When looking at the spending habits of consumers around the Middle East, American Express Middle East have become the ultimate expert.
Thanks to its unique ‘closed loop network’ business model, they share strong and trusted relationships with Cardmembers, Merchants and Businesses, giving the company a deeper understanding on how consumers are spending and what they’re prioritising. So when it comes to consumer insights, their Spending Habits study is a must read for those who follow such matters.
Conducted by independent research company GfK, who quizzed financial decision makers in households in six countries–UAE, Oman, Qatar, Bahrain Kuwait and Lebanon–the survey asked a range of questions to gain insight on consumer spending priorities with respect to both essential purchases and luxury spends. All respondents have been living in their respective countries for a period of six months or more, with age profiles ranging from 24 to 55 years of age with annual household incomes of at least $75,000.
A number of key trends emerged from this ranging from the levels of money consumers were willing to save compared to what they will spend on necessities and luxuries, including preferred travel destinations, attitudes to online versus instore shopping and spends on everyday items.
For example, the top three rated spending categories areas across the region were Travel (31 per cent), Fashion (15 per cent) and new entrant Home Furnishings (15 per cent) in 2017. People from UAE and Lebanon topped the rankings with averages of $1,900 and $1,600 respectively, while people from Kuwait showed the lowest average spend of $366 on luxury purchases.
With regards to life’s essential expenses, the top three domestic categories were Transport (42 per cent), Household Costs (42 per cent) and Health and Wellbeing (39 per cent), while the top three categories with monitored spending were Rent or Mortgage Costs (85 per cent), Household Maintenance Expenses (73 per cent) and Insurances (72 per cent). Lebanon had the highest average rates at $5,000, closely followed by the UAE at $4,400. Those surveyed in Oman showed the lowest average spending volume on necessities at $1,000.
And although there has been a gradual shift towards shopping online in the region, when it comes to prioritising, consumers still very much prefer the in-store experience, with an average of 77 per cent of respondents across the region stating they still prefer visiting the major shopping malls and departments stores. The UAE not surprisingly showed the most affection for the big mall experience with 80 per cent of respondents preferring to purchase goods in person.
So while the American Express Spending Habits survey has shown some diverse and insightful themes with regards to how consumers within the Middle East prioritise their spending, the central balancing relationship between spend on ‘luxuries’ and necessities’ remains as important as ever in consumers’ overall behaviour.