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October 15, 2014

Apple Pay to Open New Era for Digital Payments in the UAE

Kinda ChebibAnalyst Insight by Kinda Chebib - Senior Research Analyst

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While American consumers will get their first taste of Apple's new e-wallet service in October 2014, SMEs in the United Arab Emirates (UAE) will be keeping a close watch as Apple Pay heads towards the US market. Leading Middle East and North Africa in e-commerce, the UAE Government is implementing Smart Initiatives and reorganising its banking and mobile sectors’ strategies in order to maximise opportunities offered by contactless technology. More recently, the eBay-PayPal split is expected to benefit further Apple’s new digital wallet as eBay is likely to start accepting Apple Pay as a possible replacement for PayPal.


Source: Apple Inc

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The Underlying Potential of the MENA Region in Fragrances

Nicholas MicallefAnalyst Insight by Nicholas Micallef - Beauty and Personal Care Analyst

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The MENA remains a region facing political and macroeconomic hurdles; however, one area where local consumers do not seem to compromise is on fragrances. The use of scent in this region is prolific and is deeply ingrained within society’s traditions and lifestyle. In light of this, despite the region’s challenges, there are promising opportunities for fragrances in terms of olfactory creations and market prospects that are based on shared cultural heritage.

The MENA region is home to over 438 million consumers with 40% of the population aged below 20, whereas 60% live in urban zones. In 2013, fragrances’ sales in MENA amounted to US$2.9 billion, whilst over 2013-2018, fragrances is expected to increase by US$1.3 billion, thus raising the region’s proportion of the global market from 6% in 2013 to 9% in 2018. The top contributors in 2013 were Saudi Arabia, UAE, Israel and Iran, representing 78% of MENA sales rising to 80% in 2018. The fragrance per capita spend is projected to reach US$8.8 in 2018, higher than the global average of US$6.8.

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October 12, 2014

Consumer Lifestyles in Pakistan: Consumers Clamour for US-Style Fast Food

Jennifer ElsterAnalyst Insight by Jennifer Elster - Consumer Lifestyles Manager

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It is safe to say that, in recent years, political relations between the governments of the United States and Pakistan have been characterised by mutual feelings of mistrust, fuelled by numerous incendiary statements and high-tension incidents. Despite this, however, it appears that hungry diners in both countries have put aside whatever differences and doubts the politicians may have and have instead forged a bilateral approach to consuming American-style burgers and chicken. Indeed, Pakistani consumers have crowned US branded fast food king in major cities from Karachi to Lahore.

In a recent report on dawn.com, Samiullah Mohabbat, who recently brought the US franchise Fatburger to Karachi, said that when it comes to fast food, “American is best,” adding that his US$5.50 burger is the “perfect antidote” to the country’s troubles. “Food is the only entertainment in Pakistan,” he said. “People are certainly frightened because of the law and order situation, so they don't go anywhere except food outlets”.

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September 30, 2014

Top Five Soft and Hot Drinks Trends in the Middle East and North Africa

250_top5BevTrends-v1.0Overall, the MENA region will see growth in healthy drinks categories across the soft drinks industry thanks to campaigns led by the ministries of health in several countries, warning the population about the danger of carbonated, sugary drinks. Key players within the soft and hot drinks market are also being adventurous in terms of packaging innovations which is driving sales in struggling economies within the region.


Trends Highlighted in the E-Book Include :

Healthy drinks have seen increased popularity in Saudi Arabia, UAE, Iran, Morocco, Tunisia and Algeria due to an increasing interest in a healthy lifestyle in the region. Also, with the growing concerns over the quality of tap water in Tunisia and Iran, Euromonitor has seen demand for bottled water. Additionally, low calorie carbonates and non-carbonates are growing with a rapid pace in the region as consumers face growing concerns about obesity.

