Health, wellness and environmental responsibility remain key purchase drivers for UAE consumers amid cost-of-living challenges

27-May-2024 - Last updated on 27-May-2024 at 01:29 GMT

How brands can navigate the changes in spending choices that UAE consumers are making. ©Getty Images

Related tags Uae Consumer trends Health and wellness

Brands should adapt their offerings and messaging to better address the demands of UAE consumers, as health, wellness and ESG practices remain key purchase drivers despite rising cost of living, new data reports.

In January, market research firm Toluna conducted over 16,000 interviews with consumers across 20 global markets, including 500 from the UAE.

Based on the findings, 69% of UAE consumers said that the energy crisis and rising cost of living are impacting their expenditure planning, compared to 66% of global consumers.

However, 42% of them are confident about spending money in the coming months, an increase of 4% from the previous report in September 2023, which spells elevated consumer optimism.

It was also found that the top products UAE consumers would not cut back on are groceries (29%), personal care and hygiene products (21%), and everyday healthcare products (21%).

Conversely, they are inclined to reduce expenses on luxury products or services (37%), vacations and holidays (23%), and going out to eat or drink (21%).

In addition, 34% of them tried to decrease their spending, such as for gifts and social activities, during the December holiday season compared to previous years.

“While most consumers bought brands and products they knew, younger consumers (aged between 18 to 44) were more likely to try new items over the festive period,” the report stated.

Categories where consumers tried new products include sweet treats like desserts and cakes, as well as savoury snacks.

As 63% of UAE consumers said that cost-of-living challenges are affecting their health and well-being, compared to 53% in the APAC-MENA region, health and wellness continue to be an important purchase driver.

Their efforts to “focus more on health and well-being” include eating more heathy food, choosing vegetarian or vegan options, taking vitamins or other dietary supplements, and drinking low- or non-alcoholic beverages.

Notably, three in four respondents globally believe that food and drink brands should offer a wider range of healthy options. They also expect companies to provide “better information” on the health and well-being benefits of their products.

Eighty percent of all surveyed consumers also expressed their wish to see greater availability of healthy foods and drinks in stores, and that they are looking for more cost-effective health, wellness and fitness solutions.

Furthermore, 70% are buying cheaper or more supermarket-branded health and wellness products, 69% would like to make healthier choices but cannot afford to, and 66% think that brands are not doing enough to help them make healthier choices.

These findings highlight gaps and opportunities for companies to offer products that “demonstrate empathy” and are suited for consumers with different tiers of spending power.

“Brands should focus on communicating value. In sectors where products may be perceived as a reward or indulgent, there needs to be value messaging alongside more emotional self-fulfilment cues.”

Emphasis on ESG

Social and environmental responsibility remains crucial for brands, as consumers are paying close attention to this aspect despite the current economic climate.

In this report, 34% of UAE respondents said that it has become more important for brands to be socially and environmentally responsible, while 53% shared that it is equally important as before.

In fact, 76% of them would “go out of their way” to engage with brands that align with their values, and 81% have started using a brand or used it more because of its positive environmental and social activities.

On the other hand, 77% would stop using a brand due to negative activities.

Additionally, a significant number of UAE consumers want to choose brands based on environmental and social factors, but do not have sufficient information or cannot afford to.

To address these demands, there is a need for companies to implement “believable” and transparent environmental, social, and governance (ESG) policies, and commit to environmentally friendly practices, such as reducing use of plastic and packaging.

“Companies are expected to do the right thing — this stretches across the value, wellness and ESG spectrum. Being able to balance these elements while retaining brand values and personality will support differentiation and stand out.”