KHALEEJ TIMES, Wednesday, Feb 01, 2023 | Rajab 10, 1444
Rising consumer confidence set to drive UAE economy
The UAE's consumers are becoming more confident and spending more that
will fuel growth in the economy despite rising inflation and interest rates
worldwide, experts say.
Analysts, corporate executives and business consultancies said the UAE market
stepped up its activities very fast to drive through the impact of the Covid-19
pandemic. They said consumer spending has remained strong throughout the
pandemic period despite volatile global macro-economic environment and similar
trend is expected to continue this year.
Saad Manair, senior partner at Crowe UAE, said the UAE residents are in a better
position than certain other Western countries to manage the effect of inflation,
provided they plan and manage their finance in a proper manner and be modest in
"The UAE consumers have been generally extravagant in their spending, and they
need to be smart in how they deploy their earnings," Manair told Khaleej
Hatem ElSafty, chief executive of Business Link, said the UAE's consumers are
becoming more confident and spending more, fuelling growth in the economy and
signalling a bright future for the country's businesses.
"With more disposable income and a desire for the latest technology and trendy
products, consumers are becoming increasingly willing to spend, boosting the
overall economy," he said.
Pent-up demand continues to shine
In a recent research by leading management consulting firm Kearney, the UAE
consumer spending power remains strong despite concerns about the global
macro-economic environment as they do not expect to reduce their spending over
the next six months.
"While price increases have been noted across most retail categories, about 16
per cent of consumers have reported an increase in spending on non-essential
items compared to 2021. Over half, 56 per cent of the consumers, are planning to
spend on a major household purchase (Dh1,000+) in the next six months,"
according to the research.
Ravi Krishnan, general manager at Ascent Partners, said pent-up demand from
pandemic times continues to shine through.
"Consumers, who embraced e-commerce during the pandemic, continue to make robust
online purchases, while at the same time boosting retail purchases thanks to a
renewed appreciation for brick-and-mortar shopping experiences. This might
explain the strong consumer sentiment even in the context of increasing prices,”
Krishnan told Khaleej
Robust spending power
Sameer K Mohamed, managing director, Jaleel Holdings, said, the global financial
sector challenges have not impacted the UAE economy as much as the rest of the
world due to several reasons.
"Although, prices have increased for almost all products across the market in
the UAE, the spending power of consumers has remained robust due to the increase
in their revenue compared to the consumers in other markets of the world. This
is because the UAE economy has remained stable despite the challenges of the
Covid-19 pandemic. The lives of the residents have not been affected by the
pandemic as it was in other markets with job losses and revenue cuts," Mohamed
"The UAE market stepped up its activities very fast to drive through the impact
of the pandemic while maintaining the standard protocols and gradually easing
the restrictions. In fact, the UAE market leveraged the situation by upping its
game to maintain consumer spending power. This has positively impacted the
economy without major government interference in the market," he added.
Abdul Jebbar, group managing director, Hotpack Global, said consumer spending
has remained strong throughout this current global macro-economic environment
despite the challenges.
"In fact, consumers have accumulated more wealth through the pandemic than
before as they have not had the same opportunities to spend it. One of the ways
retailers took advantage of the increased spending power for consumers is by
adopting an omnichannel model, taking advantage of the rise of e-commerce in
recent years," he said.
"It also enabled retail store expansions, special offers and discount campaigns,
and other channels to reach consumers. Consumers today are also more conscious
of their carbon footprint than before. They are willing to pay a higher premium
for sustainable and eco-friendly products even during the current economic
climate,” Jebbar said.
Jobilal M Vavachan, chief executive of Life Healthcare Group, said the UAE
residents' spending power remained strong in challenging times and they are
still eager to spend more on personal well-being.
“We understand that the lives of consumers in the UAE have remained unaffected
compared to other countries, so the consumer spending has remained strong
despite supply chain concerns. We observe that residents in the UAE are
concerned about their health and well-being and they place immense focus on
their personal well-being and are highly motivated to invest in
self-improvement, whether it is through changes in their lifestyle or other
means," he said.
"At Life Pharmacy, we were able to address the supply chain issues to a large
extent, through proper planning and forecasting. We also absorbed the increase
in costs, so that the end consumer did not have to spend more,” Vavachan