May, 2019      |     By Sandeep Ganediwalla, Anuj Kumar and Vijay Kumar

How consumers in MENA are planning their Fashion shopping this Ramadan

Preparation for Ramadan starts one month in advance and celebration continues 2 weeks post Eid, making it the longest celebrated festival globally


Sandeep Ganediwalla

Managing Partner

E Commerce Business Models

Anuj Kumar

Engagement Manager

Sephora Market Share

Vijay Kumar

Associate Consultant

Introduction to Ramadan

Ramadan is a global event; celebrated by ~2BN people globally, 450+ Mn people in MENA

Preparation for Ramadan starts one month in advance and celebration continues 2 weeks post Eid, making it the longest celebrated festival globally

Ramadan is the longest global festival where 1.9Bn people observe Ramadan & Eid annually translating to a quarter of the world population. The festival is highly popular in the MENA region (Middle East and North Africa Region) where 95% of its population fast in the holy month (463 Mn). In other parts of the world – 24% of APAC (1,057 Mn), 7% of Europe (50 Mn), 1% of North America (5 Mn) and 19% of rest of the world (331 Mn) celebrate the holy festival of Ramadan.

Absolute population celebrating Ramadan; % of population celebrating Ramadan

Consumption behaviour of products among people shifts drastically during this holy period

With ~75 days of celebration, huge shift in consumer consumption behaviour is seen during the festival. While most of the consumers might fast the whole day spending time in spiritual reflection, families and friends often come together for Iftar, breaking the fast at dusk. The build up to Iftar is marked by women cooking traditional meals at home, which augments the demand for certain food and beverage categories.

On the trade front, marketers respond to increased consumption habits with a range of Ramadancentric marketing communications. As meet and greet happens in this festival all along, categories such as Media & Entertainment, Beauty and Personal care, Fashion, Footwear, Furniture and home essentials, Telecom, Travel, Automotive and Tech also see a surge in demand. People also start engaging in planning for this shopping much in advance.

Overall, Ramadan plays a key role in defining the economy of the region. Since the festival is celebrated by 95% of the population, some countries have laws that amend work schedules during Ramadan. Like, under UAE labour law, the maximum working hours are to be six hours per day and 36 hours per week. Qatar, Oman, Bahrain and Kuwait have similar laws, giving them more time with family and community.

Shift in Consumer Behaviour
Media Behaviour
UAE, KSA and Egypt driving retail in MENA

The three countries UAE, KSA and Egypt collectively represent a retail market size of ~330Bn which is a 70%+ share of the USD 450 Bn retail market of MENA. Key performance indicators driving consumer behaviour in these three countries will drive the retail performance in the region which gets detailed out in this report.

MENA Retail market size (USD Billion) – 2018
MENA Retail market size (USD Billion) - 2018
Consumption behaviour in Ramadan for fashion and lifestyle products

Consumption behaviour in Ramadan for fashion and lifestyle products

Customers in MENA are excited to purchase fashion products this Ramadan

Clothing Shopping

Clothing purchase among the consumers is expected to peak up during the Eid week

Consumers from UAE and KSA are planning for their clothing shopping in the Eid week, however in Egypt this peak is expected in the Ramadan month. This trend is similar across consumer verticals where consumers in Egypt prefer to purchase the products earlier compared to other two countries

The excitement level among different age groups and genders in the three countries is similar, where 95%+ people purchasing fashion mentioned there will be an increase in clothing shopping. However, when this trend was analysed over the three phases of Ramadan – Month before Ramadan, Ramadan month and Eid week; significant differences were observed

Increase in Clothing Shopping in Ramadan

One Month Before Ramadan

22% people plan to buy clothing items one month before Ramadan however the excitement levels grow when people start preparing for festivities.

The excitement levels among the people in Egypt was found to be highest where 54% of the consumers mentioned that there will be an increase in clothing shopping in this period. This could be attributed to a more evolved retail network in UAE and KSA where retail density and access to brands is higher. People are assured to get the desired product in hand even when they delay the shopping.

This behavior is similar across consumer segments.

