An increasing number of people across the Middle East are willing to choose – and pay a premium for – environmentally friendly products, despite economic pressures. This is a key finding of a new survey by consulting firm PWC.
The survey involved over 20,000 respondents globally and details fascinating insights into the spending habits of Middle Eastern consumers. Crucially, it found that these consumers are prepared to pay an average premium of 9.7% for products and services branded as sustainable.
Younger consumers, particularly Millennials and Gen Z, are leading the charge towards more sustainable spending. This group prioritizes brands that align with their values, especially those focused on social and environmental responsibility. They are not only more knowledgeable about these issues but also actively advocate for change. This is putting pressure on companies to adopt greener practices to stay competitive.
Buyers are also demanding more transparency about the environmental impact of brands. The survey showed that over 70% of shoppers would consider switching brands if they found a company’s sustainability claims to be misleading. This push for authenticity is forcing businesses to step up their sustainability efforts, from sourcing materials ethically to reducing their carbon footprint.
Attitudes To Car Buying Also Changing
The latest edition of another report, Arthur D. Little’s Future of Automotive Mobility (FOAM), details how car ownership, electric vehicles, autonomous driving, and new mobility services are evolving. It places a particular focus on the UAE, the most advanced market in the Middle East region in terms of the shift to ‘new energy vehicles’.
Alan Martinovich, Partner and Head of Automotive Practice in the Middle East and India at Arthur D. Little, highlights the UAE’s proactive stance on automotive innovation, noting a significant local interest in transitioning to electric vehicles and the implementation of autonomous driving technologies.
“The Middle East region is at the forefront of embracing the future of mobility,” commented Alan Martinovich. “Our findings highlight a significant readiness to transition to electric vehicles, a favorable attitude towards autonomous driving technologies, and a strong inclination towards digital transactions in car purchases. These insights are crucial for automotive manufacturers and policymakers navigating the evolving landscape of the Middle East automotive market.”
Key insights from the study indicate that car ownership is increasingly valued among UAE residents. More than half of the respondents in the UAE reported an increased importance in owning a vehicle, surpassing trends in regions like China. Furthermore, 80% of UAE consumers prefer purchasing new cars, differing starkly from the preference for used vehicles observed in Europe and the USA.
The transition towards environmentally friendly vehicles is a prominent theme in this report too. In fact, the UAE ranks in the top half of regions to prioritise environmental considerations as a key factor in their choice of car. Although a majority of UAE car owners still use internal combustion engines, over half expressed intentions to consider vehicles with alternative powertrains for their next purchase, with a notable interest in electric and plug-in hybrid vehicles. Despite this growing interest, fewer than 15% plan to choose fully battery electric vehicles (BEVs) at this point.
People in the Middle East commute 32 km daily, which is 50% higher than Europe.
The study also captures the UAE’s burgeoning interest in alternative mobility solutions. Ride-hailing, through companies like Careem and Uber, emerges as the most popular new mobility option, enjoying higher usage rates than car-sharing and ride-sharing services.
The study also reveals that residents in the Middle East have longer commutes and higher annual mileage compared to their European counterparts. On average Middle East residents commute 32 km daily, which is 50% higher than Europe. They also drive 18,000 km annually, 38% more than Europe.
The concept of autonomous vehicles is gaining traction among UAE consumers, with the report noting a significant leap in favourable attitudes from 32% in previous years to 60% this year. This willingness is contrasted by approximately 30% acceptance in more mature markets. Nevertheless, safety concerns would remain a barrier to wider adoption.
The car purchasing process in the UAE is increasingly digital, with the internet playing a crucial role from the initial research phase to finalising the purchase. However, car buyers in the region visit dealerships roughly 3.9 times before buying a vehicle, more than any other region globally. Notably, over half of UAE consumers express a preference for completing car purchases online, representing the highest rate worldwide.
These reports show strong interest in the transition to more sustainable cars and an increasingly sophisticated set of consumers in the region.
