Middle East consumers have embraced digital channels, and their spending is expected to increase. Recent research shows how businesses can increase the value they derive from this market in the years to come.
According to the McKinsey Digital Sentiment Survey, the adoption of digital channels and spending will increase over the next several years in Egypt, Saudi Arabia, and the United Arab Emirates. In all industries, artificial intelligence (AI) is being used more frequently at the same time.
According to the report, the three Middle Eastern nations provide various perspectives on the area, but each has its unique levels and types of internet access.
About 99% of consumers in the UAE have an internet connection, compared to just 71% of Egyptians. The UAE outperformed Egypt and Saudi Arabia in mobile subscriptions, outpacing them by 3.0 and 1.6 times, respectively.
“The region’s largest untapped market for digital firms, Egypt, has the most potential for expansion in terms of internet connectivity in the next years with 31 million of its citizens not having access,” the report stated.
Consumers in the Middle East now have a similar level of digital adoption to the most developed nations in Europe and North America six months ago. According to the report, customers connect with an average of 4.5 industries through digital channels in Saudi Arabia and the United Arab Emirates.
The average percentage of users in each industry who have interacted with digital or remote channels, or overall digital adoption, is currently at 78%. Egypt is still at the same level as developed markets in Europe and North America, despite lagging behind its neighbors in the area. The report suggested that Egyptian consumers engage with roughly 3.8 industries through digital channels on average, and their internet usage is 74%.
According to the survey, all three nations have similar digital adoption rates ranging from 75 to 80% for both fully digital and remotely assisted industries.
The least affected industries by digital disruption continue to be retail and healthcare, where consumer adoption is about 55% compared to a global average of 76%. In these industries, in-person components make up a significant portion of the customer experience.
Therefore, firms will need to continuously spend in creating a digital value proposition that is on par with or better than outstanding physical experiences. However, according to the survey, consumer happiness does not necessarily rise when digital channels are trusted. For instance, the Middle East does poorly on satisfaction metrics despite having a high trust ranking. Therefore, despite the fact that customers in the Middle East are more willing to adopt new digital services than users in other regions, the given digital solutions are not superior to those offered elsewhere.
“These findings suggest that while trust is important, companies must prioritize user experience, product availability, and information because these account for most user dissatisfaction. The good news is that companies are in a position to improve their performance on each of these measures—and, by extension, consumer satisfaction,” the report stated.