E--commerce accelerates across FMCG and Technology & Durables as consumers balance premium aspirations with value-seeking behavior
UAE, Dubai: NielsenIQ has released the State of the Nation Q2 report covering consumer and retail performance in the UAE and Saudi Arabia.
Consumer markets across the UAE and Saudi Arabia continue to evolve rapidly, with changing shopping behaviors, accelerating digital adoption, shifting category demand and growing polarization across price tiers reshaping the consumer landscape.
Across both Fast-Moving Consumer Goods (FMCG) and Technology & Durables (T&D), three forces are emerging as common drivers of growth: the continued expansion of e-commerce, increasingly category-specific demand, and consumers balancing premium aspirations with a heightened focus on value.
E-commerce reshapes the consumer journey
Online channels are becoming an increasingly important growth engine across the consumer basket, influencing both everyday FMCG purchases and higher-value technology products.
In FMCG, e-commerce remains the fastest-growing channel in both markets. Saudi Arabia’s e-commerce channel grew 56.7%, increasing its value share from 5.0% to 7.9%, while the UAE recorded 26.4% growth, with e-commerce value share rising from 11.9% to 14.1%.
Modern Trade remains the largest FMCG channel, representing approximately 69% of sales value, but digital commerce is increasingly contributing incremental growth and changing how consumers discover, compare and purchase products.
The shift is equally visible in Technology & Durables, where online sales across the UAE and KSA are growing at more than 19%. Wider assortment, greater price transparency, consumer reviews and faster access to new launches are helping make online purchasing increasingly mainstream.
While physical retail remains important for product experience, demonstration and immediate fulfilment, future growth across the consumer basket will increasingly depend on seamless omnichannel strategies that connect digital discovery, physical experience, purchase and repeat engagement.
Growth is increasingly driven by specific categories and consumer needs
Overall market growth is becoming less broad-based, with opportunities increasingly concentrated in categories that respond directly to evolving consumer needs.
Within FMCG, category performance differs significantly between the two markets. In KSA, Petcare continues to outperform, delivering 12% value growth and 16% volume growth, followed by strong momentum in Snacking.
In the UAE, Ambient Food and Beverages emerged as the leading growth categories, delivering 8% and 7% value growth, respectively, alongside strong volume performance of 6% and 8%. Snacking, Dairy, Frozen Food and Paper Products also recorded positive momentum.
Technology & Durables is seeing growth in categories connected to connectivity, productivity, entertainment and convenience. Photo/Optics, Office Equipment, Consumer Electronics, Media Tablets, Headsets and Vacuum Cleaners are among the stronger-performing sectors.
At the same time, categories including Home Climate Control, Cooking Appliances, Mobile Computing and Smartwatches are facing greater pressure, reflecting differences in replacement cycles, affordability and changing consumer priorities.
The implication for brands is clear: success increasingly depends on identifying high-growth consumer needs and investing behind relevant categories, rather than relying on overall market expansion.
UAE and KSA follow distinct growth trajectories
While both markets remain dynamic, their growth patterns are increasingly differentiated.
The UAE FMCG market delivered 5.4% overall growth, supported by solid volume expansion and broad-based category performance. Traditional Trade and e-commerce were key contributors, while Modern Trade remained relatively stable.
In contrast, KSA FMCG recorded a 1.0% decline, primarily reflecting lower volumes across Modern Trade and Traditional Trade. E-commerce provided an important counterbalance, helping partially offset the decline.
Technology & Durables, meanwhile, continued to show positive momentum across both markets, supported by sustained consumer demand and ongoing digital adoption.
These developments reinforce the importance of a market-specific approach, with growth strategies increasingly needing to account for differences in consumer behavior, category demand and channel dynamics.
Premiumization and value-seeking are happening at the same time
Perhaps one of the most significant developments across the consumer basket is the growing polarization of consumer demand.
In Technology & Durables, premium brands continue to gain share. In KSA, premium brands increased their share from 57% to 62%, while value brands declined from 29% to 25%. In the UAE, premium brands remain dominant at 62%, while the value segment also expanded slightly, from 26% to 27%.
This points to an increasingly polarized market in which consumers are willing to trade up for innovation, performance and perceived quality while simultaneously seeking affordable alternatives in other areas.
FMCG shows a similar trend, particularly in KSA. Premium brand share increased from 23.1% to 26.3%, while value brands rose from 12.1% to 13.8%. Mainstream brands, meanwhile, declined from 64.7% to 59.9%.
In the UAE, growth remains more balanced across value, mainstream and premium tiers, although premium brands continue to be the fastest-growing segment.
The result is increasing pressure on mainstream brands, which are being squeezed from both ends as consumers become more deliberate about either maximizing value or paying more for products that deliver stronger performance, innovation or quality.
Competition intensifies across the consumer basket
The combination of e-commerce, broader assortment, greater product availability and an expanding number of active brands and SKUs is creating a more fragmented and competitive consumer landscape.
As consumers gain access to more alternatives, brands face increasing pressure to differentiate through innovation, pricing, availability, value propositions and digital visibility.
The brands best positioned to win will be those that can identify emerging consumer needs, invest behind high-growth categories, balance premium and value propositions, and build omnichannel experiences that meet consumers wherever and however they choose to shop.
Andrey Dvoychenkov, General Manager Arabian Peninsula and Pakistan, adds, “The UAE and Saudi Arabia consumer markets are entering a more nuanced phase of growth, where winning is no longer simply about being present in a growing market. Consumers are becoming more digital, more selective and increasingly polarized in how they spend. We are seeing strong opportunities in e-commerce and high-growth categories, while premium and value propositions gain ground simultaneously. For brands, the priority is to understand where demand is moving, tailor strategies to the realities of each market, and create an omnichannel experience that delivers both relevance and value.”
Key FMCG Takeaways
- E-commerce is the key growth driver in both UAE and KSA, despite Modern Trade remaining the largest channel.
- Traditional Trade delivered double-digit growth in the UAE, highlighting the continued relevance of physical and traditional channels.
- Petcare is the fastest-growing FMCG category in KSA, followed by Snacking.
- Ambient Food and Beverages lead FMCG growth in the UAE, supported by strong volume expansion.
- KSA shows clear polarization toward premium and value players, while the UAE presents a more balanced picture across price tiers.
Key Technology & Durables Takeaways
- Online purchasing is accelerating, with e-commerce growth above 19% across both KSA and UAE.
- Telecom and IT remain key growth engines, with the UAE leading in value growth and IT demand.
- Consumer Electronics continues to show strong momentum, while Small Domestic Appliances and Major Domestic Appliances deliver steady positive growth.
- Premium segments are gaining strength across both markets, reflecting consumers’ willingness to trade up.
- Mainstream brands are increasingly squeezed between premiumization and the rise of affordable alternatives.
About NIQ
NielsenIQ (NIQ) is a leading consumer intelligence company, delivering the most complete understanding of consumer buying behavior and revealing new pathways to growth. NIQ combined with GfK in 2023, bringing together two industry leaders with unparalleled global reach. Our global reach spans over 90 countries covering approximately 85% of the world’s population and more than $7.2 trillion in global consumer spend. With a holistic retail read and the mostcomprehensive consumer insights—delivered with advanced analytics through state- of-the-art platforms—NIQ delivers the Full View™.
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