“Spending less … demanding more” is how McKinsey & Company summed up the Middle East consumer following a recent survey. Among the several pieces of evidence McKinsey gathered, one stood out, suggesting Middle Eastern consumers tend to be less brand loyal, spending even more cautiously than they have in previous years. “More of them are switching from their preferred brands to less-expensive options,” it said. The approach exudes prudence and caution, probably also frugality.
The Covid-19 pandemic has profoundly impacted our relations with the material world. It has changed our attitude toward life, modified our expectations, and toughened us for the challenges ahead. The age-old tussle between the propensity to earn and the propensity to consume has also undergone an immense transformation in the last two years. In other words, our behaviour as consumers has taken a decisive shift in responding to the stimulus of a life-altering experience. However, does that make us more responsible or reasonable as consumers?
Some evidence points in this direction. Covid-19 has indeed left an economic and social impact on consumer behaviour in the Middle East. For instance, 65 per cent of the region’s consumers have become more eco-friendly. A PWC survey says, 57 per cent of Middle East consumers indicated they had been more price-oriented in the last six months, and 66 per cent (compared to 54 per cent globally) said they had been focused on saving. Another major industry player claims that the shift in consumer sentiment leads to increased calls for sustainability in the e-commerce space in the Middle East.
Going by this school of thought, we are not just changing our behaviour but also inducing change, especially in the marketplace. While change is the essence of life, it is not always for good. The pandemic has also reinforced some idiosyncratic social and behavioural patterns if these surveys are to be believed. As many as 47 per cent of regional respondents in the survey said they use their smartphones most frequently for purchases, compared with 39 percent of global respondents. Thankfully, 56 per cent of consumers in the region, compared with 45 per cent globally, prefer visiting physical stores. So, the ramifications of the pandemic are a work in progress, and the jury is still out on its various possible outcomes.
Another consumer behaviour transformed by the pandemic is the urge to travel, witnessing dramatic ups and mostly downs since 2020. In Saudi Arabia, for instance, summer travel trends reveal an overwhelming choice to spend more on holidays. On the other hand, there is no denying the rise in e-commerce spending, showcasing the rather frivolous side of consumer behaviour. Digital enabler, Network International, announced in June that during Q1, 2022, the UAE’s e-commerce spending increased at the double the pace of point of sale (PoS) transactions compared to the same quarter last year.
All said and done; it is not difficult to concede that our generation is far more aware of our surroundings, especially products and services. We are far more aware that we have inherited a world at risk from climate change, food scarcity, pollution, etc. By and large, we also have a sense of responsibility for addressing these challenges. Some of this responsibility should and is reflected in the way we consume.
The trouble is that consumer awareness is not online shopping. It should be about knowledge or perception of a situation or fact. As consumer attitudes and behaviour evolve, there will be hope for greater awareness and responsibility toward our world. What and how we consume says a lot about our future as a species.
The Middle East’s median age of 27 makes it a sizeable young population. This demography makes the population quickly adapt to digital innovation, read e-commerce, in contrast with the older consumers who prefer a human touch downtown. Euromonitor’s Digital Consumer Survey suggests the elderly are holding fort as it claims that 62 percent of Middle Eastern consumers still favour face-to-face interaction for customer service. The other good news is shifting consumer priorities to safety and hygiene, an obvious outcome of the pandemic.
Euromonitor’s beauty survey also reveals that the frequency of hand sanitizing in the Middle East is among the highest globally. Government awareness campaigns, making safety and protection a key priority, seem to have contributed to this. However, it ultimately boils down to an awareness that a clean environment can help prevent and control infection. It is also imperative to allow public places to stay open for social gatherings.
Nacho San Martin, the Managing Director of GfK Middle East, summarizes the argument by highlighting a few related factors. According to him, MENA consumers are adapting, “recovering to a new consumerism order amid global unrest, heightened economic pressures alongside newly adopted consumer choices and behaviours.”
Overall, it can be inferred that MENA consumers are more resilient and confident but are not entirely immune from financial pressures driven by Covid-19, inflation, and global trends.
- Ehtesham Shahid is an editor and researcher based in the UAE.
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