Energy drinks are still very popular in markets such as Saudi Arabia, Tunisia and Algeria. Due to the ban of alcohol in Saudi Arabia, energy drinks are often seen as a ‘substitute’ leisure drink due to its high caffeine content. In Tunisia and Algeria, domestic brand strategy is focused on providing energy drinks at lower price points and consumers are still likely to purchase these products despite the health warnings, thus energy drinks are the big winners with growth in both volume and value.

Packaging in the MENA region is seeing new innovation through product development and environmentally friendly bottle design.  Slim cans, mainly used for ‘trendy’ energy drinks have successfully changed the look of the carbonates market in 2014. Furthermore, Saudi’s growing demand for convenience has led to an increase demand for impulse single serve consumption drinks. The model of small juice ‘on the go’ was also adopted by key players in Morocco and Algeria.

September 27, 2014

Is Internet Retailing Finally Having its Day in the UAE?

Karen Van DiesenAnalyst Insight by Karen Van Diesen - Research Analyst

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Bricks and mortar retailers in the UAE have long been in denial about the internet being a viable threat to their businesses. But, as the rising growth of this channel in recent years has illustrated, internet retailing is not only making its mark, it is here to stay.

With all the mall extensions in the UAE, one can be forgiven for not thinking internet retailing has much potential in the country. The strong shopping culture, challenging logistics and a weak investment climate for online retailers have all posed a strong hurdle, hindering the channel from really taking off. In recent years, however, e-commerce players have been making strong headway in overcoming these barriers. Euromonitor International’s growth figures show the channel has tripled in size over the past five years, with sales reaching AED2.0 billion in 2014. And, the future of internet retailing also looks bright, with an expected constant value CAGR of 38% between 2014 and 2019.

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September 25, 2014

Dog Owners Fighting an Uphill Battle in the UAE

Damian ShoreAnalyst Insight by Damian Shore - Contributing Analyst

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The United Arab Emirates (UAE) has a small, but rapidly expanding, pet care market, although rising tensions between locals and dog-loving expatriates are threatening to put a brake on growth. However, this also represents an opportunity to boost sales of pet services and products.

Annual pet care sales approaching US$100 million

The UAE pet care market was worth US$94 million in 2013, having exhibited a real CAGR of 7% on 2008. The proportion of households with a cat rose from 7% to 8% over this period, while the proportion with a dog increased from 5% to 6%. As in many other Muslim countries, dogs are regarded as ‘haram’ (unclean) in the UAE. However, expatriates (many of whom are non-Muslims and from societies where pets in general, and dogs in particular, are increasingly indulged) significantly outnumber locals; according to one estimate, last year, they accounted for almost 90% of the local population.

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September 19, 2014

In Battle for Pakistani Youth, Coca-Cola Gains Share by Cultivating Local Stars

JonasFelicianoAnalyst Insight by Jonas Feliciano - Senior Beverages Analyst

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The Coca-Cola Co and PepsiCo have long battled for supremacy in cola carbonates, both in the US and abroad. While the domestic battle has reached a ceasefire amidst declining volumes for both companies, growing demand for cola carbonates in Pakistan has reignited the rivalry in this country. Marketing to younger consumers has long been a best practice in growing brands – and both Coca-Cola and Pepsi have a long history of tapping into both global and domestic artists to appeal to this demographic. But the support of grass roots artists in countries like Pakistan is becoming increasingly important as these consumers embrace Coke and Pepsi, not as Western brands, but as global brands with a local flair.

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September 17, 2014

Businesses in Asia Catering to Halal Tourism

With many Asian governments encouraging inbound tourism from the Middle East, businesses in the region are figuring out ways to attract these consumers. Tour operators are organizing packages around Muslim holidays lead by Muslim guides and including visits to mosques in addition to other notable destinations. Local spas, gyms, hospitals, and restaurants are also building new facilities in accordance with Halal requirements.

