UAE retailers had announced massive discounts and offers of up to 70% ahead of the Holy month of Ramadan.
Ramadan and Eid El Fitr present strong opportunities for retailers to cater to the festive and gifting mood traditionally associated with the occasion.
Ramadan and Eid: A retail haven
Retailers are set to benefit from the festive optimism unfolding across the UAE and Saudi this Ramadan. This is according to a new RedSeer Consulting report, which identifies online as the bright spot this year.
A period of reflection, fasting, social bonding, and spirituality, the holy month of Ramadan is also a time of feasting and presents, usually sparking high levels of consumer activity in the Middle East.
According to RedSeer, the period is getting more lucrative each year.
Where other religious landmarks such as Christmas, Diwali, and Chinese New Year are celebrated for two to three weeks at most, Ramadan festivities last 7 weeks in the lead up to the holy Islamic festival of Eid El Fitr.
Despite the COVID-19 outbreak, purchasing excitement across categories during Ramadan jumped by a staggering 40% between 2019 and 2020, and another 20% increase is expected in 2021.
A significant driving force in this steady uptick amid challenging conditions is the rapid shift to online consumption in the Middle East.
Online sales are expected to exceed $2 billion in gross merchandise value (GMV) this Ramadan.
“We find that the Apparel & Footwear category is what consumers are most excited about purchasing this Ramadan season,” explained Managing partner of RedSeer in Dubai Sandeep Ganediwala.
“Traditionally this has been a strong category during Ramadan as consumers consider it to be the appropriate category to purchase gifts for friends and family.”
“Sectors such as grocery are more active pre-Ramadan. Other sectors such as fashion start during the Ramadan period.”
Arabian Business reports that 40% of the Middle East’s total ad budget is spent during Ramadan, as retailers scramble for their share of the pie.
Beauty and personal care
To celebrate the holy month of Ramadan, Benefit Cosmetics’ Middle East division is working with nine regional influencers to create video content that speaks to the values of Ramadan.
The month-long campaign began on April 12 and lasts until May 12 when Ramadan concludes.
Though the Middle East beauty market is significantly smaller than the North American and Asian markets, it is one of the fastest-growing. Euromonitor International reported that the GCC expects the beauty and personal care market to reach $47.5 bn in 2021.
Emerging categories like Halal beauty have gained traction across the world, and clean beauty is also becoming more widespread in the region. According to TechSci Research, the organic cosmetics market in the Middle East is expected to be worth $4 bn by 2022.
Partnerships between brands and social media influencers are increasingly becoming main marketing strategies. In Saudi Arabia, 67% of consumers want to try brands or products when they see other people using them on social media.
Creating meaningful content around people’s Ramadan expectations, traditions and values will help brands to tap into customer emotions and experiences.
Challenges for retailers
Fashion, accessories, and auto are sectors that have work to do during this season.
“Price cuts are not always the best promo mechanism that shoppers respond to,” said Didem Sekerel Erdogan, Senior Vice-President of Intelligent Analytics at NielsenIQ, the market research firm.
This time around, a year after the pandemic, 98% of UAE consumers remain “constrained and cautiously insulated”, which is how NielsenIQ describes the current mindset.