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RIYADH: The Gulf Cooperation Council, or GCC, luxury market is projected to hit $11 billion by 2023, up from the current $9.7 billion, according to privately held luxury goods retailer and distributor Chalhoub Group GCC’s Luxury Report.

The GCC luxury sector reported a growth of over 23 percent from 2019, according to Lynn Al Khatib, group head of communication at Chalhoub Group.

Saudi Arabia has reached $2.2 billion in the personal luxury segment, reflecting a growth of over 19 percent, primarily driven by spend repatriation [spending that would have otherwise been done while abroad, often on holiday], female empowerment, retail landscape, event and activities, and the e-commerce boom, according to the report.

In an attempt to grow and transform the retail space, Chalhoub Group is increasing store openings, and heavily investing in their fulfillment center to enhance last mile delivery to their customers.

Figures indicate that 60 percent of repatriation happens in people’s home countries.

On the other hand, e-commerce recorded double-digit growth with the beauty sector experiencing a 63 percent growth while fashion 89 percent.

“We forecast a 7 percent increase in the fashion and retail industry in the next two years, driven by the rise of e-commerce,” Al Khatib added.

In addition, 33 percent of luxury consumers now are women in the workforce who are more willing to spend on luxury and ultra luxury.

Moreover, Chalhoub Group has proven their commitment as a group to a sustainability strategy that they are embedding at the core of their business. This is evident in its business ethics, commitment to the people, planet, and partners.

Chalhoub Group is keen on supporting small local businesses and helping them thrive, grow, and enhance the business. 

Last year, in partnership with the Fashion Commission of Saudi Arabia’s Ministry of Culture, Chalhoub launched a “fashion lab” to help bolster small local designers and businesses.

“Strategic collaborations with authoritative private sector entities will play a pivotal role in supporting us with intelligence and insights on the fashion industry. Such collaborations will ultimately benefit the regional fashion industry, nurture local talents and support the growth of retail,” the report said, citing Burak Cakmak, Chief Executive of the Fashion Commission.

While tourism is expected to increase, which is beneficial for the sector, some risks remain due to geopolitical uncertainty. 

Local spending by GCC nationals as well as the development of new categories, among several other factors will aid the market reach the $11 billion set for 2023, the report stated.