Video features Emil Fazira Kamari - Research Analyst

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September 6, 2014

Special Report: Rising Geopolitical Tensions Counter Ample Oil Supplies and Impact Global Prices

160936622An escalation of geopolitical tensions in the Middle East, Libya and Ukraine will continue to add risks to the global oil markets, although oil prices have been largely stable since 2013, owing to a glut in supplies and a weaker-than-expected growth in demand. Global oil prices are an important economic indicator for businesses and consumers, as it affects inflation, households’ purchasing power, and industry’s production costs, thus having far-reaching implications for economic growth prospects.



Key points 

  • Regional political unrests have been on the rise since early 2014, with growing tensions from Iraq, Syria, the Gaza strip, Libya and between Russia and Ukraine. This will fuel the risk of disruptions in global oil supplies, as the Middle East and Russia are among the world’s largest oil producing countries/regions. The Middle East made up about one-third of global total oil production in 2013, according to BP Amoco; 

  • Nevertheless, global oil prices have remained subdued in the first half of 2014, driven by rising production and flat oil demand. The average spot price of Europe Brent crude oil stood at US$107 per barrel in July 2014, representing a month-on-month decline of 4.4%; 

  • The USA’s oil production capacity rose to 10.0 million barrels per day in 2013, soaring by 47.5% since 2008, due to a surge in shale oil extraction. Saudi Arabia is also extracting more oil to offset shortfalls caused by production disruptions in some countries in the region. Meanwhile, growth in oil demand has slowed, as a result of weaker-than-expected economic data from the eurozone and the USA in the first half of 2014; 

  • However, the outlook for global oil prices in the short term will continue to depend largely on geopolitical situations in the Middle East, North Africa and Ukraine, as well as on growth in global oil demand. A spike in global oil prices will affect economic growth prospects, reducing consumers’ purchasing power and putting downward pressure on company profits.    

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September 3, 2014

Saudi Arabia Thrives from a Growing Retail Industry

Fatemah SherifAnalyst Insight by Fatemah Sherif - Senior Research Analyst

The retail market in Saudi Arabia has become a strong focus for the government, primarily driven by a desire to boost and maintain ongoing economic success in the country.  The Saudi Arabian retailing market was worth SAR374 billion in 2013, 12% growth from the previous year, according to Euromonitor International.  A large part of this interest comes from the government’s desire to diversify beyond the oil industry. This is seen as a means to reduce unemployment and increase average disposable income.  Already, better living conditions and higher income levels are having a positive impact on retailing.

Tourism Drives Retailing

One key factor is tourism, primarily religious tourism, as Makkah, the birthplace of the prophet Muhammad, is considered the holiest city in the religion of Islam.  International arrivals increased in 2013, reaching 18 million trips, following the massive expansion of projects at the holy mosques in Makkah, which has expanded its capacity for visitors. Furthermore, the Ministry of Haj recently gave approval to 62 travel companies to offer low-cost Hajj (pilgrimage) packages, following strong demand.  As a result, the program was expanded to accommodate 41,000 pilgrims in 2014, up from 17,000 the previous year.  Moreover, the Saudi Commission for Tourism and Antiquities (SCTA) is trying to drive tourism by deregulating air travel by breaking the monopoly of Saudi Arabian Airlines, inviting local and foreign airlines to operate in the country.

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Recent Posts

Apple Pay to Open New Era for Digital Payments in the UAE

The Underlying Potential of the MENA Region in Fragrances

Consumer Lifestyles in Pakistan: Consumers Clamour for US-Style Fast Food

Top Five Soft and Hot Drinks Trends in the Middle East and North Africa

Is Internet Retailing Finally Having its Day in the UAE?

Dog Owners Fighting an Uphill Battle in the UAE

In Battle for Pakistani Youth, Coca-Cola Gains Share by Cultivating Local Stars

Businesses in Asia Catering to Halal Tourism

Special Report: Rising Geopolitical Tensions Counter Ample Oil Supplies and Impact Global Prices

Saudi Arabia Thrives from a Growing Retail Industry