As Gulf economies navigate inflation pressures, evolving consumer expectations, and rapid digital transformation, brands are being forced to rethink how they price, position, and distribute their products. In this interview, Andrey Dvoychenkov, General Manager for Arabian Peninsula and Pakistan at NielsenIQ, explains why the UAE and Saudi Arabia are not witnessing different consumer mindsets but rather the same value-seeking shopper adapting to local realities. From the growing divide between value and premium brands to the rise of e-commerce as a growth engine, and from changing snacking habits to more deal-intelligent consumers, he outlines the key shifts shaping the future of retail and brand strategy in the Gulf.
The UAE is growing on consumption, and Saudi is under price pressure, yet both markets show resilience. Are we looking at two different consumer psychologies emerging in the Gulf, or the same consumer reacting differently to local realities?
I don’t think we can really call it two different psychologies because we see similarities between markets when it comes to pricing. We know from NIQ’s latest Consumer Outlook survey that seeking value for money is a key saving strategy in the region, but we can see “premiumization” is balancing the value demand in the UAE more, which is leading to higher value growth. Having a much more diverse expat population with smaller families and tourism-related factors also plays a role in this compared to KSA. Having said that, premium-priced brands in Saudi are still quite big and growing. There are still double-digit growing brands in KSA as they communicate their additional value to the consumers by focusing on attributes that matter to consumers the most. Who is at most risk? Both undifferentiated mid-priced brands where the consumer can’t clearly say “why pay more than value?” and mid-tier brands that rely on continuous discounting to keep moving, because promo efficiency is softening.
The data shows a clear squeeze: value is rising, premium is outperforming, and the middle is under pressure. Is the mid-tier brand model structurally broken in the Gulf, and who is most at risk?
It is true that the pricing landscape is getting more polarized towards low and high. However, we also need to highlight that the mid-tier is still the biggest group. I don’t think the mid-tier brand model is broken, and there will always be a demand for mid-tier brands, but manufacturers need to have a balanced portfolio to address evolving consumer demands towards both value as well as premium. In my view, it is more like a balancing act rather than a complete shift.
Seventy percent of UAE shoppers say they’re willing to pay more for quality. In real behavioral terms, what does “quality” translate to at the shelf: brand trust, innovation, origin, health cues, status?
Quality is a subjective and relative term. Each person’s quality description can be slightly different. Yet usually consumers consider quality if any of the following conditions are met: “a brand that they can trust,” “better ingredients,” “manufactured by a well-known brand/retailer,” “a brand that offers attributes that matter the most.”
E-commerce is now the fastest growth driver across both FMCG and Tech & Durables. Has digital finally moved from being a convenience channel to being the strategic growth engine, or is it still overly dependent on discount cycles?
E-commerce has been the fastest-growing channel for a few years now, and we believe it will continue to be so in the next few years for sure. The UAE started this journey slightly sooner than KSA and is hence a bit ahead. As per NIQ’s perspective, UAE FMCG has moved to the 3rd phase of e-commerce, which is the omni-shopping experience. In this phase, dependency on discounts is not expected to be the main driver. While we know Middle East consumers will always be price-conscious, it doesn’t mean they will act differently for any channel. It is now time to provide the experience to consumers in both the offline and online worlds. As Middle East consumers also look for convenience, e-commerce will utilize that advantage to be the growth engine.
Snacking in the UAE and pet care in Saudi are leading growth. Are these just category wins or signals of deeper lifestyle and demographic shifts brands should be reading more carefully?
Snacking is one of the fastest-growing industries globally as well. It is the #1 fastest-growing in the UAE but also #2 in KSA. More importantly, snacking was within the top three last year as well, which means there is no low-base effect from last year. That indicates a strong consumer preference shift towards snacking in the long term. Pet care, on the other hand, is growing from a low base from the past, and we don’t think it will stay so in the long term.
Tech & Durables significantly outpaced FMCG, especially in KSA. Does that suggest rising confidence and discretionary spending, or are we seeing promotional distortion driven by mega sales moments?
Tech & Durables outgrew FMCG (FY2025: Saudi +13.7%; UAE +6.3%) – this indicates clear consumer confidence and willingness to spend enough to purchase goods from product categories where the average ticket is higher, plus the continued significant importance of promotional events driving the market during peak periods. This is more visible for T&D categories, where aspirational purchases drive more revenue simply through the higher average check size.
Are Gulf consumers becoming more deal-intelligent and harder to impress with simple price cuts?
Gulf consumers have always been price-conscious and in value-for-money seeking mode. As technology and AI evolve, it is much easier for them to compare prices between different sellers. This might bring some challenges in impressing them with simple price cuts if there are better deals. However, looking for value for their money does not always mean they will go for the deepest price discount. Gulf consumers are still willing to pay more for attributes that matter to them the most. Therefore, if Brand A positions its pricing even slightly lower than Brand B while Brand A remains super-premium, it can work very well as long as the product addresses a need.
With online shelves effectively infinite, how should brands think about visibility and discoverability in 2026? Is distribution still power, or is algorithmic presence the new battleground?
Distribution and availability will always remain key KPIs for both online and offline. Online purchases are increasing drastically, but we don’t believe offline shopping will ever die out. Hence, physical availability will always be a very important element in maintaining your base and also bringing in new consumers. “Always available” is the #1 metric for younger generations while they shop online. So, if a brand goes out of stock on an online platform, it impacts brand switching much more than in the offline world. So, distribution in both offline and online is still power.
Major sales events are accelerating online migration. Are they building long-term digital habits or training consumers to delay purchases and eroding full-price equity?
Major events accelerate digital migration during peak seasons, which can build habits (accounts already created, stored payment methods, convenience loops). But they can also make buyers delay their purchases while waiting for a discounted price tag, and consumers are becoming more strategic — shoppers increasingly compare prices, demand transparency, and now use GenAI during year-end sales.
Is the modern Gulf consumer more rational or more emotional today? Are they trading up for aspiration while trading down for practicality, and how should brands balance that paradox?
The majority of consumers in the region are early adopters — they love trying new products and features and feel confident about recommendations provided by AI. Therefore, it is a combination of both, and it depends on seasons and demographics. Rational where the purchase is repeatable and comparable (price-transparent categories, simple-function devices), and emotional where identity, family, hospitality, self-improvement, or visible quality matters. In other words, they trade up where “worth it” quality and aspiration are clear, while trading down for practicality in other cases, which is rational budgeting along with emotional “chosen” splurges.
(Read this interview in the latest CPG issue of Communicate here)
