Brands expanding to MENA

The Current State of Play

The Middle Eastern market economies are accelerating. The combined regional GDP has scaled 4x between 2002 and 2022, from 979.3 billion USD to 4.5 trillion USD¹. This is in contrast to the slowed global growth following the COVID pandemic beginning in 2020. Stability is largely driven by the Oil and Gas market, with resilience against oil price fluctuations due to low extraction costs. Local governments are focused on diversification to shift away from the historic regional reliance on Oil and Gas. Innovation and digital transformation is their mandate. The Middle East is a global expatriate hub, flooding local industries with innovative ideas and diverse strategies from across the world. The combination of stability, growth and transformation has made the region attractive for international companies to enter the market.

The combined regional GDP has scaled 4x between 2002 and 2022, from 979.3 billion USD to 4.5 trillion USD¹. 

Economic Growth, Wealth and Diversification:
Several countries in the Middle East, particularly in the Gulf Cooperation Council (GCC) region maintain a high GDP per capita and significant spending power. These nations have a clear focus to diversify their economies away from oil dependence. For instance, the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA) are major economic powerhouses with ambitious projects like Saudi Vision 2030² and the UAE's various smart city³ and digital economy initiatives⁴. This shift offers global brands various entry points into emerging industries like technology, tourism, retail, and finance.  

A Young, Tech-Savvy Population:
The Middle East has a growing middle class with increasing purchasing power. This segment of consumers is “becoming increasingly ‘connected’ and mobile, and are not weighed down by legacy”⁵ financial systems. Coupled with a young, and tech-driven population, particularly in countries like the UAE, KSA, and Qatar, the region represents a primed consumer market. OECD reports that over half (55%) of the region’s population is under 30 years of age⁶. This demographic is open to explore global trends and engage with popular brands.

An E-commerce Boom:
The Middle East is experiencing a rapid shift towards e-commerce, which accelerated during the COVID-19 pandemic. Governments are investing heavily in digital infrastructure, and the widespread smartphone and internet penetration make the region an attractive market for e-commerce platforms. Global companies can tap into this trend, especially in retail, technology, and financial services. Online shopping is popular amongst Millennials in the region, with 27% purchasing on social media platforms and 43% using online shopping sites⁷.

The Foreign Investment Incentives:
Governments across the region are actively attracting foreign direct investment (FDI), offering a range of incentives such as free trade zones - allowing fully foreign-owned companies to operate without the usual regulations and bureaucracy. Saudi Arabia's Vision 2030 initiative also prioritizes foreign investment, with a goal to increase FDI from 3.8% to 5.7% of GDP⁸. As part of its D33 agenda, Dubai is committed to becoming “the easiest place to do business”⁹ in the world. This, coupled with tax breaks and simple incorporation, encourages global brands to establish a local presence.“