Saudi Arabia is a country anchored by skyscrapers, luxury malls, Royal housing, Holy sites and several other attractive buildings. Such structures call for comfortable, luxury furniture that evokes the royal, Islamic lifestyle of Saudis.
The Saudi Arabian furniture market is among the rapidly growing sectors spread across the GCC region. Demand for furniture is estimated to surge at a CAGR of nearly 11% between 2016 and 2020. The market has several international and domestic players. Listed below are factors influencing the Saudi Arabian Furniture Industry:
1. Development of real estate sector
The real estate sector in Saudi Arabia has been witnessing tremendous growth, thanks to the rapid urbanisation and industrialisation. Establishment of new residential and commercial complexes are likely to increase the demand for both household furniture and office furniture. Although the Kingdom’s construction industry is down at present, the government is confident that it will be able to complete major construction projects by 2030.
2. Rising Population
Because of the rising Saudi population, the demand for residential spaces has increased. The problem of shortage of housing facilities is spread across the Kingdom and the government has already started taking efforts to tackle this situation. This means, demands for housing furniture is sure to rise.
3. Booming hospitality sector
In a country where there are fewer options for entertainment, hospitality sector (including hotels, theme parks, and holy sites) is growing rapidly. Be luxury hotels, fine-dine areas, or cafeterias, all require attractive furniture to pull and retain customers.
“Rising number of private and public firms, malls, hotels, and residential spaces in Saudi is increasing the demand for furniture.”
The Saudi government has eased restrictions on foreign direct investments, thereby attracting investors into education and healthcare sectors. The country is working on many new projects for establishing world-class healthcare facilities and colleges.
5. Government initiatives
Saudi government is really very active when it comes to developing and implementing plans for expansion of different industries. The government’s Vision 2030 is likely to generate many opportunities for businessmen, both national and foreign. The government is focusing on non-oil markets to bolster its economy, which was hit due the global “oil-illness” (slumping oil prices).
6. High disposable income
Saudi Arabia has a high disposable income and a very high Human Development Index (HDI). Saudis are known to live lavish lives. Thus, they seem keen on spending on high-class furniture.
The present scenario of the Saudi Arabian furniture market highlights the gap between the “Demand” and “Domestic Supply” as local producers continue to face shortage of raw materials and other required components. This is why the current market depends on imports. However, the future looks favourable as domestic manufacturers are expanding and foreign brands are breaking grounds in the Kingdom.