Saudi consumers more inclined to purchase local food products, says survey
Saudi consumers more inclined to purchase local food products, says survey
The survey conducted by Nielsen showed 69 percent people preferred local brands of dairy products, which is higher than the global average of 54 percent.
Consumers are also more inclined to opt for a locally manufactured product over a global brand in categories such as mineral and bottled water (33 percent) and biscuits, chips and snacks (33 percent).
The Saudi consumers also displayed a much stronger preference for local brands of tea and coffee (32 percent) compared to the global average.
For perishable goods like fresh fruit, vegetables, confectionery items, meat and seafood, consumers in Saudi Arabia like to rely on their neighborhood stores rather than supermarkets or hypermarkets.
However, when it comes to baby products, personal care products and carbonated beverages, Saudi consumers prefer global brands. For vitamins or dietary supplements and pet food, only 7 percent and 8 percent respectively said they preferred local brands.
Other categories where global brands are a clear favorite are in the non-food items, where consumers’ preference for local brands is below one in five for baby wipes, diapers (14 percent) and personal care and beauty products — haircare (18 percent), oral care (16 percent), skincare (13 percent), feminine care (13 percent) and body care products (13 percent).
The annual Nielsen Global Brand-Origin Report highlights consumers’ preference for and sentiment toward products manufactured by local manufacturers versus large global/multinational brands across 34 categories.
“While we are seeing that consumers’ preference is still relatively balanced between local and global brands in Saudi Arabia, when it comes to food items, there is a higher inclination toward local brands. This could be due to the increased focus on innovations by the local players to offer better value for money and cater to the local palates,” said Arslan Ashraf, managing director, Nielsen Arabian Peninsula and Pakistan.
“As far as non-food items are concerned, we can see that brand equity plays a role in driving consumers’ preference for the global brands versus local.”
Consumer preference around the world
Preference for global brands was strongest in baby wipes, diapers and baby food/formula categories, where just 7 percent and 10 percent of consumers, respectively, said they prefer to buy brands from local manufacturers. Other categories where consumers showed a low preference for local brands include vitamins, supplements (12 percent prefer local), pet food (12 percent), feminine care products (13 percent), energy drinks (14 percent), and canned/tinned food products (15 percent). Conversely, categories where consumers were more inclined to opt for a locally manufactured product over a global brand included dairy products (54 percent), biscuits, chips, snacks and cookies (32 percent), ice cream (31 percent) and mineral/ bottled water (30 percent).
“In today’s world of hyper-connectivity and globalization, consumers have a wider array of product choices than ever before,” observes Regan Leggett, head of Foresight and Thought Leadership, Growth Markets, Nielsen. “Importantly, consumers also have greater access to global brands than they have in the past, thanks to factors such as expanding distribution, e-commerce offerings, and modern trade retail channels. As a result, we’re seeing a swing in preference toward the big multinationals.
“Other factors at play include consumer perception around quality, particularly in high involvement categories such as baby care.”
At a regional level, market nuances were evident, with consumer preference for global versus local brands varying widely within a number of categories. In the dairy category, consumer preference for local brands was much more pronounced in Africa and the Middle East (73 percent) and Europe (66 percent) compared to the global average (54 percent). In the biscuits/chips/snacks/cookies category, consumer preference for local brands was prevalent in Southeast Asia (50 percent), Africa and the Middle East (41 percent) and Latin America (41 percent) compared to 32 percent globally. In Europe, consumers were much more likely to opt for local alcohol brands compared to the global average (22 percent versus 16 percent), while Southeast Asian consumers showed a stronger affinity for local instant noodle brands compared to the global average (39 percent versus 21percent).
“The variation across regions illustrates the relative strength of local manufacturers within specific categories, particularly where they are appealing to local consumers’ tastes,” emphasized Leggett.
“In Southeast Asia, for example, where noodles are a staple in consumers’ diets, local manufacturers have been able to maintain a stronghold on the category. Similarly, in European markets locally sourced dairy products are perceived to be of a higher quality than imported products.”
Leggett concluded: “In an increasingly global world, the battle of brands comes down to understand consumers’ evolving needs, behaviors, lifestyles and tastes. Any brand, be it local or global, that is able to tap into these consumer preferences will be best-placed to win the hearts and minds of consumers in the future.”
King Abdullah Port sponsors logistics forum
King Abdullah Port has signed an agreement to sponsor the Supply Chain and Logistics Conference organized by the Transport Ministry. The conference, which will take place on Oct. 15-16 in Riyadh, will be held under the patronage of Transport Minister Dr. Nabil M. Al-Amoudi. Decision-makers, experts and officials from major local and international companies involved in the supply chain and logistics sector are expected to attend.
Highlighting the importance of participating in the event, Rayan Qutub, CEO of King Abdullah Port, said: “Our sponsorship of the conference comes within our commitment to cooperate and exchange expertise with the active players of the logistics sector, which recently has been witnessing major developments in terms of business volume, innovation and solutions that complement Vision 2030 and transform Saudi Arabia into a global logistics hub by promoting its position on the Logistics Performance Index issued by the World Bank.”
“Saudi Arabia has a number of components and facilities that enable it to play a key role in this sector at the regional and global levels, and we will play our part in showcasing the best King Abdullah Port has to offer in the logistics sector, such as solutions and facilitation for investors based on the port’s strategic location on the Red Sea. The port is on the main shipping line between the East and West, which significantly enhances the Kingdom’s competitiveness and positions it among the key countries in global trade,” he added.
Qutub will participate in a session for CEOs, where participants will discuss strategic decisions to reshape and keep pace with the global system of supply chains and logistics.
King Abdullah Port previously announced an increase in container handling reaching 1,236,075 TEU during the first half of 2018, marking a new record of 50.5 percent increase compared to the same period last year. Earlier, the port announced a 21 percent increase in its annual throughput by the end of 2017, making it the second largest port in the Kingdom in terms of container handling.
Run by the Ports Development Company, King Abdullah Port is the region’s first port to be fully owned, developed and operated by the private sector. It has been listed as the fastest growing container port in the world and one of the world’s top 100 ports after less than four years of operation. Eight of the largest shipping lines work at the port, which offers integrated services to exporters and importers.