Consumers value quality and convenience, a report by Bain & Company Middle East and NielsenIQ says.
The consultancy firm and data and market measurement company found consumers in the UAE, Saudi Arabia and Egypt have shifted their focus from solely prioritising cost.
Prior to the Covid-19 pandemic, consumers were willing to compromise on quality for lower prices. Today, however, consumers are willing to pay premium prices for assured quality.
They also prefer e-commerce to shopping in brick-and-mortar stores.
The February report analysed 1.4 billion online posts and reviews about retail habits by consumers.
Data was collected over the past three years.
Mike Gerousis, an analytics leader for Saudi Arabia, Africa & Levant at NielsenIQ, said: “Companies are accelerating to meet the changing needs of consumers in the region.
“Those that make the best-informed decisions and take a systematic and rigorous approach to turning the flow of data into profitable growth, will be the ones that outperform.”
By the end of this year, online retail in the Middle East will rake in $48.6 billion in sales, according to e-commerce specialist, Go Gulf. This will be an 81 per cent increase over four years, with e-commerce sales at $26.9 billion in 2018.
Consumers’ priorities have shifted, says Faisal Sheikh, a partner in Bain & Company’s Middle East’s Consumer Products and Retail Practices.
“Customers in the region have changed: conscious consumers are optimising their budgets without compromising on quality,” he said.
“More than 60% in the UAE and Saudi Arabia are willing to put a premium for quality; it is undeniable that the pandemic has made convenience paramount that shoppers are willing to pay extra for it.”
Cyrill Fabre, head of Bain & Co, says people don’t just rely on the internet for news.
“The pandemic has accelerated the rise of digital beyond merely looking for information. The FMCG e-commerce market has nearly doubled in the past three years.
“Nearly 50% of shoppers in the UAE have visited an e-commerce site in the past seven days, a significant increase from last year.”
With Middle East customers relying more on e-commerce, the region has increased its global market penetration, Go Gulf says.
As we emerge from the global pandemic, retailers will be keen to see if customers continue to value quality and convenience or revert to prioritising cost.
