The Middle East and African markets are one of the more unknown territories for many business owners. Though these markets are easily overlooked, the region possesses great potential and covers an incredibly significant amount of population and area of the world – with diverse ethnicities, consumer groups, and opportunities.
While countries in the region are experiencing economic distress due to high inflation rates, recovery from COVID-19 and unfavourable political happenings, the economy of the Middle East and Africa are still expected to grow more than 5% in 2022, followed by a predicted growth of over 3% in 2023[1][2].
Businesses interested in venturing or expanding into the Middle East and Africa must understand the market’s trends and be ready to address the consumer lifestyle of the region to integrate their products into the market successfully.
Pricing Matters in Middle East & Africa
Rising unemployment rates, economic uncertainties and fears of recession have caused consumers in the region to be more price sensitive. According to research from McKinsey, over 50% of consumers have continued to cut back on spending as of 2022[3][4]. Shoppers, especially those with lower income, tend to find cheaper products that offer similar quality compared to previous years. Many consumers are inclined to shop at sites or places with offers and discounts.
Brand Loyalty No More
The importance of purchasing branded goods has already been diminishing pre-pandemic[5]. However, ever since COVID-19, this emerging trend has been exacerbated all around in Middle East and Africa. According to NielsenIQ and PwC, Middle East & African consumers are purchasing a greater variety of brands compared to the pre-pandemic era[6][7].
This shift in consumer behaviour is partly due to price concerns, but also due to increasing preferences from individuals for supporting small businesses. Even with higher prices, most shoppers prefer to purchase locally-made products where possible.
Green is Better
Product sustainability has been a growing trend for quite some time. However, with the emergence of COVID-19, Middle East & African consumers’ concern about sustainability and well-being has become an all-time high – greater than the global average. Even though individuals in the market are more price sensitive, most of this region’s consumers are prepared to pay a premium for sustainable options[8][9].
Besides sustainable products, sustainable packaging is also of huge concern to Middle East and African shoppers[10]. Many consumers of this region are concerned about climate change and are willing to purchase products that do not negatively impact the environment. Those concerned believe that recycling information is too complicated for people to understand.
For business owners, searching for reputable sourcing platforms such as HKTDC Sourcing can provide suppliers with sustainable products and packaging worldwide.
The Middle East and African market have huge potential for any businesses looking to expand their business. Using a professional sourcing platform that clearly understands the sourcing market can give any business a head start over its competitors. Find our professionals and stay ahead of the game today.
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