The Rise of Fashion E-Commerce in Saudi Arabia

Vrinda Singh, Younis Maqousi, David Lacklen, Acile Sleiman, Sara Hamdan / March 2017

Fuelled by an overwhelmingly young population, the retail market in Saudi Arabia is among the fastest growing in the world. E-commerce is the biggest bet in the fashion market, with several new e-tailers and more offline players exploring omni-channel opportunities. Also, did you know that Ramadan is a key season for all things fashion in Saudi Arabia?

We have put together some key insights to help you navigate - and stay on top - of the fast moving fashion e-commerce landscape in Saudi Arabia. More and more, consumers are shopping online and on their mobiles. Outfits are put together on the move on mobile phones (75% of queries on mobile1) and content is increasingly browsed in a multilingual format. Local players are giving established international retailers a run for their money. And data gives us an insight into consumer preferences like never before. It’s a great time to be in the business - but only if you’re really listening.

Why You Should Pay Attention

Saudi Arabia is the only GCC market where the majority of the population is not made up of expats. It’s the only market where 72% of the population is local (in UAE, that number is 12%). As a fashion retailer, this means that you need to cater for the needs of the local consumer. Given internet and mobile phone penetration in KSA (everybody’s online), digital platforms offer retailers a wealth of data and trends that help educate their business and marketing strategies.

Whether you’re an offline retailer, a pure-play eCommerce player, or an omni-channel retailer, digital trends offer you a look into your consumers’ minds. By taking a closer look at what consumers watch on YouTube and search for on, you can adjust your Ramadan plans to meet their needs. This includes curating your collections for Ramadan (merchandising), designing your pricing strategy (sales, promotions, etc.), defining your communication plans (messaging, targeting, language, etc.), and determining how to measure success.

We’re seeing a paradigm shift in the region in terms of fashion consumers’ expectations. The days when winning as a fashion retailer depended on making brands available to consumers and pushing them accordingly are gone. Today’s fashion shopper is younger, savvier, and more connected than ever. In addition to price and selection, consumers expect to be delighted by the shopping experience: fast and easy checkout, personalized recommendations, etc.

Retail Boom Translates Online

 Over the last few years, Saudi Arabia has witnessed a retail boom. Fuelled by a young population whose median age is only 29 years, the retail sector is growing in excess of 11% (among the highest in the world). Consumer spending grew 18% yoy2, and the country was ranked 8th globally by the 2016 AT Kearney Global Retail Index.

Single brand retailers are now allowed 100% ownership in retail and wholesale ventures. Mall operators, real estate developers and fashion brands are all betting big on the Saudi market. E-commerce is not far behind.

E-commerce accounts for just 2% total retail sales in the Middle East ($3 billion), but is expected to reach $70B by 2025 with several new entrants adding to the sophistication of the market.

Fashion is one the biggest winners in Saudi Arabia’s retail boom. Despite restrictive social norms governing dress and appearances, interest and intent is thriving across clothing, apparel, footwear and accessories for both men and women.

Jolly Chic and Shein saw a tremendous spike in interest in 2016 and were among the top searched brands3. Namshi, ASOS, Souq and Net a Porter are just a few examples of international and regional e-commerce players who will be battling for a piece of the Saudi fashion pie in 2017. Success would depend, among other things, on price, choice, convenience and experience.

Digital media is leading the charge when it comes to inspiration, styling lessons and increasingly, end sales. Here are a few things we learnt…

1. Tis the Season to be Spending

 Historically, the busiest search period in the year has been the week of Eid Al Fitr (right after Ramadan), when people shop online and offline for clothing, accessories and footwear among other things to mark the end of Ramadan. Travel activity peaks during this period and the market is awash with discounts and credit card offers, adding to the excitement.

When it comes to YouTube inspiration, the month of the year when Eid Al Fitr falls is the second biggest period of fashion viewership: July in 2016 had over 21 million views on Fashion content, a month over month increase of over 30%. This is in contrast with Beauty and Food content which spikes during the month leading up to Ramadan and during the first half of Ramadan, but drops sharply afterwards.

During the month of Ramadan, engagement on Beauty and Fashion videos increases significantly, with users liking, sharing, commenting and clicking more frequently on end cards and annotations - a key trend for Fashion e-Retailers to take advantage of. During Ramadan in 2016, Beauty and, Fashion content had 500% increase in user comments, and 120% in all other engagements, compared to months before Ramadan.

Everybody Loves Sales

Ramadan is a key period, but there are other peaks during the year. When introduced 'White Friday' to the Middle East, e-commerce suddenly had a second peak period - sales! Queries for Jolly Chic grew 65% in the weeks leading up to White Friday; SheIn saw a 45% increase in searches during their sales Weeks in June and August, and they were able to sustain the searches volume after the sales period. On YouTube, two out of the top 10 Fashion videos in Saudi Arabia in 2016 were branded videos uploaded by Jolly Chic. Combined, these two videos have over 15 million views! 4

In fact, over the last two years, December and January have actually emerged as the biggest months of the year for Fashion content consumption. Dec and Jan accrue 50% more views of Fashion content than the average month in the year, showing the demand generated by White Friday, the holiday season, and January sales.

