In the Middle East, consumers are increasingly concerned about inflation, with many perceiving it as the greatest threat to their countries. According to PwC’s Voice of the Consumer 2024 report, 56 per cent of consumers see inflation as a major concern, leading 65 per cent to plan to save or invest in the coming year. Additionally, there is a growing trend towards climate consciousness, with 70 per cent of consumers looking to own hybrid or electric vehicles.
The International Monetary Fund notes that inflation rates in many Mena economies are approaching historical averages and monetary tightening cycles seem to have ended. In the UAE, the inflation rate decreased to 3.32 per cent in July 2024. This decline follows a trend of fluctuating inflation rates in the country, with numbers ranging from a record high of 12.30 per cent in December 2008 to a record low of -2.71 per cent in May 2020.
Environmental factors are also influencing consumer behavior in the Middle East, with 85 per cent of regional consumers expressing concerns about climate change. Additionally, 83 per cent have noticed climate-related disruptions in their daily lives. This trend is leading businesses in the region to focus on sustainability as a key differentiator and opportunity for premiumization.
The PwC report highlights four key themes impacting consumers in the Middle East. These include the importance of business excellence in building consumer trust, the increasing demand for sustainable products, the influence of climate awareness on consumer behaviors, and the growing role of AI in the shopping journey. Analysts also note a surge in e-commerce in the region, with online shopping via mobile phones becoming increasingly popular.
The Middle East’s e-commerce sector is projected to reach $28.5 billion by 2022, offering businesses significant opportunities to engage with clients in the digital space. With a youthful and tech-savvy population, the region’s e-commerce market is set to continue growing, reshaping consumer behaviors and shopping habits. As businesses adapt to these trends, a focus on sustainability and technological innovation will be key to attracting and retaining value-conscious, environmentally aware consumers.
In conclusion, consumers in the Middle East are facing challenges related to inflation and climate change, while also driving trends towards sustainable consumption and digital transformation. Businesses in the region are responding to these changes by investing in sustainable practices, leveraging technology like AI, and expanding their e-commerce presence. By understanding and adapting to these consumer trends, companies can position themselves for success in the evolving Middle East market.
