Saudi Arabia, and its luxury market and consumers, are undergoing a huge transformation and The Future Laboratory's recent report provides a captivating glimpse into this evolving landscape. As the kingdom embraces economic diversification and social change through its Vision 2030 plan to pivot its economy away from oil and gas, the traditional notions of luxury are being redefined, paving the way for a more nuanced and conscious approach to consumption.
Through the economic, social and cultural expansion of Vision 2030, Saudi Arabia is flourishing. The country is in an era of innovation and enterprise, with the goal of creating a vibrant society and a strong economy. With continued investment in home grown talent, businesses, and education, KSA has created a breadth of opportunity and an aspirational population looking to celebrate its culture in the global light. Its growing number of U/HNWIs with a net worth exceeding $30m, along with a sizable youth of 63% under 30 and a newly empowered female demographic, is driving a dynamic market and a vast luxury sector. With the Kingdom forecast to be home to 203,000 millionaires by 2030, according to Euromonitor International, Saudi Arabia’s surging concentration of wealth is set to shape luxury within the country and beyond.
This luxury consumer landscape is female driven, youth dense and highly discerning. The Middle East, particularly Saudi Arabia, has seen a surge in women entrepreneurs, with one out of three new businesses in the region now founded by women, according to figures from Wealth Briefing. Saudi Arabia issued 139,754 new commercial licenses to women in 2021. The younger demographic care about national pride and cultural heritage along with a prioritisation of innovation, customisability, technology integration and exclusivity in luxury purchases. The report also shows a significant shift towards valuing experiences, authenticity, and sustainability over mere material possessions. It's not just about what you have, but how it enriches your life.
Technology is also playing a pivotal role in shaping the luxury landscape of Saudi Arabia with major investment in digital and tech start ups. Digital platforms are providing access to exclusive products and services, while virtual experiences are redefining the way consumers interact with luxury brands. From virtual showrooms to augmented reality try-ons, technology is enhancing the shopping journey and creating new avenues for engagement. But, with luxury brands that celebrate Saudi Arabia's rich cultural tapestry resonating deeply with consumers, it's a delicate balance of tradition and innovation, where authenticity reigns supreme.
Health and wellbeing are major aspects of this market shift with ‘health span’ over ‘life span’ now being viewed as a measure of luxurious living. Hotels are spearheading this shift, looking to make Saudi Arabia a wellness destination, adding to the country’s drive to develop its tourism industry. Attracting international holiday makers is a vital part of the country’s diversification and they have made headway in being better perceived globally and moving away from some of the more negative stereotypes, but there is some distance still to go. Driving this change has been the UK passport qualifying for a £100 visa upon arrival, F&B outlets no longer have gender-segregated spaces, and there is no longer an obligatory head covering for females (with the exception of mosques) but visitors are advised to keep their knees and shoulders covered. According to the latest available estimates, around 80,000 Britons make the trip a year but still the vast majority of those are religious pilgrimages and business travel, rather than tourists. The sovereign wealth fund of Saudi Arabia, the PIF, now lists five giga projects, which are core to this objective.
Developing international appeal and driving foreign investment is a key part of Vision 2030 with KSA setting an ambitious target of $100 billion in foreign direct investment by2030. As caution lingers however, luxury brands in the kingdom must adapt and innovate to meet the needs and values of its Saudi consumers as well as potential audiences abroad. KSA is no longer being perceived as a luxury market of consumers, rather a potential destination for visionaries and entrepreneurs to collaborate, shaping the space from within. It is an unusual blend of traditional and transformative luxury driven by demographic shifts, cultural influences and technological shifts. With global awareness of the nation’s cultural changes only expanding, the future of luxury in Saudi Arabia looks bright and the kingdom is eager to showcase itself to the world as it undergoes transformation.
In the last year, Mercury Communications has worked not only with giga-project Red Sea Global on its residential brief but also Saudi Space Agency (SSA) on sending the first Arab female astronaut into space - enhancing Saudi’s global position within this field as well as inspiring young women to follow STEM careers. 2024 has already kicked off with two exciting briefs in the region including supporting Binghatti with the Mercedes-Benz Places |Binghatti launch and its Bugatti and Jacob & Co branded residences – setting a new standard in luxury design and living.
