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5 Consumer Trends Shaped the New Normal in the Middle East

Middle East shoppers, like their international peers, have retained many of the habits and attitudes that were embedded during the COVID-19 pandemic. Notably, a preference for retailers offering seamless delivery options across both in-store and online channels, a willingness to invest in premium, locally sourced or health-oriented products, and a heightened desire for in-home activities have emerged as consistent trends among consumers in the region.

Against the backdrop of the new normal, marked by increasing purchasing power pressures and time constraints, consumers in the region Middle East are becoming increasingly choosy and agile. This article identifies and explores five key consumer trends that have emerged in the Middle East, providing insights for businesses looking to engage with this dynamic and ever-evolving market.

Polarisation of consumers

Middle Eastern retailers, like those worldwide, are still dealing with supply chain issues caused by the COVID-19 pandemic. Both physical and online stores are facing rising prices and delayed deliveries, which has resulted in two types of consumers: constrained consumers, who have been greatly impacted by the pandemic, experiencing job loss and other changes, and insulated spenders, who have higher confidence in their income and employment stability.

With regard to constrained consumers, two key trends have emerged. Firstly, constrained consumers are looking for value but are not inhibited to pay a premium occasionally when the right deal comes along. Following a brief lull in 2020 caused by Covid constraints, brand promotions are rebounding this year in response to consumers looking for value and being drawn to private labels. The percentage of volumes sold on deal or promotions in the UAE (United Arab Emirates) and Saudi Arabia across categories is growing significantly. Secondly, consumers are also looking to optimise their budgets without compromising much on quality. This trend has led to an increasing preference for private label products, with approximately 46% of value-conscious consumers in the UAE always opting for such products, driving significant growth rates, particularly in food and beverage categories.

Digital adaptation

The pandemic has significantly increased digital adoption in the Middle East, resulting in a nearly doubled FMCG e-commerce market and 1.5 times weekly e-commerce site visits increase. It’s no surprise that increased penetration and consumer adoption of digital channels have translated to more spending. According to a survey conducted by McKinsey, more than 50 percent of Middle East consumers are ready to dig deeper into their wallets, while only less than 10 percent expect to decrease spending.

Besides, Middle Eastern consumers are mobile first, meaning they overwhelmingly favor mobile apps as their preferred channel. Middle Eastern consumers' engagement on mobile apps is 1.6 times higher than in developed markets, where websites are still dominant. Additionally, the accelerated digital adoption in the Middle East has made marketplaces increasingly popular, with consumers interacting with marketplaces similar to those in Asia and at a rate 1.7 times higher than in Europe and North America.

Opportunity in the at-home space

The pandemic has given rise to enduring shopping and lifestyle habits, whereby an increasing number of consumers are opting to stay at home to engage in cooking, recreational and leisure activities with their loved ones. They also have become more mindful of their expenses, weighing the cost of dining out versus eating at home. As a result, the food and beverage industry in the Middle East has adapted to this new hybrid lifestyle by offering a balance between dining in and out. One example of this adaptation is the growing popularity of online grocery shopping and the ordering of healthy, ready-made meals. To address this trend, the F&B industry has embraced new Q-commerce models through delivery partners such as Deliveroo, Careem, Zomato, Toters, and Carrefour, as well as a subscription model that allows consumers to pay only for the items they choose to keep from a delivered package.

Consumer appetite for high-quality and healthy foods

Middle Eastern customers have a strong desire for products that fulfil their personal needs, offer the right variety and information, provide the freshest produce, and ensure cleanliness and safety. For example, 75% of UAE consumers will purchase healthy alternatives, 33% choose organic products, and 23% opt for sugar-free options since 2020. In the UAE and Saudi Arabia, a significant proportion of consumers - approximately 69% and 63%, respectively - are willing to pay a premium for high-quality products, particularly those with health benefits. This emphasis on health and wellness trend is driving growth in categories such as milk and tea, where health-promoting products are experiencing faster growth than the overall category.

ESG (environmental, social and governance) conscious

Middle East retailers struggle to keep digitally savvy shoppers loyal due to rising costs and supply chain problems. To win over these consumers, Middle East retailers must recognise that these consumers are ahead of the global trend as ethical consumers and are increasingly influenced by ESG considerations when making purchasing decisions. PwC reports that Middle East consumers are willing to pay premium prices for locally sourced products (83%) and products with transparent origins (80%). Additionally, a significant percentage (31%) would recommend companies with strong environmental records, and 27% trust such companies more than the survey average, while these percentage are much higher than global average.

Gaining a foothold in Middle East in this new normal after COVID-19 can be tricky, feel free to speak to our team today to find out how we can help your brand enter and grow in the Middle East market.

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