The Arab Market

What opportunities does UAE’s growing global consumer base offer business owners? Diversity. Diversity of the population means that there are many market opportunities to offer products and services for differing consumer desires and needs.

What are some of these populations? Expatriates make up 80 percent of the population reports HKTDC Research and a United Nations Conference on Trade and Development study believes that these workers will drive the UAE population to 6.1 million by 2020.

International Business

Tourists drive the luxury market in the UAE. Dubai alone welcomed 8.7 million tourists in 2010 and these tourists consider brands symbols of status and success. Dubai ranks third in the world for its concentration of luxury brands according to HKTDC Research and the tourists that visit the UAE to shop come from within the UAE and the Arab world as well as from countries all over the world.

Vijay Mahajan, professor of marketing at the University of Texas, has written “The Arab World Unbound,” which the American Marketing Association named the book of the year in 2007 reports Jeff Haden of Inc.com. This book reveals the marketing potential of Arab consumers: Arab League countries make up the world’s ninth-largest economy in the world today reports Michael Binyon in his book review of Mahajan’s book on Management Today.

More than half the Arab population is under 25 years old and that number is expected to grow. Arab youth want the best global brands in the world.

Arab women are another market force reports Haden. These women are “sophisticated, highly educated, and at the same time very family-oriented.” That makes women the shopping decision-makers, especially in terms of the status brands reflect for themselves and their families. Binyon points out that Arab women have great spending power today: in Saudi Arabia they control $11.9 billion in cash and $2.1 billion in investments.

In 2009, the American University of Dubai studied the diverse populations in Dubai to determine if globalization was creating a homogenous marketplace. What they found was that cultural distinctions remain, that gender, religion and such defining characteristics still influence different ethnic groups and populations in the UAE in terms of their buying habits.

The researchers studied two Western consumer values, materialism and vanity, in order to identify the shopping trends of Arabs and Non-Arabs in Dubai as they related to global exposure. Materialism refers to how important acquiring and possessing material objects are to one’s life and vanity refers to how important physical appearance and social status is.

The study indicated that materialism did not differ between Arabs and Non-Arabs but that Arab consumers are more vain. Arabs care more about their physical appearance than Non-Arabs. The study did not find that gender or nationality influenced materialism but that religion does affect personal rather than general materialism. Muslims have higher degrees of personal materialism than Christians do and also care more about physical appearance and social achievement.

Although Islam doesn’t espouse the acquiring of worldly possessions and it influences every aspect of life, capitalism plays a large role points out Binyon’s review. Muslim religious holidays offer commercial opportunities for business owners as gift-giving and celebrations abound.

The American University of Dubai researchers believe that these cultural differences offer Dubai populations the opportunity to choose cultural identities, that they become consumer-citizens rather than global consumers. Mahajan takes the same view. He urges Western companies to reshape their view of the Arab world as conservative and homogeneous, to consider the diversity of the Arab world while honoring cultural traditions.

This means that no matter what product or service you offer, you can find a market. It also means that customizing your products and services or your marketing plan to accommodate and appeal to different markets can drive up your sales. Another thing to consider, reports HKTDC Research, is income disparity. In 2008, Westerners made almost $50,000 a year; the average UAE national made $30, 790; other Arab citizens earned $18, 529 and Asians earned about $16, 349 a year.

Because more households are earning higher incomes, consumers are spending more on non-essential goods and services reports HKTDC. Housing, communications, health expenditures, hotel use, catering and education spending are all on the rise. Hospitality is one of the biggest markets in Dubai today.

This overview of the Arab marketplace offers you the opportunity to diversify your product or marketing plan or reconsider what niche markets you can break into.

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