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Gulf retailers are missing a digital trick

Consumer behaviour on social platforms has rapidly evolved and companies need to keep up

Commerce via social media channels remains untapped in the Gulf region Shutterstock
The number of active contracts (loans and cards) reached 9.8 million at the end of December 2023, up 11% year on year

The Gulf is home to over 53 million internet users and many of those are using mobile internet. 

Consumer behaviour on digital platforms has evolved in recent years, with increases in digital payments, e-commerce and social media consumption.

Gulf governments are seeking to strengthen the digital economy and ecosystem infrastructure. But the region lags behind Asian and western businesses in digital commerce innovation. Can it change this narrative in 2024 and beyond?

At the very least, Gulf companies that adopt global digital trends before their regional peers will get an early start in exploiting growth potential.

Euromonitor International’s Top 5 Digital Consumer Trends for 2024 explores the developments set to reshape commerce across the region.

While physical retail has long been a hallmark of the Gulf’s retail offerings, most retailers have now embraced omni-channel strategies – which span bricks and mortar and digital. 

However, the increasing importance of digital platforms for consumers is pressuring companies to offer a cohesive brand experience across all those channels, including when forming partnerships with third parties.

Over 24 percent of UAE consumers seek online recommendations based on their profile, while 23 percent of UAE shoppers desire more immersive online content that mimics the in-person experience. These figures are high compared to other regions.

GenAI will start having an impact on consumer expectations over product choice, search functions and overall user experience

Technologies such as augmented reality, AI and Internet of Things will become more prevalent as retailers seek to make their online channels more intuitive.

Generative AI is poised to take on an increasingly central role in shaping the regional retail landscape. Earlier this year, Saudi Arabia launched a “GenAI for All” initiative at the Digital Cooperation Organisation. 

In a similar vein, Dubai’s Sheikh Hamdan bin Mohammed recently announced the Global Prompt Engineering Championship, which aims to usher in GenAI innovation.

GenAI will eventually start having an impact on consumer expectations over product choice, search functions and overall user experience – including satisfaction with the products available online.

Over 46 percent of professionals in the region confirmed this trend over the next 12 months.

While there have been initiatives from Etisalat and Botim, we are yet to see Gulf retailers integrate the technology into online experiences. No doubt many companies are exploring this hot technology’s potential, and first adopters will fuel new shopping behaviour.

The social media economy

Digital consumers are actively putting content on social media platforms such as YouTube, Instagram and TikTok, where short-form videos can quickly go viral. 

YouTube is the leading platform in the region, with over 38 million users in Saudi Arabia and more than 8 million in the UAE. 

TikTok now has over 24 million users in Saudi Arabia and the UAE combined. It is becoming a major voice of younger consumer segments for the region.

Consumers and content creators who share their experiences of a product or service on these platforms can drive powerful brand interest and loyalty.

Tourism and hospitality brands in the region often feature on social media. Most of the viral content emerges organically from users, without much brand or destination involvement. 

These trends are palpably altering perceptions of the region. For example, TikTok was heavily used by visitors to the 2022 World Cup in Qatar. The phrase “Habibi come to Dubai” appears to have a strong correlation with a new stream of visitors and residents. A similar hashtag about Riyadh is now circulating.

Content creators, such as the Belgian Alex Tashbaeva and the American Devin Caherly, are actively promoting Saudi Arabia as a place to live or to visit.

The hashtag #AlUla has nearly 50,000 posts on TikTok and close to 7,000 videos on YouTube, with over 2,000 channels discussing the destination.

As the tourism and culture segments develop, brands and retailers will find opportunities to use social media in an organic way by generating viral content, instead of taking the traditional marketing approach. 

Despite high levels of social media usage, engagement and content creation, social commerce remains an untapped channel.

Current developments showcase the region’s readiness to leverage the top digital consumer trends. Local brands and retailers need to act on it.

Rabia Yasmeen is senior consultant at Euromonitor International

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