1© Synovate 2008

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HDC Industry Seminar Series 1:

Market Access to the Middle East

Consumer Behavior and

Demographics

-- Kuwait, Saudi Arabia, UAE

June 2nd 2009

Kiranjit Singh

Group Business Director

Synovate Business consulting

© Synovate 2008 3

• In this presentation, we will share a brief profile and insights of the

consumers in Kuwait, Saudi Arabia and the U.A.E.

• We will also make some comparison of these consumers against the

consumers in Malaysia

• It is hope that by the end of this presentation, the audience will get a

surface understanding of the consumer behavior and demographics

in the respective countries

Introduction

© Synovate 2008 4

Middle East and North Africa (MENA)

Every country is unique!

Middle East and North Africa (MENA)

• The MENA region is a large area comprising around 20 countries,

with a population of around 400 million people

• Though the countries have many things in common and are often

grouped together, each market has its own unique characteristics

and tastes

© Synovate 2008 5

Key markets of focus in the Middle East

-- Kuwait, Saudi Arabia and UAE

Population

≈ Market Size

© Synovate 2008 7

Population

Population, 2007 Foreign population

Malaysia

27.7 million

~4% of population

Saudi Arabia

24.2 million

~23% of population

UAE

5.3 million~80% of population

Kuwait

3.4 million~69% of population

Source: EIU, Encarta, Euromonitor, Arabian Business

[Tagline]

© Synovate 2008 8

• A survey by Synovate has revealed that UAE internet users have the second

highest rate of membership of social networking sites (SNS) in the world. UAE was

second only to the Netherlands.

• 46% were members of sites like Facebook. The global average rate of is around

26%.

• The popularity of SNS in the UAE makes sense. It is a place that’s very connected

to the world, has lots of foreigners, and a hub for cultures, business and people.

• Assuming you have determined that many of your target market are, indeed, social

networkers and you know where they can be found, is it worth getting your brand

online?

Yes', but do it quietly... Brands do not want to be overt here!

Everyone is on Facebook!

Demographics

≈ Market Profile

© Synovate 2008 10

Population pyramids[Tagline]

© Synovate 2008 11

Comparison of GDP and GDP per capita

Source: EIU

MalaysiaMalaysia

[Tagline]

© Synovate 2008 12

Disposable income

0

10

20

30

40

50

60

70

UAE Kuwait S Arabia Malaysia

Mean annual disposable income, 2007

(in MYR thousand)

[Tagline]

The working women with high

disposable income are spending

more on cosmetics and beauty

products

© Synovate 2008 13

• The growth of cosmetics and beauty products markets have surgedsignificantly as consumers are increasingly becoming aware aboutappearance, beauty, grooming and choice of personal care products. Notonly women but men are also buying cosmetics and related beautyproducts in the UAE and Gulf countries.

• The demand for various brands, especially herbal cosmetics has surged inthe UAE as customers have become more conscious regarding skin careproducts and moisturising products as the weather conditions in the Gulfharms the skin.

• Consumption of cosmetics and fragrances in the Gulf states is one of thehighest per capita in the world with the average purchase estimated to be inthe region of $334 per head.

Source : Khaleel Times

Everybody wants to look good

What are they

currently buying?

© Synovate 2008 15

Kuwait: Consumer expenditure by product, 2007

Source: Euromonitor

Other soft

drinks

2%

Sugar &

confect ionery

5%

Coffee, tea &

cocoa

3%Other food

3%

Vegetables

18%

Fruit

12%

Bread &

cereals

18%

Fish &

seafood

6%

Meat

22%

Milk, cheese &

eggs

6%

Oils & fats

5%

Total:

KWD 832.1 mn

Misc goods &

services

7%Hotels &

catering

3%

Communicat io

ns

4%

Education

3%

Leisure &

recreat ion

4%

Transport

9%

Health goods

& medical

services

3%

Food & non-

alcoholic

beverages

15%

Clothing &

footwear

9%

Alcoholic

beverages &

tobacco

2%

Housing

25%Household

goods &

services

16%

Total:

