(MENAFN- Mid-East Info) UAE demonstrates robust performance with 4.1% FMCG value growth and 2.8% T&D growth, while KSA shows measured FMCG growth at 1.8% with T&D experiencing a slight decline of 1.1%
Traditional Trade significantly outperforms Modern Trade across both markets, with UAE Traditional Trade surging at 6.4% and KSA achieving 2.4% growth, signaling a shift in consumer shopping preferences
Dubai, UAE, & Riyadh, KSA: NielsenIQ, the world's leading consumer intelligence company, unveils compelling insights into the contrasting market dynamics across two of the GCC's largest economies in its State of Nation for Q3' 24. While both markets demonstrate remarkable resilience against global economic pressures, their growth trajectories show distinct patterns across various sectors, reflecting unique consumer preferences and market conditions.
Economic Environment and Market Dynamics
The two GCC powerhouses continue to outperform global benchmarks in key economic indicators. The UAE is projected to achieve an impressive 4% growth in 2024, accelerating to 5.1% in 2025, driven by robust activity in tourism, construction, and financial services sectors. Saudi Arabia is forecast to grow by 1.5% in 2024, reaching 4.6% in 2025, supported by continued economic diversification initiatives. Both markets maintain exceptionally low inflation rates – UAE at 2.4% and KSA at 1.7% – significantly below the global average of 5.8%, providing a stable environment for consumer spending.
Promotion Sensitivity and Consumer Behavior
The report reveals nuanced differences in consumer behavior across both markets. Despite high promotion sensitivity in both regions, UAE shoppers demonstrate notably stronger brand loyalty compared to their KSA counterparts, actively seeking promotions for their preferred brands. Saudi Arabia has seen a significant increase in FMCG promotions year-over-year, with Temporary Price Discounts (TPR) dominating promotional activities and maintaining steady efficiency rates. The UAE maintains stable promotion levels, with a 4 percentage point increase in TPR compared to last year, accompanied by slightly improved promotion efficiency rates.
Implications for Brands and Retailers
Quality remains a paramount consideration for consumers across both markets, with 72% expressing willingness to pay premium prices for superior products. The UAE FMCG market shows distinct polarization between affordable brands (experiencing 15% growth) and premium brands (achieving 20% growth), creating opportunities at both ends of the price spectrum. In contrast, KSA's market is predominantly driven by mainstream brands, showing robust 14% growth and serving as the market's primary growth engine. Moreover, the report also indicates that traditional Trade is experiencing remarkable momentum, outpacing Modern Trade in both markets, with Traditional Trade in the UAE growing at an impressive 6.4% and KSA achieving 2.4% growth, indicating evolving consumer shopping preferences.
FMCG Segment Performance
Both markets demonstrate encouraging volume uplifts in MAT Q3'24, with UAE recording a substantial 4.1% value change and 2.8% volume growth, while KSA shows steady progress with a 1.8% value change and 1.9% volume growth. Frozen Food and Dairy categories emerge as growth leaders in both markets, with Snacking standing out as the fastest-growing industry in KSA. E-commerce continues its trajectory of strong double-digit growth across both regions, particularly in non-food categories, reflecting accelerating digital adoption among consumers.
Tech and Durables Segment
The T&D industry presents a study in contrast with the UAE achieving 2.8% growth while KSA experiences a modest 1.1% decline. UAE's growth is primarily driven by strong performance in Media Tablets (+11%), Smartwatches (+3%), and home appliances (+6%). The Telecom sector, contributing 50% of total revenues in both markets, shows divergent trends – leading growth in UAE while experiencing a pullback in KSA. Both markets demonstrate remarkable product diversity and innovation, maintaining approximately 45,000 active products each and launching an impressive 19,000 new products annually. While premium products continue to dominate sales, value players are gaining significant market share, reflecting evolving consumer preferences and market dynamics.
“The GCC markets present a fascinating study in contrasts and similarities,” says Andrey Dvoychenkov, APP Cluster Leader .“While sharing common threads in channel evolution patterns and premium product preferences, each market demonstrates unique growth drivers and consumer behaviors. UAE's market shows increasing polarization between premium and value segments, while KSA's strength lies in its robust mainstream segment. Understanding these nuanced differences and similarities is crucial for brands and retailers seeking to optimize their regional strategies and capitalize on emerging opportunities across both markets.”
About NielsenIQ:
NielsenIQ (NIQ) is the world's leading consumer intelligence company, delivering the most complete understanding of consumer buying behavior and revealing new pathways to growth. NIQ combined with GfK in 2023, bringing together the two industry leaders with unparalleled global reach. Today NIQ has operations in more than 95 countries covering 97% of GDP. With a holistic retail read and the most comprehensive consumer insights-delivered with advanced analytics through state-of-the-art platforms-NIQ delivers the Full ViewTM.
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