Mideast shoppers among worlds most impulsive

Thursday, Jul 11, 2013

Consumers in the Middle East and Africa are among the most impulsive and brand-conscious shoppers in the world, new findings from a global survey revealed.

The latest Nielsen Global Survey of Consumer Shopping Behaviour, which polled more than 29,000 online respondents in 58 countries including UAE and Saudi Arabia, showed that approximately four out of ten people in the region (39 per cent) have a habit of impulsively buying things they don’t need.

The affinity for buying famous brands is also highest among consumers in the region (56 per cent). Nearly half (43 per cent) tend to get their hands on new products ahead of other consumers.

Residents in Asia Pacific, which includes growth markets such as China, India and Indonesia, are at the top of the impulsive spending list, with 40 per cent of consumers making unplanned purchases, and 45 per cent trying products earlier than others.

“With about one-third of global respondents often buying things they did not need and trying products earlier than others, impulsive spenders and early adopters were in the minority in all regions. But respondents [in Middle East and Africa, as well as Asia Pacific] exceeded the global average for both impulsive spending and early adoption,” Nielsen said.

“While consumers with Internet access typically skew to a more affluent and younger demographic, these respondents nevertheless represent the rising income and upward mobility of these developing-market consumers,” the report added.

Other analysts said the growing disposable wealth of consumers and improved economic conditions are the key factors behind the high prevalence of impulse buying. The huge concentration of shopping malls in the region, particularly in popular destinations such as the UAE, is another major contributing factor.

Daphne Kasriel-Alexander, consumers editor at Euromonitor International, said residents with means in the region, both local and expatriates, enjoy and perceive shopping as a broader leisure activity. She said people in this part of the world often spend time shopping with friends and family.

“Shopping is experienced as entertainment. The shopping experience, after all, takes in browsing of the best of local and global goods and typically in the cool ambience of climate-controlled malls as well as the pleasure of dropping into a café or restaurant,” Alexander told Gulf News.

“Malls in the UAE increasingly offer other activities such as cinemas, ice rinks, bowling and children’s play areas too, making them a complete leisure destination. Local malls have also become social meeting hubs, particularly for young people who perceive them as a place to be and be seen in as well as shop in,” she added.

Alexander, however, stressed that impulse spending is a reflection of the successful attempt by the retailers, as well as the beauty, apparel and luxury brands, to woo the consumer with more enticing products, tempting offers and “curated” selections.

“Because consumers express themselves through consumption, buying into this style makes them feel that the sophistication inherent in the product or setting rubs off onto them when they make their purchase. Brands are increasingly reaching out to consumers online and via smartphone alerts too, to inform them about new products and time-bound discounts to persuade them to spend,” she added.

In addition to disposable income and a prevalent shopping culture, the region is also characterized by its “aspirational nature”, according to Abhik Gupta, Nielsen’s executive director for consumer packaged goods in the Middle East, North Africa and Pakistan.

“People are willing to pay more for brand names. This becomes a form of self-expression in an aspiring environment,” Gupta told Gulf News.

SIDEBAR:

BY CLEOFE MACEDA

Senior Reporter

Dubai is increasingly attracting more luxury shoppers from around the world and accounts for 30 per cent of the luxury market in the Middle East region, the latest report by Bain & Company said.

The city also commands around 60 per cent of the UAE’s luxury market. Among the shopping centres across the emirate, Dubai Mall accounts for around half of luxury purchases made in Dubai.

The revenues of worldwide luxury goods market are forecast to grow as much as 50 per cent faster than the global GDP, achieving a four to five per cent growth in 2013 and five to six per cent annual average through 2015. By mid-decade, the global luxury market is expected to break the €250 billion sales threshold.

Bain’s report noted that the consumption habits of consumers, especially tourists, are changing, with many of them seeking out new destinations, such as Dubai, South East Asia and Australia, and “showing more savvy in the items they purchase”.

“Middle East is growing at a steady pace, with Dubai continuing as the centre of gravity and the only city attracting foreign luxury consumers, such as Russians, Indians and Africans,” the report said.

Cyrille Fabre, Bain & Company partner who leads the retail and consumer products practice for the Middle East, said the region is now the ten largest luxury goods market with sales exceeding six billion euros.

“Local consumption, intra-region tourism and the strong historic relevance of hard luxury and perfumes/cosmetics are key market drivers. Dubai is the heart of the regional market as the city alone commands around 30 per cent of the luxury market of the region,” said Fabre.

Over the long term, Bain estimated that the global luxury goods market in 2025 will likely be more than five times larger than it stood in 1995.

While the region’s strong affinity for designer labels can be credited for the growth in the luxury market, Middle East consumers also take into account other factors when making purchases, be they luxury goods or average brands.

According to a Nielsen report, 51 per cent of consumers in the Middle East and Africa region are willing to buy eco-friendly products regardless of price.

Religion is also an important guiding source for decision making among 71 per cent of the consumers, far exceeding the global average of 32 per cent.

By Cleofe Maceda Senior Reporter