The UAE saw consumption-led growth in the first half of 2024, while the Saudi Arabian market showed flat performance during the period due to the high base effect of last year, a latest market survey said.
The economic growth in both countries remains robust, with growth in the UAE being broad-based driven by strong activity in the tourism, construction, and financial services sectors, while that in Saudi Arabia remained strong with its the rate of inflation is still controlled, according to the survey by NielsenIQ, the world’s leading consumer intelligence company, said.
The survey also said UAE shoppers are slightly more loyal to their brands than those in Saudi Arabia, as they will look for promotion of their brand choice.
“While both UAE and KSA shoppers are highly promo-sensitive, UAE shoppers exhibit a slightly stronger inclination toward brand preference.
This suggests that while promotions are influential, brand reputation and trust play a significant role in their purchasing decisions,” NielsenIQ said.
The survey said 72 percent of shoppers in the Emirates and 71 percent in KSA claim that they are willing to pay more for quality products as they care about quality.
“This number has increased more than 4 points compared to a year ago, which shows the demand from consumers to look for their needs where health and wellness was one of the priorities,” the survey said.
Another important implication for brands and retailers is convenience, the survey pointed out, with 63 percent of shoppers in UAE and 64 percent in KSA believe it is worth paying more for anything that saves time for them.
This number has gone up by almost 10 points compared to a year ago, NielsenIQ said, adding that this validates the rise of smaller formats and e-commerce where these channels provide high convenience.
Brand dynamics in UAE and KSA
The NielsenIQ survey said the UAE market is fragmented between affordable brands and premium brands, whereas the KSA market is skewed towards mainstream brands.
“The FMCG market in KSA is characterised by a more concentrated mid-tier segment, leading to a decline in the number of brands.
“In contrast, the UAE market has witnessed brand growth, driven by the introduction of new brands and innovative premium offerings,” it said.
Andrey Dvoychenkov, APP Cluster Leader at NielsenIQ, said the UAE’s diverse population and differences in disposable income have created a polarized FMCG market.
“Affordable brands resonate with price-sensitive consumers, while premium brands attract those prioritising quality and luxury,” he said.
Dvoychenkov said in contrast, KSA’s larger population and competitive market dynamics have driven the success of mainstream brands, which offer a balanced mix of quality and affordability appealing to a broad consumer base.
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