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KUWAIT CITY, Aug 25: Fitch Solutions confirmed the booming opportunities in the home and furniture goods market in Kuwait, explaining that savings accumulated over the past two years prompted consumers to refurbish their homes in Kuwait, reports Al-Qabas daily. The agency said in its report that the country’s high per capita income, population growth and the large number of expatriates raise consumption, and lead to the benefit of household goods and furniture companies in this market. The agency expected that the share of household goods and furnishings would constitute about 17% of the total household spending in Kuwait this year, to form the second largest category within the monthly household expenditure after personal expenditure, explaining that factors such as the growth of the number of citizens, the rise in income and urbanization lay strong foundations for medium-term growth between 2022 and 2026 in the home goods and furnishings market. It is likely that spending on household goods and furnishings in Kuwait will continue to rise compared to other sectors in the medium term to reach 17.7% of total household spending in 2026.
The agency explained that this indicates an increase in spending on household goods and furnishings from about two billion dinars in 2022 (5.2% of total spending families) to 2.9 billion dinars in 2026. The agency stressed that Kuwait, like the rest of the Gulf countries, enjoys the highest rates of income available to citizens, which makes it an ideal market for luxury brands, indicating that the average disposable income for a citizen may reach 2,100 dinars in 2022, and is expected to grow by 7.5% over the next four years to reach 2300 dinars in 2026.
It also predicted the growth of the proportion of Kuwaiti families with high incomes ($ 50,000) from 13% of the total Kuwaiti population to 15% by 2026, noting that the Kuwaiti consumer base, young and wealthy, is increasingly interested in luxury brands. The agency pointed out that despite the small size of the population in Kuwait compared to other Gulf countries, it grew steadily by 2% annually between 2015 and 2022, and the total population in Kuwait reached 4.3 million people this year, stressing that the attractiveness of the labor market in Kuwait is a factor.
It is important to its population growth, as its population consists of 70% of expatriates working in various sectors, such as construction, services and retail. Therefore, expatriates in Kuwait who represent a large proportion of low-to-middle income groups represent a large segment of the country’s FMCG and retail market. Fitch Solutions expected the average disposable income of families in Kuwait to grow until 2026 at an annual growth rate of 6.3% for the family after 4 years, pointing out that this percentage is higher than its expectations for the average price inflation in Kuwait of 2.2% during 2022 and 2026. “Fitch Solutions” stated that consumers in Kuwait accumulated financial savings during the closures in 2021 and 2022, and these savings are spent this year across the various consumer sectors and retail trade, and after spending long times at home due to corona pandemic consumers in Kuwait this year focus on modernization of home furniture and other household products, noting that the difference between disposable income per capita in Kuwait and inflation will narrow in the medium term, indicating further income growth until 2026.
The agency said that the largest percentage within the household goods sector is expected to be spent on furniture and household goods, such as lighting devices, cameras and computers, which spending on them may reach about two billion dinars in 2026 This constitutes about 47% of the total household goods in 2026, and appliances will be visual, audio, and computer are among the household goods that will register the strongest growth rates, averaging 7.1% annually until 2026.