KWD 5.7 bn

[Tagline]

© Synovate 2008 16

UAE: Consumer expenditure by product, 2007[Tagline]

Misc goods &

services

6%Hotels &

catering

10%

Communicat io

ns

4%

Education

5%Leisure &

recreat ion

3%

Transport

11%

Health goods

& medical

services

2%

Food & non-

alcoholic

beverages

9%

Clothing &

footwear

6%

Alcoholic

beverages &

tobacco

0%

Housing

38%

Household

goods &

services

6%

Total:

AED 241.0 bn

Other soft

drinks

5%

Sugar &

confect ionery

5%

Coffee, tea &

cocoa

2%

Other food

14%

Vegetables

10%

Fruit

8%

Bread &

cereals

12%

Fish &

seafood

7%

Meat

21%

Milk, cheese &

eggs

13%

Oils & fats

3%

UAE

Total:

AED 22.7 bn

Source: Euromonitor

© Synovate 2008 17

S Arabia: Consumer expenditure by product, 2007[Tagline]

Misc goods &

services

11%Hotels &

catering

4%

Communicat io

ns

3%

Education

3%

Leisure &

recreat ion

8%

Transport

9%

Health goods

& medical

services

3%

Food & non-

alcoholic

beverages

24%

Clothing &

footwear

10%

Alcoholic

beverages &

tobacco

1%

Housing

17%

Household

goods &

services

7%

Total:

SAR 318.7 bn

Other soft

drinks

26%

Sugar &

confect ionery

5%

Coffee, tea &

cocoa

1%

Other food

18%

Vegetables

7%Fruit

3%

Bread &

cereals

10%

Fish &

seafood

6%

Meat

20%

Milk, cheese &

eggs

2%Oils & fats

2%

S ARABIA

Total:

SAR 75.7 bn

Source: Euromonitor

© Synovate 2008 18

Top 5 Malaysian exports to Kuwait, 2008

Others

35%

Margarine &

shortening

30%

Milk, cream

& milk prod

o/ than

butter/

cheese

12%

Fixed veg.

fat , oils,

crude,

refined not

soft

13%

Heating,

cooling eqpmt

& parts

5%

Furniture &

parts,

cushions, etc

5%

Total:

MYR1.25 bn

[Tagline]

Source: MATRADE

© Synovate 2008 19

Top 5 Malaysian exports to UAE, 2008[Tagline]

Others

44%

Gold,

silverware,

jewel & other

precious

material, Nes

28%

Fixed veg.

fat , oils,

crude,

refined not

soft

9%

Television

receivers, etc

12%

Furniture &

parts,

cushions, etc

4%

Veneers,

plywood,

part icle board

& wood,

worked

3%

Total:

MYR12.54 bn

Source: MATRADE

© Synovate 2008 20

Top 5 Malaysian exports to UAE, 2008

Others

68%

Ingots &

other primary

forms of

iron/ steel

8%

Telecomm

eqpmt

parts, Nes

7%

Television

receivers, etc

8%

Copper

5%

Hydrocarbons

, Nes & their

derivat ives

4%

Total:

MYR3.51 bn

[Tagline]

Source: MATRADE

© Synovate 2008 21

Malaysia’s food exports to Middle East

376

163 14513490105 90 115

1,145

Ku

wa

it

UA

E

S A

rabia

Ku

wa

it

UA

E

S A

rabia

Ku

wa

it

UA

E

S A

rabia

Margarine &

shortening

Fixed veg fat, oils,

crude, refined not

soft

Milk, cream & milk

prods o/than

butter/cheese

Exports of selected food products from Malaysia, 2008

(in MYR bn)

Source: MATRADE

Chinese Cheese spreads dominate

the $1.1bn (€0.9bn) processed

cheese market in the (MENA)

region

(Proteus Insight)

What are they

planning to buy?

