FAO Food Price Index, which tracks monthly changes in a basket of internationally traded food commodities, averaged 128 points in June, up 0.5 percent from May. The index stood 5.8 percent higher than a year ago, but remained 20.1 percent below its record high in March 2022.

The cereal price index fell 1.5 percent to 107.4 points, now 6.8 percent below a year ago, as global maize prices dropped sharply for a second month. Larger harvests and more export competition from Argentina and Brazil weighed on maize, while barley and sorghum also declined.

Wheat prices, however, rose due to weather concerns in Russia, the EU, and the US.

The vegetable oil price index rose 2.3 percent from May to 155.7 points, now 18.2 percent above its June 2024 level, led by higher palm, rapeseed, and soy oil prices.

Palm oil climbed nearly 5 percent from May on strong import demand, while soy oil was supported by expectations of higher demand from the biofuel sector following announcements of supportive policy measures in Brazil and the US.

Sugar prices dropped 5.2 percent from May to 103.7 points, the lowest since April 2021, reflecting improved supply prospects in Brazil, India, and Thailand.

Meat prices rose to a record 126.0 points, now 6.7 percent above June 2024, with all categories rising except poultry. Bovine meat set a new peak, reflecting tighter supplies from Brazil and strong demand from the US. Poultry prices continued to fall due to abundant Brazilian supplies.

The dairy price index edged up 0.5 percent from May to 154.4 points, marking a 20.7 percent annual increase.

In a separate report, the FAO forecast global cereal production in 2025 at a record 2.925 billion tonnes, 0.5 percent above its previous projection and 2.3 percent above the previous year.

The outlook could be affected by expected hot, dry conditions in parts of the Northern Hemisphere, particularly for maize with plantings almost complete. 


Saudi Arabia posts 4 years of VC growth despite global slowdown: report 

Updated 04 July 2025
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Saudi Arabia posts 4 years of VC growth despite global slowdown: report 

RIYADH: Saudi Arabia achieved four consecutive years of growth in venture capital relative to its economy, a feat unmatched among its peers, according to a new report.

Between 2020 and 2023, the Kingdom was the only large market in the sample to post uninterrupted annual gains in VC intensity, contrasting with the more episodic deal flow seen across Africa and parts of Southeast Asia, MAGNiTT’s recently published Macro Meets VC report stated. 

While 2024 saw a slight contraction in funding amid global tightening, Saudi Arabia’s multi-year upward trend signals a sustained commitment to innovation-led diversification.

The Kingdom is steadily consolidating its position as a model for policy-driven venture capital development in emerging markets as it seeks to diversify its economy in line with the Vision 2030 blueprint. 

“Saudi Arabia is becoming the model for long-term, policy-driven ecosystem building,” the report notes, highlighting that sovereign limited partners and local funds have been instrumental in buffering the Kingdom from some of the volatility that struck other emerging venture markets. 

Saudi Arabia’s policy momentum 

The MAGNiTT data revealed that Saudi Arabia recorded a five-year average VC-to-GDP ratio of 0.07 percent. 

Although this figure remains modest compared to more mature hubs like Singapore, its consistent upward movement underscores the growing depth of domestic capital formation. 

Beyond the headline ratios, the Kingdom’s strategic positioning has also come into sharper focus. Saudi Arabia, along with the UAE, is classified as a “Growth Market”— a designation that reflects not only a sizeable GDP and population but also the rising economic clout of local consumer and enterprise demand. 

With a GDP approaching $950 billion and a population exceeding 33 million, Saudi Arabia presents a significant scale advantage. 

According to MAGNiTT’s benchmarking, this size creates “natural expansion targets for startups moving beyond initial launch markets,” supporting both regional and international founders seeking to diversify beyond smaller ecosystems. 

MENA’s uneven progress 

Across the broader Middle East and North Africa region, venture capital activity has continued to evolve unevenly. 

The UAE has retained its reputation as a strategic innovation hub and one of the few “MEGA Markets” in the emerging world, boasting a five-year average VC-to-GDP ratio of 0.20 percent. 

This proportion — identical to Indonesia’s ratio — signifies robust venture activity relative to the economy’s size. 

Yet, while the UAE maintained this level, Saudi Arabia has seen more consistent growth in funding, a dynamic the report attributes to policy-led market development. 

In Egypt, VC has gained further traction over the period under review. Egypt achieved a 25 percent rise in total funding compared to the previous five-year average, lifting its VC-GDP ratio by 0.02 percentage points to 0.11 percent. 

Although Egypt’s overall economic constraints remain acute — GDP per capita still lags below $10,000 — the relative progress suggests improving investor confidence, particularly in fintech and e-commerce. 