2. Shopping is for Weekdays

 Peak search time on weekdays is between 1PM and 3PM. On weekends, things remain busiest around 2PM but also pick up most in the evenings between 7PM and 9PM. Online browsing of fashion is a key ‘winding down’ activity, be it after lunch on weekdays or in the evening on a weekend5.

Fashion searches are busiest during the week from Sunday through Wednesday. Could the quantum of weekly search volume indicate that online shopping is ‘efficient’?

3. Women are Busy Shoppers. Men search on Mobile in Arabic.

 We know Saudi is mobile first and it comes as no surprise that 75% of apparel and accessory searches in the fourth quarter of 2016 were on a mobile device. Women usually shop more than men, and again, it is no surprise that search volume for ‘women’s clothing’ was almost 5 times that of ‘men’s clothing’ in the same period.

But we found that a comparatively higher percentage of searches for men’s clothing were on mobile (80%+) and in Arabic (70%+).

On YouTube, Fashion content viewership in 2016 was nearly split between men and women, both registering over 35 million views. Growth in Fashion content and viewership has been accelerating year over year since 2014. The fastest growing demographics in 2016 in Fashion viewership were men ages 25-34 (175% growth) and women 45-65 (150%), comparing to 74% growth overall with women and 120% growth in Men.

YouTube searches on Fashion content are migrating more and more to mobile devices. In 2015, 65% of Fashion searches were on mobile, increasing to 70% to 2016. Last year, YouTube searches in Saudi Arabia are 65% in Arabic6.

 4. Everyone knows everyone in the world of fashion e-commerce

 We looked at what else people searching for fashion e-retailers were likely to search for, and found an interesting pattern.

Digital influence was high. Google, Twitter, YouTube and Instagram were all searched in the same session. Amazon, ASOS and Aliexpress were popular side searches, and so were regional competitors (Shein for Jollychic and vice versa).

We mentioned deliveries earlier in the article as being essential to success, and sure enough, people browsing fashion on Google also searched for Aramex.

Online high street shoppers also seem to be looking for value for money - ‘discount coupons’ were a popular co-searched attribute.

5. Style Trends

Traditional Taste

About 60% of the top queries on women’s clothing in Saudi Arabia were related to traditional wear (sheyla and abaya), and almost all were in Arabic. Trending searches showed a strong influence from North Africa, with searches for outfits specifying Egyptian or Moroccan styles. A popular query was styles to wear the Shayla. In terms of occasions, graduation was a significant trigger for abaya searches.

White and black were the most searched colors - which seems obvious given the national dress - but red, blue and green were next in line in terms of most searched color palettes. Lace and velvet were popular materials.

All That Glitters

‘Gold’ and ‘Diamonds’ are among the top ten most searched topics in fashion and shopping. Bangles and rings have been especially popular since 2017 kicked off. 70%+ of all jewelry searches were on a mobile device, and half of these were in Arabic. Watches were among the top searched accessories and Rolex made it to the top brand searches every time.

Western Influence

The most researched items of western clothing in Saudi Arabia were dresses, jackets and shirts. The three most researched clothing accessories were shoes, watches and glasses.

Zara, Forever21, and Mango topped the women’s shopping category. People searching for fashion e-tailers also tended to search for other Western high street and premium brands such as Bershka, Nordstrom and Bloomingdales.

Celebrity endorsed athletic wear seems to be a magic formula as evidenced by Adidas and the Kanye West inspired craze for Yeezy 350 shoes - searches spiked in excess of 200+ last year.

Just For Kids

In 2016, the top three videos, (see here for an example) on YouTube in Fashion were all related to Kids, Kids Fashion and Kids Costumes. Collectively these videos have over 550 million views!7Kids clothing was also in the top 10 most searched keywords on YouTube in 2016. Clearly, this type of content is ripe for YouTube and has proven immensely popular with users, highlighting an underserved category. With the right content, any brand can easily exploit the excitable demand here.

Bringing it all together

 Our analysis of consumer intent in this paper proves what we’ve known for a long time - digital is the new playground for fashion-conscious men and women in Saudi Arabia. As a brand, you can no longer rely on four shows a year. As the success of Zara and H&M has demonstrated, it is indeed a time for fast fashion.

E-commerce has opened the doors to otherwise inaccessible brands, designers and styles. Digital media provides inspiration, be it Instagram for dresses or YouTube for new styles on wearing a Shayla. Fashion choices are influenced by celebrities, bloggers and real people. Tastes and styles are changing at an astronomical pace. Outfits are put together on the move on mobile phones, and content is increasingly browsed in a multilingual format. We won’t be surprised if fashion in Saudi becomes a mobile-only world.

Here are five takeaways:

  • As a brand, be where your consumer is - be mobile, in Arabic and in English
  • Seasonality matters, and so does data. Plan ahead and win a share of that pie. Put together looks that combine the best of the traditional and western world, luxury and high street
  • Think ahead. Service matters. If consumers are busy buying on weekday afternoons, can you deliver the next morning?
  • Post-Ramadan and Post-holidays / Jan sales are the most in-demand months on YouTube for Fashion content
  • Men and Women consume about equal amounts of Fashion videos in Saudi, and men aged between 25-45 is the fastest growing demographic in fashion. Don’t make the mistake of focusing on women’s fashion only - men are equally interested and willing to spend.



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