The UAE’s fast-moving consumer goods (FMCG) market is expected to grow by 4% in 2024 and increase to 5.1% by 2025, driven by strong performance in tourism, construction, and financial services, according to a recent report.
Saudi Arabia’s FMCG market is projected to grow by 1.5% in 2024, reaching 4.6% in 2025, supported by economic diversification initiatives. Both countries maintain low inflation rates, with the UAE at 2.4% and Saudi Arabia at 1.7%, much lower than the global average of 5.8%, creating a stable environment for consumer spending.
NielsenIQ, a global leader in consumer insights, shared these findings in its “State of Nation” report for Q3 2024. The report highlights how both markets are showing resilience despite global economic challenges, with distinct growth trends driven by consumer preferences and sector-specific conditions.
Key Consumer Trends
The report highlights differences in consumer behavior across the UAE and Saudi Arabia. While consumers in both regions are highly sensitive to promotions, UAE shoppers show stronger brand loyalty, actively looking for deals on their favorite brands.
In Saudi Arabia, temporary price reductions (TPR) dominate promotional strategies, with a notable year-on-year increase in FMCG promotions. The UAE, on the other hand, saw a 4% rise in TPR promotions, alongside a slight improvement in promotion efficiency.
Insights for Brands and Retailers
Consumers in both countries value quality, with 72% willing to pay premium prices for superior products. The UAE market shows polarization, with affordable brands growing by 15% and premium brands achieving 20% growth, offering opportunities for both price ranges. In contrast, Saudi Arabia’s FMCG growth is largely driven by mainstream brands, which have grown by 14%.
Traditional trade is also gaining momentum, outpacing modern trade in both markets. Traditional trade grew by 6.4% in the UAE and 2.4% in Saudi Arabia, reflecting changing consumer shopping habits.
FMCG Segment Performance
Both markets showed positive performance in the third quarter of 2024. The UAE recorded a 4.1% value change and 2.8% volume growth, while Saudi Arabia saw a 1.8% value change and 1.9% volume growth.
Frozen food and dairy products emerged as key growth categories in both countries, with snacking as the fastest-growing category in Saudi Arabia. E-commerce also experienced double-digit growth, especially in non-food items, reflecting increased digital adoption among consumers.
Technology and Durables Market
The tech and durables market presented a mixed picture. The UAE achieved 2.8% growth, led by strong sales in media tablets (+11%), smartwatches (+3%), and home appliances (+6%).
In Saudi Arabia, the market declined slightly by 1.1%. The telecom sector, which contributes 50% of total revenues in both markets, grew in the UAE but declined in Saudi Arabia. Both markets continue to innovate, launching approximately 19,000 new products annually, and showcasing diverse product ranges with 45,000 active items each.
Strategic Takeaways
“The GCC markets reveal fascinating contrasts and similarities,” said Andrey Dvoychenkov, APP Cluster Leader at NielsenIQ. “While both markets share trends like evolving trade channels and demand for premium products, they differ in their growth drivers.
The UAE is marked by increasing polarization between value and premium segments, while Saudi Arabia’s strength lies in its mainstream brand growth. Brands and retailers need to understand these differences to tailor their strategies and seize opportunities in these dynamic markets.”
