The Shifting Sands of Middle Eastern Consumerism

It’s only a year or so ago that one of our flock was returning from conducting qualitative fieldwork in Saudi Arabia and marvelling at the changing landscape she observed in the Middle East. With her brief to essentially explore local and international coffee shops, Lucy saw first hand some of the ways in which these markets were embracing Western design and welcoming Western brands into the mix. The people she spoke to were proud of how life was changing for them, with coffee shop culture a microcosm of an increasingly open, inclusive society and a more tolerant and progressive outlook towards the West in this region. In the immediate aftermath, further momentum was apparent, with international tourism increasingly encouraged and investment in cultural events and sporting organisations signalling a marked step change.

But a year is a long time in market research and even longer in the world of politics and international relations. As the war in Ukraine continues to rumble on, last year saw the horrendous events of October 7th in Israel leading into further horror and disaster as the subsequent conflict in Gaza unfolded. This war has now rumbled on for 4 months, and unfortunately shows no sign of ending anytime soon. If anything, instability in the region continues to build, with attacks and skirmishes spreading across borders and engulfing various sovereign states and different organisations.

This macro context is important for understanding the region and how attitudes have hardened and sharpened

A growing anti-western stance has understandably developed, given the perceived unswerving support from the US, UK and other European countries for Israel. While public opinion regarding the ongoing war is by no means unified in these places, a significant local consequence of this is a growing boycott of Western brands within the region. For some consumers, this gives them a way to articulate and express their support for Palestine and condemnation of what Israel is doing. This is impacting all manner of Western retailers in countries like Egypt, Jordan, KSA and beyond; indeed Starbucks has had to cut its yearly sales forecasts and missed market expectations with the conflict in the Middle East identified as having a significant impact on traffic and sales. In contrast, Spiro Spathis, a homegrown Egyptian soft drink brand, has reported a 300% uplift in sales, which conveniently highlights another shift in the consumer behaviour in the region.

Beyond reactive boycotting of Western brands, our trends experts have simultaneously identified a growing focus on local brands within the region, which is reflective of a more proactive shift towards celebrating the vibrancy of the local culture. Google has seen triple digit growth in queries for home-grown Saudi brands, in areas historically dominated by international brands, such as fashion and homeware. With further support coming from certain states (e.g. the Saudi 100 Brands program) to boost local industries and commercial opportunity.

this shift towards more of a local focus in design and consumerism is only going to build

With Western brands less compelling for these reasons, consumers in the region are also turning increasingly to the East, specifically towards China, and we’ve seen brands like Temu, AliExpress and Shein becoming more influential. The relationship with China is deepening in other ways, with tourism another key area of focus. Dubai had made overt overtures to wooing Chinese tourists, extending its visa-free policy to Chinese visitors and heavily promoting Dubai as a destination to visit. The impact can be seen in the proportion of high wealth Chinese tourists now considering the region with more than 1 in 5 Chinese millionaires planning to visit the region imminently. This is all contributing to making the influence of the East more desirable and impressive.

While the world never stands still, the landscape in the Middle East is changing more rapidly than most. We’ve seen first-hand how some doors may be opening one year, only to seemingly close again a year later. Which only serves to highlight how important it is to refresh your data on this critical and growing region as often as you can. There’s also a massive benefit to speaking to those with first-hand knowledge of the market and its unique dynamics. What may have held true two years ago is unlikely to hold true anymore. It also illustrates just how crucial it is to consider the wider geopolitical and macro-economic context in everything we do as market researchers.