While consumers worldwide grapple with rising prices, new research reveals that shoppers in Saudi Arabia and the United Arab Emirates continue to demonstrate remarkable purchasing power – presenting significant opportunities for cross-border e-commerce sellers.
A survey by Kearney consultancy shows that while 80% of Saudi residents and 90% of UAE consumers express concern about inflation and global market volatility, their spending habits tell a different story. Saudi consumers are actually spending more on non-essential items compared to 2021, indicating sustained purchasing willingness despite economic pressures. Kearney projects this trend will continue through the coming year.
Price Increases Versus Purchasing Plans
In the UAE, the most noticeable price hikes have occurred across several categories: food and beverages (85% reporting increases), transportation (77%, including gasoline prices), restaurants and hotels (72%), clothing and footwear (70%), and electronics (68%).
Remarkably, over half of surveyed consumers still plan major household purchases (exceeding 1,000 dirhams or approximately $272) within the next six months. This demonstrates that consumer confidence in the UAE remains largely intact despite inflationary pressures.
Opportunities for E-Commerce Sellers
For cross-border retailers looking to capitalize on this resilient market, three key strategies emerge:
1. Optimize digital shopping experiences: Online shopping remains dominant in both countries due to its convenience, cost-effectiveness, product variety, and home delivery options. Streamlining e-commerce platforms for seamless user experiences is essential.
2. Strengthen brand connections: As more consumers migrate to online shopping, retailers must develop innovative ways to build brand loyalty and create compelling digital store experiences. This involves cultivating distinctive brand identities while delivering quality products and services.
3. Don't neglect physical retail: Despite the e-commerce boom, brick-and-mortar stores maintain relevance. The survey reveals that in-store experiences and convenience have grown 36% and 26% more important to consumers respectively since 2021. Retailers with physical presence capabilities should consider maintaining or establishing local outlets, or forming partnerships with regional stores.
The sustained purchasing power of Saudi and UAE consumers offers substantial potential for cross-border e-commerce businesses. By understanding and addressing these markets' unique characteristics, retailers can position themselves for success in the Middle East's thriving consumer economy.