Nine out of 10 residents in the Gulf are “optimistic” about their future, according to a new survey by Boston Consulting Group (BCG).
This level of optimism among consumers in the six Gulf Cooperation Council nations is the highest score recorded in any of BCG's recent consumer surveys conducted globally, the firm said, and compares favourably with other emerging markets. For instance, optimism in Africa stands at 86 per cent, in Brazil it is 68 per cent and in Russia it is 55 per cent.
“GCC countries have a strong cohort of wealth … with consumer sentiment and optimism levels ranking very high by most world standards,” said Rami Rafih, managing director and partner at BCG Middle East.
The BCG survey involved interviews with 7,000 respondents split almost equally between local residents and foreign nationals.
The report said the GCC is “increasingly on the radar of companies” that are looking at expansion due to the spending power of consumers, the region’s young population and high levels of internet penetration. Strong levels of optimism also underline opportunities for e-commerce and tourism companies, the BCG report found.
“Tapping into the region’s vast potential will become a priority for many e-commerce and tourism companies in the future,” Mr Rafih said.
More than 70 per cent of consumers have made at least one online purchase in the last 12 months and half of the respondents plan to increase their online purchases next year, the report said.
However, e-commerce still makes up a small fraction of overall sales in the GCC, opening prospects for new businesses. The UAE is the most active e-commerce country, for instance, but e-commerce only accounts for around 4 per cent of all retail sales.
“There are opportunities for e-retailers to expand their footprint as the sector eyes a potential boom period,” said Markus Massi, managing director and senior partner at BCG Middle East.
E-retailers will need to influence consumers to build “trust for online payment methods, enhance the end-to-end e-commerce experience and persuade people who have never shopped online”, added Mr Massi.
Despite the slow uptake of e-commerce, consumer resistance to online purchases isn’t apparent when it comes to travel planning.
In the Gulf, 54 per cent of all consumers book their trips online, with bookings made through travel agencies representing only 25 per cent of the total.
The internet is one of the top three buying influences in every country except Oman, with people in Kuwait (92 per cent) and Bahrain (88 per cent) especially likely to turn to it in the course of making a purchase, the report said.
The two other sources of influence that remain important are recommendations from friends and family and in-store displays and promotions.
The GCC is also a brand-aware region. Nearly three-quarters of respondents believe that brands say something about their values and who they are.