MENA's economic promise builds brand competition in crowded retail marketplace

Campaign ME

11 hours ago

The Middle East continues to distinguish itself as a global economic outperformer, with the United Arab Emirates and Saudi Arabia leading the charge. While global GDP growth is projected at 3.2 per cent in 2025, the UAE is expected to grow by 4 per cent and Saudi Arabia by 3 per cent, with further acceleration anticipated through 2027.
As a result, the region's economic promise is attracting a surge of global brands. In the fast-moving consumer goods (FMCG) sector, Saudi Arabia now hosts more than 10.500 active brands (up 5 per cent YoY), while the UAE features 13,000 brands (up 6 per cent). Stock keeping unit (SKU) counts are also rising, with 130,000 SKUs in the UAE and nearly 100,000 in Saudi Arabia.
Similarly, the technology and durables (T&D) sector is also competitive, with the number of active brands witnessing great increase with 18 per cent and 21 per cent respectively in UAE and KSA. SKUs have also seen more than 50 per cent growth across both markets. This creates a vibrant but crowded landscape, requiring sharper brand strategies and deeper consumer insights.
Premium vs. value: The rise of the strategic shopper
Middle Eastern consumers are increasingly discerning, balancing premium aspirations with value-driven choices. Both the UAE and Saudi Arabia recorded double-digit growth in premium and value FMCG segments, highlighting a bifurcated market.
In T&D, value segments grew 6 per cent in KSA and 3 per cent in the UAE, despite the category's premium lean.
This underscores two key trends: the rise of price-conscious decision-making and the growing availability of competitive alternatives.
As the Middle East continues its upward trajectory, global brands are positioning themselves to seize the opportunity.
But success will depend on a nuanced understanding of the region's evolving consumer landscape— from digital trust and pricing sensitivity to channel dynamics and assortment strategy.
Consumers across these regions continue to demonstrate strong resilience amid ongoing challenges.
Consumer markets show resilience amid economic transition
Consumer spending remains strong across both markets, though increasingly value-driven.
In the UAE, spending on T&D from April 2024 to March 2025 reached $5.3bn, marking a 2 per cent year-over-year increase. Key growth categories include smartphones, media tablets, vacuum cleaners and headsets.
The FMCG sector in the UAE also saw a 7 per cent increase, driven by rising demand for snacking, beverages, dairy, and frozen foods, with personal care spending up by 6 per cent.
In Saudi Arabia, growth was more moderate but steady: FMCG rose by 3.3 per cent, and T&D by 0.2 per cent.
Notable category gains include pet care (up10 per cent) and snacking (up 9 per cent), reflecting evolving lifestyle priorities, while paper products and home care witnessed declines.
Retail channels evolve: Value and e-commerce gain ground
Retail dynamics are shifting rapidly. In the UAE, traditional trade channels outpaced organised retail, with FMCG growth of 10 per cent versus 3.2 per cent, while T&D saw balanced growth across both.
E-commerce continues to expand its footprint. In the UAE, it now accounts for 30 per cent of T&D and 11 per cent of FMCG sales, up from 9 per cent a year ago. In Saudi Arabia, online sales are also rising, with a 7.7 per cent increase in T&D and a 1.4 percentage point gain in FMCG e-commerce share.
'The economic momentum we're witnessing across the Middle East, particularly in the UAE and Saudi Arabia, is a testament to the region's strategic vision and adaptability,' said Andrey Dvoychenkov, General Manager, NielsenIQ App.
'Consumers today are more empowered, informed, and value-driven than ever before. We're seeing strong growth in both premium and value segments, and a rapid evolution in retail channels — especially online. For brands, success hinges on relevance, agility, and a deep understanding of consumer expectations,' Dvoychenkov concluded.