Business | Investment
The usual cycle that consumers go through
UAE buyers accept realities of the economic downturn to prioritise their spending.
- By Cleofe Maceda, Staff Reporter
- Published: 23:51 July 3, 2009
Whether or not overall consumer spending in the UAE has also increased is unclear. But it is likely that residents here are "re-prioritising" their expenses.
"There is greater consciousness about health. We have seen increased spends on beauty treatments, health, gym memberships. This is driven more by consumers questioning their spending habits and re-prioritising. There is also some element of rewarding themselves in face of challenges and other difficulties, so if they have cancelled a vacation or a major purchase, they might make up by going to the spa as a treat," explains Himanshu Vashishtha, Nielsen's consumer research director for Middle East, North Africa and Pakistan.
Vashishtha explains that consumers typically go through several phases in times of recession. In most cases, they usually go through the denial stage, then move on to anger, bargaining, depression, and later to acceptance and action. In some markets, consumers might not go through all the phases and the duration of each phase varies.
Vashishtha observes consumers in the UAE seemed to have spent a relatively long time in the denial phase and then quickly moved to bargaining and acceptance. Like the UK market, it looks like consumers in the UAE have accepted the reality of the economic recession and are now moving into the action phase.
"They now know how they will live in the new reality. So, instead of cutting down blindly, they could have now understood how they will live in the new reality and having understood that, they are buying what they will need when they get a good deal," Vashishtha says.
About 44 per cent of the customers in the UAE remain sensitive to price increases in basic commodities.
These consumers prioritise buying only the essentials and constantly look for promotions. Many are still looking at reducing their expenses in other areas, such as outdoor entertainment, as a result, there is an increase in socialising at home, Vashishtha adds.
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