"Looking ahead to 2025, ... success will demand bold innovation, strategic agility, and a deep understanding of shifting consumer behaviors," says Andrey Dvoychenkov, NielsenIQ APP Cluster Leader.NielsenIQ, a consumer intelligence company, has announced a recap of the FMCG and Tech and Durable (T&D) sector under State of the Nation 2024 revealing insights on GCC shoppers, with key insights into consumer behaviour in the UAE and KSA.
The report reveals that 2024 proved that the Middle East continues to be a hub for growth, populated by a resilient people with the willingness to push on amid global tensions and economic uncertain.
In 2024, 72 per cent of UAE shoppers claimed they would pay more for quality products as they care about quality. Whereas, KSA consumers were skewed towards mainstream brands, and they looked for promotion of their brand choice.
The report also revealed that in both markets, consumers prefer to complete their purchases through the established organised retail channel; however, they are becoming more trusting of alternative channels in their search for better deals.
Andrey Dvoychenkov, NielsenIQ APP Cluster Leader, said: “”Our recent State of the Nation highlights how the FMCG and T&D sectors in the Middle East evolved throughout 2024, with consumers spending their money with purpose as investments.”
The report finds that traditional retail channels, consisting of small, independent outlets, contributes a quarter of revenues generated in KSA and has grown by 1.7 per cent. The same channel has grown by almost 10 per cent in the UAE.
E-commerce growth for FMCG is at 46 per cent for KSA and 29 per cent for UAE. This gives consumers more choices in terms of shopping destinations and allows suppliers to improve the distribution of their products. In the T&D space, a similar dynamic is emerging, where the online channel consistently contributes more than 25 per cent of total revenues across the UAE and KSA, achieving growth figures that surpass those of the brick-and-mortar stores.
Regarding the T&D sector, the report claims that premium brands generated more than 40 per cent of revenue in Saudi Arabia and more than 55 per cent in the UAE, fastest growing across 3 segments. However, value brands in this space have a new-found focus on entry-level brands from both suppliers and consumers, who have realised more than 10 per cent gains year on year across both markets, the report reveals.
“They [consumers] are willing to pay more for quality while they don’t give up choosing value for money on certain essential needs. Looking ahead to 2025, a breakout product could emerge, but success will demand bold innovation, strategic agility, and a deep understanding of shifting consumer behaviors,” said Dvoychenkov.
This indicates that while consumers of T&D products are parting ways with their hard-earned incomes for premium goods, they are constantly considering finding similar value from a more economical offering.
