KSA Textile Market Outlook to 2030

KSA Textile Market Overview

• The output of KSA textile market was USD 2.5 billion. The market is driven by several factors, including government initiatives such as Vision 2030, which emphasizes economic diversification and the localization of key industries. Increased investment in domestic manufacturing has spurred demand, alongside a growing population and rising disposable incomes. Additionally, the expanding tourism sector has contributed to increased demand for textiles in retail and hospitality settings, further bolstering the markets growth.
• Riyadh and Jeddah are the dominant cities in the KSA textile market. Riyadh, being the political and economic hub, attracts a significant portion of the country's textile manufacturing and distribution activity. Jeddah, with its strategic location as a major port city, plays a critical role in importing raw materials and exporting finished textile goods. These cities dominate due to their well-established infrastructure, access to raw materials, and proximity to key markets within and outside of Saudi Arabia.
• Saudi Arabia has implemented tariffs on imported textiles to promote domestic manufacturing. In 2024, the average tariff on imported textile goods was 5%, with certain categories like luxury fabrics seeing tariffs as high as 10%. These tariffs are part of the governments broader efforts to localize textile production and reduce the countrys dependence on imports. Additionally, the government has streamlined export procedures, making it easier for Saudi manufacturers to sell their products internationally.

KSA Textile Market Segmentation

By Product Type: The KSA textile market is segmented by product type into apparel, home textiles, technical textiles, non-woven fabrics, and fabrics & yarn. Recently, apparel holds a dominant market share under the product type segmentation, owing to its demand in both the domestic retail and luxury segments. The growing middle class in Saudi Arabia, coupled with increasing fashion consciousness and a younger population, has propelled the apparel sector to a leading position. Brands like Alhokair Group and international labels have capitalized on this demand by expanding their offerings in the country.

By Application: The KSA textile market is also segmented by application into retail & consumer goods, healthcare, industrial, and sports & fitness. Retail & consumer goods is the dominant sub-segment under application, largely due to the robust expansion of the retail industry in Saudi Arabia, fueled by increasing disposable income and consumer demand for high-quality textile products. With the rise of e-commerce platforms and the development of shopping malls, retail textiles have seen significant growth, further augmented by international fashion brands entering the Saudi market.

KSA Textile Market Competitive Landscape

The KSA textile market is dominated by a mix of local and international players, each contributing to the industry's development through technological advancements, localized production, and wide distribution networks. Companies like Alhokair Group and Naseej International have made strategic investments in textile manufacturing, while Zamil Industrial has ventured into technical textiles, catering to the industrial sector.

KSA Textile Market Analysis

Growth Drivers

• Government Initiatives (Vision 2030, Localization Efforts): The Saudi government's Vision 2030 program aims to diversify the economy and reduce reliance on oil. Textile manufacturing is one of the sectors targeted for development, with a focus on local production and reducing dependency on imports. In 2024, Saudi Arabia's Public Investment Fund (PIF) allocated USD 13.5 billion to support domestic manufacturing industries, including textiles. As part of its National Industrial Development and Logistics Program (NIDLP), USD 10.8 billion has been dedicated to stimulating textile and apparel production. Government-backed industrial zones, such as the Jeddah Industrial City, are providing incentives to attract textile manufacturers.
• Rising Demand for Sustainable Textiles: The global push toward sustainability has reached Saudi Arabia, with rising consumer demand for eco-friendly textiles. The Saudi Green Initiative emphasizes sustainability, and the textile industry has seen a shift towards organic cotton and recycled polyester. Saudi Arabia's cotton production reached 27,000 metric tons in 2023, with plans to increase sustainable fabric production through smart agriculture initiatives. Additionally, the Saudi government has implemented regulations that favor the import of sustainable textile products, which are part of Vision 2030s environmental goals.
• Growth in Tourism and Retail Apparel: Saudi Arabias tourism sector is booming, with the government investing USD 8.1 billion into developing tourism infrastructure. Saudi Arabia welcomed over100 million touristsin 2023, achieving this milestone seven years ahead of its target. As of mid-2024, Riyadh's retail market occupancy rates have climbed to90%, reflecting robust demand and a healthy market environment. This retail expansion directly correlates with the rising demand for textile products, boosting the sector's growth.

Market Challenges

• High Production Costs (Energy, Labor): Textile manufacturing in Saudi Arabia faces high production costs, particularly for energy and labor. In Q3 2021, the hourly wage of a mechanical, electrical, and plumbing (MEP) foreman in Saudi Arabia amounted to $15 (around SAR 56). These factors increase the overall cost of textile production, making it less competitive on a global scale.
• Competition from Low-Cost Imports (China, India): Saudi Arabia imports a significant portion of its textiles from low-cost producers like China and India. Saudi Arabia's textile imports are reported to exceedUSD 4 billionannually and are growing at a rate of13-15%each year. China accounts for approximately 42.58% of these imports, translating to around USD 2.04 billion. These low-cost imports present stiff competition to domestic manufacturers, who struggle to compete on price despite government localization efforts and subsidies.

KSA Textile Future Market Outlook

Over the next five years, the KSA textile market is expected to experience substantial growth. This will be driven by the continued expansion of the retail and hospitality sectors, supported by government initiatives to boost local manufacturing and reduce reliance on imports. Investments in sustainable and technical textiles are expected to be key drivers of growth, with a particular focus on smart textiles for healthcare and industrial applications. Additionally, the shift towards e-commerce will likely open new avenues for growth in the textile industry, further diversifying revenue streams for manufacturers and retailers.

Market Opportunities

• Investment in Technological Advancements (Smart Textiles, Automation): Saudi Arabia is increasingly investing in smart textiles and automation to enhance productivity and reduce reliance on imported labor. Automation in textile production is also on the rise, with industrial zones incorporating robotic technologies to streamline production. These advancements present an opportunity for Saudi manufacturers to compete globally by producing high-value, technologically advanced textiles.
• Emerging Luxury Fashion Segment: The luxury fashion segment in Saudi Arabia is expanding, supported by a growing affluent population and increasing brand collaborations. The emergence of Saudi fashion designers and collaborations with international brands are fueling demand for high-end fabrics and garments, providing lucrative opportunities for the domestic textile sector to cater to this niche market.