M&S brings underwear and beauty boutiques to Saudi Arabia
British M&S Marks and Spencer (clothing and food) plans for the first time ever to introduce independent underwear and beauty boutiques, not in Great Britain, but in Ryad, the capital city of Saudi Arabia
The Middle East is one of the most attractive markets for Western retailers. The plans of M&S forms part of a strategy to expand in the Near East.
In a first step, there are two stores planned, each of around 250 – 300 m2. M&S regional director Mark Koprowski, commented We believe that the potential for the underwear sector is very high. In addition, we know that beauty forms one of the most popular shopping categories in the Near East.
Experts estimate that the underwear sector represents around USD 200 million annually and has brought already brands such as Victoria’s Secret to that region. Luxury brands have established themselves in the market. According to a study by Bain & Company, the value of the luxury good’s market of the Near East totals annually around USD 6 billion.
It is true that luxury goods enjoy a dominant position, but also retailers in mass markets have good chances to enter the Near East market. Between 2000 and 2008 the region generated growth rates between 25 – 30 % annually, today, growth rates are a bit more moderate, but still at 8 % annually.
According to Bain’s findings there are more and more young and well educated customers entering the market and they have a high spending culture, but they tend more to the mass market than to the luxury part. Many multinational retailers, such as the supermarket chains ASDA and Carrefour have made use of the potential and entered the Near East market.