Increase in Clothing Shopping – 1 Month Before Ramadan Month

Increase in Clothing Shopping – 1 Month Before Ramadan Month

During Ramadan Month

In the month of Ramadan, ~44% of people plan to buy clothing as the market is offering new clothing products range and attractive pricing.

The excitement levels in Egypt were again found to be highest. Also, it was interesting to observe that clothing purchase tendency is expected to increase among upper age group. This could be attributed to the fact that disposable income is highest in this age segment and hence they also end up shopping for others. The tendency to give gifts is also highest in this age segment.

Increase in Clothing Shopping – Ramadan Month

Increase in Clothing Shopping – Ramadan Month

During Eid Week

Post the month of fasting the world celebrates Eid which brings families and communities together in meet and greet sessions.

This is the time when clothing purchase can be expected to be highest with ~70% of interviewed customers who are planning clothing product mentioned there will be an increase in the shopping for clothing products.

UAE can be expected to showcase steep rise in clothing shopping in Eid-week where most of its customers are planning shopping around this time, while in Egypt by Eidweek most of the consumers would have made their clothing shopping.

Upper age group again outperforms other age groups while males take lead over females which could be attributed to more disposable income in hand and gifting tendency.

Increase in Clothing Shopping – 1 Month Before Ramadan Month

Increase in Clothing Shopping – 1 Month Before Ramadan Month

Footwear purchase

Footwear purchase among the consumers is expected to peak up during the Eid week

The excitement level to purchase footwear products among consumers in UAE and KSA is expected to be higher when compared with consumers in Egypt. Overall 65% of the consumers planning fashion shopping mentioned that there will be increase in footwear product shopping in the festive season of Ramadan. The trend among different age groups and gender for footwear shopping gets detailed below.

Increase in footwear shoppping in Ramadan

Before Ramadan

Only 12% of people planning footwear shopping are planning to buy footwear before Ramadan, However the segment displays a behaviour similar to clothing, where excitement levels peak up with approaching festivities.

Of all the three countries, highest number of people in Egypt mention that there will be increase in footwear shopping in one month advance of Ramadan. The behaviour among different gender and age groups can be expected to be consistent

Increase in Footwear Shopping – 1 Month Before Ramadan Month

Increase in Footwear Shopping – 1 Month Before Ramadan Month

During Ramadan Month

34% people in the MENA region plan to purchase footwear during Ramadan month.

The increase in shopping trend is expected to rise in UAE and KSA in this month, however it marginally drops in Egypt. Also, it was interesting to observe that footwear purchase tendency is expected to increase among upper age group. This could be attributed to the fact that disposable income is highest in this age segment and hence they also end up shopping for others. The tendency to give gifts is also highest in this age segment.

Increase in Footwear Shopping – Ramadan Month

Increase in Footwear Shopping – Ramadan Month

During Eid Week

Post the month of fasting the world celebrates Eid which brings families and communities together in meet and greet sessions. This is the time when footwear purchase can be expected to be highest with ~80% of interviewed customers who are planning footwear purchase mentioned there will be increase in the shopping for footwear

UAE and KSA can be expected to showcase steep rise in footwear shopping in the Eid-week where most of its customers are planning shopping around this time, while in Egypt by EidWeek most of the consumers would have made their footwear shopping. Upper age group again outperforms other age groups while males take lead over females which could be attributed to more disposable income in hand and gifting tendency. This trend is similar to what was seen in clothing products.

Increase in Footwear Shopping – Eid Week

Increase in Footwear Shopping – Eid Week

Consumer channel preference in Ramadan

Customers in MENA are looking at both offline and online & omnichannel with similar preference for the fashion shopping this Ramadan; KSA and UAE are more open to online and omnichannel while in Egypt Offline dominates

The retail network in the three countries is evolved and consumers are used to shop products from the offline channel. However, the emergence of e-tail and great support from the private equity funds have helped the sector establish in the region. Currently the e-tail market in MENA stands at USD 8 Bn which is expected to reach USD 25 Bn by 2022, at a growth rate (CAGR) of 30%+.

