Nancy Villanueva, CEO - Middle East, InterbrandThe Middle East is one of the most vibrant and fast-changing regions in the world. It is a hotbed of brands creating, expanding and evolving as they look to tap into this market.
The combination of a rich and historical culture and forward-looking investment and governments means building brands in the Middle East is a fine balance of messages and positioning that demonstrate and champion heritage and innovation.
Businesses must not only consider this unique brand positioning but also the changing habits of the population. As the nature of product and services purchases changes, new opportunities for brands flourish.
Women’s growing participation in the Middle East
One of the starkest and most desirable changes taking hold is the improved role of women in the workforce and the economy. In Saudia Arabia, the Vision 2030 initiative has been critical to these changes, with women’s labour force participation rising from 20 per cent in 2018 to 37 per cent by 2023 (World Bank, 2023) and a concurrent surge in female entrepreneurs.
In the UAE, 84 per cent of women are considering starting their own business, according to Mastercard, with food and drink (26 per cent), online selling (22 per cent) and cosmetics (19 per cent) the most popular sectors, reflecting opportunities in consumer-driven markets.
With the empowerment of women comes their increasing influence on society and commerce – while there’s the obvious impact on sectors such as cosmetics, their influence is felt more broadly within family purchasing decisions. For instance, Saudi Arabian women are impacting the automotive sector, leading to greater demand for smaller, sleeker cars.
One brand that has tapped into this enlightened Arab pride and female empowerment is Riyadh-based multi-sports club, Al Hilal. It is offering new and enriched experiences to fans on and off the court, to reach new audiences, in new territories and help grow its businesses and boost loyalty beyond results.
We worked with the club to help it extend from soccer club to lifestyle brand, reflecting the region’s cultural values. As a national icon with global visibility – and an agent of change in the evolving KSA culture – Al Hilal can become a window to the Arab spirit for the rest of the world. The brand has done this by tapping into the concepts of fair play, competitiveness and an overcoming spirit, to reveal Saudi’s ambition to the world.
Dominance of younger generations in the Middle East
The Middle East is a young region; in Saudi Arabia 63 per cent of its population is aged 30 and younger, making it a critical Gen Z and Gen Alpha market. To cater to Gen Z, brands must balance global trends with local relevance in their marketing.
Arabs take pride in showcasing their culture, identity and belonging. So, while they adopt global trends and largely prefer European luxury brands, 95 per cent of this cohort thinks it is important for brands to support and engage with Saudi-first enterprises and celebrate local design. It also means an inevitable sway toward digital and social media with influencers becoming trusted sources for purchasing decisions.
The Saudi Telecom Group rebranded as stc to help reflect the more modern Saudi citizen – placing itself as rooted in Islamic culture but part of a digital and progressive future. Its brand transformation from telco player to regional digital leader has seen it enter new and exciting arenas without losing its equity.
For example, stc play is a digital platform focused on gaming and esports. It serves as a hub for gamers, both casual and competitive, while supporting the broader gaming culture in the region.
Leisure and entertainment categories take off
The region is hosting global and large regional cultural and sports events – be it the Qatar World Cup in 2022, KSA World Cup in 2034, F1 races or Expo 2020 Dubai.
This has secured attention from fans and brands across the world. But the expansion of leisure and entertainment in the region goes far beyond these tentpole sporting events.
The Middle East’s theme park industry is rapidly expanding, with several major projects recently opened or announced including Six Flags Qiddiya and Dragon Ball Theme Park in KSA while SeaWorld Abu Dhabi opened in 2023. Sectors struggling in other regions are flourishing here.
For example, cinema box office revenues were expected to grow at a 4 per cent compound annual growth rate (CAGR) to $1bn in MENA between 2019 and 2024, compared with a 2.4 per cent decline worldwide.
The Saudi Arabian take on luxury
The luxury market is closely associated with the region. Saudi Arabia is expected to boast 203,000 millionaires by 2030 according to Euromonitor while ultra-rich individuals with a net worth exceeding $30m are forecast to grow by 10.4 per cent in 2024, according to Knight Frank.
These consumers have the highest standards for brands, often making their luxury purchases outside KSA. In a survey of Saudi nationals, 60 per cent of those earning over $266,000 (SAR 1 million) said that personalised offerings significantly affect their decision to engage with a luxury brand or service.
This embrace of personalisation extends to services – 42 per cent said they use concierge-style luxury services at least once a month.
Change in the region is fast and extensive, and brands need to adapt. But adapt they must, for this is a region hungry for new brands and experiences and willing to invest in the infrastructure to support them. It’s for brands to find the narratives that support the region’s heritage while fully focused on the future.
By Nancy Villanueva, CEO – Middle East, Interbrand