© Synovate 2008 23

Purchase intentions [Tagline]

Source: MasterCard Worldwide Insights survey

Fashion &

accessories

Dining &

entertaining

Fitness &

wellness

Personal

travel

Consumer

electronics

Car Motorcycle Renovation

& property

Continuing

education

Children’s

education

Egypt 22% 58% 11% 12% 13% 14% 9% 28% 47% 70%

Kuwait 23% 58% 27% 9% 47% 57% 7% 52% 46% 64%

Lebanon 33% 66% 20% 10% 26% 37% 4% 47% 53% 63%

Qatar 32% 22% 19% 14% 15% 4% 1% 9% 0% 33%

S Arabia 35% 91% 21% 14% 26% 49% 3% 59% 0% 70%

UAE 67% 64% 40% 49% 23% 43% 5% 69% 33% 60%

Percentage of respondents that plan to purchase various types of

goods/services in the next 12 months, 1Q 2009

© Synovate 2008 24

Everybody wants to feel good!

• Synovate recent study indicates people in Dubai and surrounds seem to

throw everything at any weight gain.

• "The UAE is an expat-heavy population and moving here leads to weight

gain for many expats. Here it is famously known as the 'Dubai stone'.

• "Several factors contribute to this: lack of movement (there's practically no

walking in Dubai), easy access to outside food (the large majority tend to

eat out more than at home), high sugar intake (the Middle East has a very

sweet tooth, carbonated drinks are even sweeter here, sugar is present in

most fresh juices and so on).

• "When they realise what has happened, many expatriates tend to take

multiple measures to go back to their original weight."

© Synovate 2008 25

Everybody wants to be healthy

• Synovate Study also points out almost one in three people in the GCC have

experienced some health problems linked to allergies, with respiratory

ailments ranging on top, with dust in the region and poor air quality in

homes and offices identified as the leading risk factors.

• More than 90 per cent of participants stated that health was one of their

biggest concerns today, and that they have experienced more health-

related problems over the past 12 months.

• Diseases related to respiratory, skin and nutrition were rated as most

common across the region.

© Synovate 2008 26

Everybody wants to be healthy (cont’d)

• With a young population and increasing demand for a wider variety of soft

drinks, the Middle East represents a strong growth opportunity for soft

drinks .

• While carbonates are the most popular soft drinks in many countries,

bottled water and 100% fruit/vegetable juice sectors as the key growth

categories over the next few years*.

• Driven by the health and wellness trend, all domestic markets in the region

have recorded rising consumption of bottled water.

• As 100% juice continues to be marketed as more nutritious than juice

drinks this category is expected to overtake juice drinks in the short term.

* Source: Euromonitor

© Synovate 2008 27

19% of UAE respondents battle the

bulge with herbs or supplements

Low fat foods are also popular in the

UAE, 44% respectively saying they buy

them.

Respondents from Saudi Arabia

appeared most likely to choose low fat

food products as a way to shed pounds,

with 60% saying they opt for this method.

However, consumers in the region do

enjoy fast food every once in a while. In a

recent survey of the region's informal eat

out market, McDonald's as the region's

favorite fast food restaurant for the

second consecutive year

Consumer survey results

Knowledge is Key

© Synovate 2008 29

The secret to growth is knowing the ground!

• To market successfully a product or service in the Middle East , one must

have a firm grasp of the market one intends to enter.

• With much of the global industrial expansion and promotion now focused

on the Middle East, from marketing of cosmetics, food and beverage, and

health care products, the competition in very high.

• Almost all countries, be it Muslim or non- Muslim countries, are beefing up

their Halal product portfolio in order to be successful in the Middle East.

• As such, prior to entering any market, one must conduct a through Market

Study.

• A solid business is built on a deep foundation of knowledge.

© Synovate 2008 30

How we do It – Path To Growth™

© Synovate 2008 31

Yes, You Can !

• Middle Eastern economies have been on a high-growth curve for the

past five years

• If you’ve done the right research, know your Middle Eastern markets,

and have a dedicated local team to ensure success, the region

could be fertile ground thanks to its booming economy.

© Synovate 2008 32

Q&A Session