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October 13, 2012

Spotlighting African and Middle Eastern Consumers

CrowdedstreetAnalyst Insight by Daphne Kasriel-Alexander, Consumers Editor at Euromonitor International 

Which consumer trends are manifesting themselves in the Middle East and Africa? This bulletin focuses on Middle Eastern luxury shoppers in London, British brands entering the UAE, Egyptians shopping on Facebook, American mall culture in Ghana and the attachment of South Africans to their mobile phones.

AFRICAN CONSUMERS

Facebook the new hangout for Egyptian fashionistas

As visas to Europe and the USA are becoming increasingly harder to acquire, Facebook has become the unlikely portal for Egypt's well-heeled to shop at. "Facebook shopping has successfully replaced the yearly shopping trips overseas that the upper and upper-middle class were used to," noted 30-year old Amina Megahed, who said high-end stores in Egypt fail to satisfy her hunger for fashion. Like Amina, most followers of Facebook fashion groups are mostly young women with cash and a love for fashion looking for something different from the local boutiques. In the Facebook shopping world, the group administrator is in charge of everything from purchasing to shipping and taxation, making it much easier for cash-rich but time-poor consumers to shop.

Number of Internet Users in Egypt: 2008 - 2012 1

Source: Euromonitor International from national statistics/International Telecommunications Union/OECD

Note: Data for 2012 is forecast

Ghana's middle-class hitting the mall – American style

Ghana's first American-style shopping mall in the capital, Accra, is changing the way Ghanaians spend their free time. A typical scene on a weekend could be from a shopping mall anywhere in the USA - boys in skinny jeans, girls wearing hot pink lipstick, families eating pizza at a food court. Asante-Appaih, owner of a pharmacy and dental clinic at the mall, explains: "It's become a good pastime for Ghanaians after church on Sunday. Parents can relax with their kids just strolling and shopping, much like families in Europe or in America." Developers forecast more of such malls would spring up across the country replacing the beach as a place for middle-class Ghanaians to spend their weekends. According to Euromonitor International statistics, Ghana's growth expanded to 13.6% in 2011 from 7.7% the year before - driven by new oil production and the construction sector.

No more calls for Kenyan mobile phoneys

By September the 30th, close to three million Kenyan mobile subscribers with counterfeit handsets could be plugged off unless they acquire genuine handsets. The switch off by The Communications Commission of Kenya (CCK) will be a costly affair for consumers who will have to acquire new handsets, a significant number of whom are said to have bought the fake phones unknowingly. There are an estimated 2.4 million subscribers using counterfeit phones in the country. Click to Tweet! “Counterfeits are a menace and they are a threat to our networks, especially when making sensitive transactions like money transfer,” stated Safaricom Chief Executive Officer Bob Collymore.

South Africans want to be constantly in the know

A majority of South Africans feel the need to be constantly on their phone checking for emails and updates social networking sites. According to a nationwide survey by Pharma Dynamics of 3000 respondents aged between 15 and 50, released in early July 2012, 62% live in "constant fear" of missing out on something more exciting that what they are doing. The symptoms of the epidemic, known by its acronym FOMO (fear of missing out), include the inability to put away one's mobile phone, excessive phone texting even while driving, tweeting on the toilet and showing up at events uninvited. South Africans are the most enthusiastic tweeters in Africa (with over 5 million tweets), according to a report released by UK-based research firm Tweetminster in January. Click to Tweet! Kenya came in second place, generating 2.48 million tweets – followed by Nigeria (1.67 million), Egypt (1.21 million) and Morocco (0.75 million).

MIDDLE EASTERN CONSUMERS

Summer spree takes shoppers to Olympics City

The Olympics season has seen a rush of Ramadan shoppers from the Middle East travelling to London. According to British newspaper The Daily Mail, luxury designer stores in the West End see the average Saudi shopper spend around £1,900 ($2,964) dwarfing the £120 ($187) spent by a British shopper or the £550 ($858) by an American one. Arabic speaking staffs are being hand-picked by luxury brands to make sure customers are optimally served. “The Ramadan Rush is a total phenomenon. There are so many of them. What do they love doing when they're here? Shopping!” said Jace Tyrrell of the New West End Company, the management company for retailers in Oxford, Bond and Regent Streets.

Give us the real deal, grease and all

Consumers in the Middle East are not too keen on healthy fast food alternatives, according to US pizza chain Papa John's that operates 84 outlets in the GCC (Gulf Co-operative Council). “Customers claimed they want a health-conscious pizza such as whole wheat crust, but they never order it. They always go back to the original product,” said CEO John Schnatter. The Middle East has in recent years seen a surge in fast food chains. High demand from locals and expatriates make the region a strong market for a wide range of concepts, especially in Gulf countries such as the UAE, Saudi Arabia and Kuwait. Fast food sales in Saudi Arabia are expected to reach US$4.5bn in the next three years, driven by orders from the young and affluent, according to Euromonitor International.

UAE consumers love their coffee

UAE residents consume nearly twice as much coffee as in any other GCC country, with about 1.4 billion cups of coffee poured per day, according to the International Coffee Organisation (ICO). Click to Tweet!  “Even when times are hard, people still drink coffee,” said Jose Settee, head of operations at the ICO. Nespresso, the single-portion coffee brand owned by Nestlé, recently said the Middle East is “its future”, the UAE being the initial focus.

Real Consumer Expenditure on Coffee, Tea and Cocoa in the UAE: 2009 - 2012

2

Source: Euromonitor International from national statistics/Eurostat/UN/OECD

Note: Data for 2012 is forecast. Historical and forecast data based on constant prices and fixed 2011 exchange rates.

A taste of home for Abu Dhabi's expatriates

British expatriates missing a taste of home can get their fix at Abu Dhabi's first Waitrose supermarket which opened in July. "It's long overdue - Abu Dhabi is a multicultural city," said British expatriate Sarah Gaye, a media librarian. "It will be interesting if they maintain the healthy organic concept here." With reduced consumption in Europe, the UAE will see an influx of British brands such as Marks & Spencer, Tesco, Mothercare and House of Fraser in the next twelve months.

Back to simpler needs for Israeli shoppers

It seems that last summer's social protests have revolutionised Israeli consumer shopping habits; consumers are no longer drawn to brands as much. A study involving 800 people conducted in May by Superbrands, a UK-based organisation that provides opinions on branding, reveals that 36.3% now chooses to buy generic products more often, while 19.4% have completely stopped buying brand name goods. However, when it comes to fashion, alcohol, cigarettes, cosmetics, baby food and health products, consumers are still willing to pay more for brands. Meanwhile, it has been observed that Israeli supermarkets are stepping up efforts to promote store-brand products with increased offerings and placement prominence.

 

 


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