The e-tail firms in the region started with a horizontal journey where they were offering products across sectors with focus on electronics. This was followed by verticalization (i,e. focus only in one sector), and the emergence of fashion focussed players who tasted success. Fashion was strongly pushed by e-tailers as it was offering the best margin. The share of fashion in MENA e-tail market rose to 25% from 20% in last two years. Over the period this share is further expected to rise.

E-tailers recognize how important is the customer experience in the fashion category and started building relationship. Noon.com and Alshaya entered into a strategic partnership so that customers of noon.com have access to wide range of brands and styles. JollyChic another popular player in the region grew big by offering affordable but great style fashion to its customer, which was earlier missing in the market and, hence building a niche. In-spite of good number of fashion focussed e-tailers in the region, global players such as – NetA-Porter and ASOS are popular among customers, indicating the hunger of the region for quality fashion.

Channel Preference for Fashion Shopping in Ramadan

Channel Preference for Fashion Shopping in Ramadan
Ramadan Festive Report

When asked, consumers communicated a high acceptance to purchase fashion products from from online and omnichannel networks, especially in KSA and UAE where the acceptance levels are highest 50%+, while people in Egypt still prefer offline channel for fashion shopping.

The acceptance level for online and omnichannel for fashion shopping among MENA customers is rising and has started matching the acceptance level seen in electronics category. When online and omnichannel preference behaviour was studied for smaller cohorts, it was observed that customers from Generation Z age group are most open to try online channels. This is because of higher exposure to technology compared to other age groups.

Customers are increasingly using both online and offline channel to gather information and make the purchase decision. This is the trend which is expected to pickup in the region where both online and offline channel will be dependent on each other for information seeking and purchase transaction execution.

Omnichannel Behaviour in Fashion Shopping among MENA Consumers

Perference to search online and shop offline
Media influence in fashion shopping

Social media is rated as highest by people across MENA as the most influential channel in helping with fashion shopping. Within Social media Facebook, YouTube and Instagram were rated highest

During Ramadan people spend more time on Facebook and Instagram, watch more YouTube, perform more searches and access the internet on their mobile devices more frequently. Digital media consumption has risen in the last few years.

Across the Arab world, Ramadan is treated as a time to reconnect with one’s faith and spend time with family and friends, which generally entails working less and resting more. This combination of free time and a celebratory atmosphere in turn means that time spent online is higher during Ramadan than any other period.

When the people in MENA were asked to identify the media channel which influence their fashion shopping most, social media was ranked as highest. This was followed by TV and company websites

“Media influence in Fashion shopping among MENA customers in Ramadan”

Media influence in Fashion shopping among MENA customers in Ramadan

People search for new products and designs and interact among friends to understand what fashion is trending. This coupled with top fashion brands launching Ramadan focussed collection help increase online interaction among people on different social media channels.

When asked, within social media – Facebook, Instagram and YouTube was rated highest by the people which will help them in taking decision regarding fashion shopping.

“Social Media influence in Fashion shopping among MENA customers
in Ramadan”

Social Media influence in Fashion shopping among MENA customers in Ramadan”

Conclusion

There exists opportunity for brands to align its marketing strategy to gain maximum advantage

There exists an opportunity for Fashion players to take a customized strategy for different product categories in different MENA countries to create the maximum buzz among its target groups.

  • UAE and KSA with its already developed retail network is expected to showcase more omnichannel behaviour where people would make use of both the channels to make purchase decisions
  • Egypt still prefers offline channel and brands can expect to perform best by running campaigns along the offline channel
  • Consumers in Egypt plan there fashion shopping much in advance and hence the campaigns must start much in advance while in UAE and KSA, fashion shopping is expected to peak up in the Eid-week and brands will have to display patience and try to keep customers engaged in the earlier days of the holy month
  • People from upper age group (Generation Z) will end up maximum fashion shopping compared to other age groups. This age category must be focussed to gain the maximum traction
  • Brands should give the highest preference to social media platforms led by Facebook, YouTube and Instagram for marketing, as these are the platforms where consumers would be looking for information to make the purchases