However, the report cautions that deal flow in Egypt, much like in Nigeria, remains fragile and prone to episodic swings driven by a handful of large transactions. 

The macroeconomic context across MENA has also been influential. Elevated oil price volatility and the impact of the Israel–Iran conflict have created a challenging backdrop for policymakers. 

Brent crude surged more than 13 percent in a single day earlier in 2025, underscoring the region’s exposure to external shocks. 

Nevertheless, both Saudi Arabia and the UAE managed to maintain monetary policy stability in line with the US Federal Reserve’s cautious stance. 

Saudi Arabia kept its benchmark rate at 5.5 percent, supported by inflation trending around 2 percent, while the UAE held steady at 4.4 percent. 

These decisions reflected a delicate balance between containing price pressures and supporting economic diversification efforts. 

Overall, MENA’s five-year aggregate venture funding reached $12.52 billion. Although this total remains well below the levels seen in more mature regions, it represents a meaningful share of emerging markets capital. 

MENA also posted the highest deal count relative to its peers in Southeast Asia and Africa over the period, indicating a broader base of early-stage transactions even as late-stage funding remains more limited. 

The report emphasizes that expanding geographic and sectoral reach within MENA will be critical to boosting efficiency metrics. 

“VC remains heavily concentrated in a few sectors and cities,” the report observes, warning that without broader inclusion, capital intensity will struggle to match potential. 

Southeast Asia’s VC benchmark 

Beyond MENA, Southeast Asia’s ecosystem stands out as the most mature among emerging venture markets, driven primarily by Singapore’s exceptional performance. 

Over the 2020–2024 period, Singapore achieved a 5-year average VC-to-GDP ratio of 1.3 percent, surpassing not only all emerging markets but also developed economies such as the US, which registered 0.79 percent, and the UK, with 0.73 percent. 

Even with a 5.4 percent decline in total funding compared to the prior five years and a 0.19 percentage point drop in VC-GDP ratio, Singapore maintained unmatched capital efficiency. 

The report describes the city-state as “a benchmark for capital efficiency in venture ecosystems,” attributing this strength to strong regulatory frameworks, institutional capital participation, and a deep bench of experienced founders and investors. 

Indonesia, Southeast Asia’s largest economy, recorded total VC funding volumes nearly twice as large as Singapore’s over five years, but its relative VC-GDP ratio remained lower at 0.2 percent. 

This dynamic illustrates one of the report’s core findings: venture capital inflows correlate more strongly with GDP per capita than total GDP. 

In Indonesia’s case, while its GDP surpassed $1.2 trillion, GDP per capita hovered around $4,000, constraining purchasing power and, by extension, startup revenue potential. 

Thailand, meanwhile, reported funding gains due mainly to a single mega deal rather than systematic improvements in ecosystem depth. 

In Africa, Nigeria emerged as an unexpected bright spot in 2024, as a single major transaction lifted its VC-GDP ratio to 0.15 percent — the highest in the region for that year. 

However, this outlier result also revealed the episodic nature of capital deployment in developing markets. 

Kenya registered a relatively high five-year VC-GDP ratio of 0.3 percent, even as absolute funding volumes remained modest. 

The report notes that in low-GDP contexts, this ratio can overstate ecosystem maturity. 

South Africa and Egypt showed more modest growth trajectories, weighed down by persistent inflation, structural constraints, and capital scarcity. 

In aggregate, African economies continued to lag both Southeast Asia and MENA in total venture funding and deal velocity. 

Global challenges ahead 

Globally, the five years covered by the report were marked by intensifying volatility. 

High interest rates, trade tensions, and geopolitical uncertainty weighed on capital flows. 

The US Federal Reserve held its policy rate between 4.25 percent and 4.5 percent through mid-2025, citing “meaningful” inflation risks. 

The European Central Bank moved to lower its deposit rate to 2 percent, reflecting cooling inflation but acknowledging sluggish growth. 

The World Bank cut its global GDP forecast for 2025 to 2.3 percent, the weakest pace since the 2008 crisis, excluding recessions. 

These headwinds contributed to the decline in venture capital across most emerging markets in 2024. 

In response, sovereign capital and strategic investors have become increasingly important backstops. 

The report highlights that domestic capital formation in MENA has partially offset declining global risk appetite. 

However, these funds tend to be slower moving, more sector-concentrated, and less risk-tolerant than international investors. 

“Without renewed foreign inflows or regional exit pathways, deal velocity may remain muted into the second half of 2025,” the report warns. 

