UAE And KSA Shoppers Show Increased Willingness To Pay For Quality, New Survey Reveals

NielsenIQ, a leading consumer intelligence firm, has revealed insights into shopper behaviours in the GCC region. UAE shoppers show slightly more brand loyalty compared to those in KSA and are inclined to seek promotions for their preferred brands.

The economic landscape in both regions remains strong. In KSA, inflation is controlled, while the UAE's growth is driven by tourism, construction, and financial services sectors.

Promotion Sensitivity

Both UAE and KSA shoppers are highly sensitive to promotions. However, UAE consumers display a stronger preference for specific brands. This indicates that while promotions are important, brand trust and reputation significantly influence their buying decisions.

KSA's market shows high promo intensity and efficiency. Brands there use promotions strategically to boost sales while keeping costs low. Temporary price reductions are the most common type of promotion.

In contrast, the UAE has seen stable promo intensity but a slight drop in efficiency. Temporary price cuts have become more common recently, indicating a shift in promotional tactics.

Significance of Brands and Retailers

A significant 72% of UAE shoppers and 71% of KSA shoppers are willing to pay more for quality products. This figure has risen by 4 points from last year, highlighting an increased focus on health and wellness among consumers.

Convenience also plays a crucial role for shoppers. About 63% of UAE shoppers and 64% of KSA shoppers find it worthwhile to pay extra for time-saving products or services. This number has increased by nearly 10 points from last year, validating the rise of smaller formats and e-commerce channels that offer high convenience.

FMCG Segment

The FMCG market in the UAE is divided between affordable and premium brands. In contrast, KSA's market leans towards mainstream brands, which drive growth there.

KSA's FMCG sector is marked by a concentrated mid-tier segment, leading to fewer brands overall. Meanwhile, the UAE has seen brand growth due to new entries and innovative premium offerings.

Beverages, frozen food, and dairy dominate the FMCG sector in both regions due to their essential nature and convenience. Categories like home care, baby care, and paper products have declined due to lifestyle changes and a shift towards online shopping.

Technology & Durable Segment

The T&D market in both regions shows varied performance with organized retail remaining dominant. Both markets have seen growth in the premium segment—4% in KSA and 2% in the UAE—while entry-level segments also grew similarly.

Mainstream portfolios face challenges as consumers opt for value purchases or invest in aspirational brands. In KSA, this shift towards premium brands mirrors trends seen in the UAE where value-oriented players have grown by 18% compared to last year.

The T&D industry is growing rapidly with an increase in active brands and products—27% in KSA and 28% in the UAE—highlighting emerging opportunities.

HORECA and Retail Dynamics

A recent census study by NIQ shows significant growth in HORECA (hotel, restaurant, cafe) stores across four key cities in KSA. Coffee & tea shops have grown by 67% over the past two to three years due to rising beverage consumption.

Despite organized retail growth in the UAE, traditional trade remains larger in KSA by market value. However, independent retailers in the UAE TCG market are gaining ground, indicating changing consumer preferences and increased competition.

As businesses adapt to these evolving landscapes across both regions, they aim to capture growing demand for both premium and value-driven offerings.

"The UAE's diverse population creates a polarized FMCG market," says Andrey Dvoychenkov, APP Cluster Leader. "Affordable brands appeal to price-sensitive consumers while premium brands attract those seeking quality."