A new, digitally-savvy generation of young consumers is changing Saudi Arabia’s retail landscape

Imad Matar Transaction Services Leader, PwC Middle East 12 September, 2021

Our latest research highlights the increasing importance of mobile phone shopping, which has been reinforced by COVID-19

How far has the pandemic affected consumer behaviour and attitudes in Saudi Arabia? It’s a critical question for retailers, suppliers, advertisers and investors. The results of two surveys conducted last autumn and this spring help to provide some answers.

The data was gathered as part of PwC’s latest Global Consumer Insights Survey. What’s clear is that while the impact of COVID-19 on society and the economy has been broadly similar in Saudi Arabia, the UAE and Egypt – the three countries we surveyed in the Middle East – consumer activity in Saudi Arabia has retained some distinct characteristics.

The irresistible rise of mobile phone shopping

Across the Middle East, COVID-19 lockdowns and social distancing rules have accelerated the pre-pandemic shift towards increased use of online retail channels. Saudi Arabia’s consumers reflect this trend, with 68% indicating that they have become more digital during the pandemic. A substantial majority of Saudi respondents in both the autumn and spring surveys also report that they have shopped exclusively or more online over the previous six months across a range of product categories. More specifically, in the most recent results, fashion (65%), health & beauty (54%) and consumer electronics (53%) saw the biggest increase in the number of consumers shopping exclusively or more online.

Against this background, the rise of mobile phone shopping in Saudi Arabia is especially striking. The proportion of respondents in the Kingdom who said they had used their smartphone at least once a week for shopping over the previous year increased from 33% in our last pre-pandemic survey to 45% by March 2021. The most recent data for mobile phone shopping is in line with the UAE (48%) and Egypt (49%), where the growth of this retail channel is also being driven by a younger, digitally-savvy generation who use their phones as a multi-purpose social, consumer and professional portal.

However, Saudi Arabia’s shoppers differed from their regional counterparts during last year’s first COVID-19 wave in remaining more strongly attached to visiting physical stores on a regular basis. In November 2020, 56% of Saudi respondents said they had bought products other than groceries in bricks-and-mortar shops at least once a week over the past 12 months, a noticeably higher proportion than in the UAE (42%) or Egypt (40%). This relative willingness by Saudi Arabian consumers to shop in person at the height of the pandemic appears to reflect public confidence in the measures taken by the government to contain the virus. By March 2021, respondents in the UAE (51%) and Egypt (57%) had largely closed the gap with Saudi Arabian shoppers (59%) in citing physical stores as their most frequently used retail channel, indicating that consumer confidence in these countries had caught up with the Kingdom.

Wellness, ethics and the environment – the new face of consumer culture

Our Middle East findings confirm that the region’s youthful consumers, concentrated in the 18-to-35 age range, place a high emphasis on ethical, social and environmental issues when choosing where and what to buy. Young shoppers in Saudi Arabia are part of this trend, providing additional momentum to Vision 2030 programmes such as Quality of Life and Health Transformation.

COVID-19 appears to have intensified health awareness especially strongly among Saudi respondents. In March 2021, 79% said they had become healthier during the past six months, markedly higher than the equivalent figures in UAE (68%) and Egypt (68%). Meanwhile, 26% of Saudi Arabian consumers planned to spend more on sports and fitness equipment in the next six months, and 38% expected to buy more health & beauty products.

Yet it would be wrong to conclude from this data that the typical young, urban consumer in Saudi Arabia is only concerned about their personal wellbeing. They also care about the wider world. Ethical practices such as fair trade, cruelty-free product testing and decent workplace conditions are ranked third by Saudi respondents among the attributes that determine their loyalty to a brand.

High ethical and environmental standards must therefore become a priority for Saudi Arabia’s retailers too. For example, 71% of the March respondents for the Kingdom said that they intentionally bought items with eco-friendly or less packaging; 72% purchased from companies which were supportive of the environment; and 74% checked product labels for sustainability certifications.

Clearly, the rising generation of young Saudi Arabian consumers have the same global concerns for the future of the planet as their peers worldwide. This seems a positive starting point for a healthy, sustainable consumer economy in every sense, as Saudi Arabia emerges from the pandemic into a new period of transformation.