This environment is likely to force startups to extend runway and compel general partners to adopt more selective deployment strategies. 

Despite the challenges, the outlook for Saudi Arabia and other growth markets remains constructive over the medium term. 

The Kingdom’s policy clarity, deepening institutional capital pools, and Vision 2030 commitments create a foundation for continued expansion. 

As the report concludes: “High GDP markets like KSA and Indonesia trail in VC efficiency — suggesting capital underutilization.” 

Closing this gap between potential and realized funding will be the defining challenge for emerging ecosystems as they navigate a turbulent global landscape.


Oil Updates — crude falls as Iran affirms commitment to nuclear treaty

Updated 04 July 2025
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Oil Updates — crude falls as Iran affirms commitment to nuclear treaty

LONDON: Oil futures fell slightly on Friday after Iran reaffirmed its commitment to nuclear non-proliferation, while major producers from the OPEC+ group are set to agree to raise their output this weekend.

Brent crude futures were down 49 cents, or 0.71 percent, to $68.31 a barrel by 11:31 a.m. Saudi time, while US West Texas Intermediate crude fell 41 cents, or 0.61 percent, to $66.59.

Trade was thinned by the US Independence Day holiday.

US news website Axios reported on Thursday that the US was planning to meet with Iran next week to restart nuclear talks, while Iran Foreign Minister Abbas Araqchi said Tehran remained committed to the nuclear Non-Proliferation Treaty.

The US imposed fresh sanctions targeting Iran’s oil trade on Thursday.

Trump also said on Thursday that he would meet with representatives of Iran “if necessary.”

“Thursday’s news that the US is preparing to resume nuclear talks with Iran, and Araqchi’s clarification that cooperation with the UN atomic agency has not been halted considerably eases the threat of a fresh outbreak of hostilities,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.

Araqchi made the comments a day after Tehran enacted a law suspending cooperation with the UN nuclear watchdog, the International Atomic Energy Agency.

OPEC+, the world’s largest group of oil producers, is set to announce an increase of 411,000 bpd in production for August as it looks to regain market share, four delegates from the group told Reuters.

Meanwhile, uncertainty over US tariff policies resurfaced as the end of a 90-day pause on higher levy rates approaches.

Washington will start sending letters to countries on Friday specifying what tariff rates they will face on goods sent to the US, a clear shift from earlier pledges to strike scores of individual trade deals.

President Trump told reporters before departing for Iowa on Thursday that the letters would be sent to 10 countries at a time, laying out tariff rates of 20 percent to 30 percent.

Trump’s 90-day pause on higher US tariffs ends on July 9, and several large trading partners have yet to clinch trade deals, including the EU and Japan.

Separately, Barclays said it raised its Brent oil price forecast by $6 to $72 per barrel for 2025 and by $10 to $70 a barrel for 2026 on an improved outlook for demand. 


EV maker Lucid’s quarterly deliveries rise but miss estimates

Updated 03 July 2025
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EV maker Lucid’s quarterly deliveries rise but miss estimates

  • Lucid delivered 3,309 vehicles in the quarter ended June 30

LONDON: Electric automaker Lucid on Wednesday reported a 38 percent rise in second-quarter deliveries, which, however, missed Wall Street expectations amid economic uncertainty.

Demand for Lucid’s pricier luxury EVs have been softer as consumers, pressured by high interest rates, shift toward cheaper hybrid and gasoline-powered cars.

Lucid delivered 3,309 vehicles in the quarter ended June 30, compared with estimates of 3,611 vehicles, according to seven analysts polled by Visible Alpha. It had delivered 2,394 vehicles in the same period last year.

Saudi Arabia-backed Lucid produced 3,863 vehicles in the quarter, missing estimates of 4,305 units, but above the 2,110 vehicles made a year ago.

The company stuck to its annual production target in May, allaying investor worries about manufacturing at a time when several automakers pulled their forecasts due to an uncertain outlook.

US President Donald Trump’s tariff policy has led to a rise in vehicle prices as manufacturers struggle with high material costs, forcing them to reorganize supply chains and produce domestically.

Lucid’s interim CEO, Marc Winterhoff, had said in May that the company was expecting a rise of 8 percent to 15 percent in overall costs due to new tariffs.

The company’s fortunes rest heavily on the success of its newly launched Gravity SUV and the upcoming mid-size car, which targets a $50,000 price point, as it looks to expand its vehicle line and take a larger share of the market.

Deliveries at EV maker Tesla dropped 13.5 percent in the second quarter, dragged down by CEO Elon Musk’s right-wing political stances and an aging vehicle line-up that has turned off some buyers.