Key Take Aways

Building Valuable Brands in Today’s Saudi Arabia

1.) Be aware of regional variation in attitudes

Consumers differ significantly in their tastes and expectations depending on where in Saudi Arabia they live. For this reason, new brands tend to launch first in Jeddah, the main entry point for Hajj pilgrims. People here have been exposed to other cultures for generations, and they pride themselves on being liberal and outward-looking, provided progress doesn’t conflict with their core beliefs. In the capital, Riyadh, the mood is more conservative; people are beginning to open up to ideas from outside the country, but with great caution for fear of changing too rapidly. In the industrial center of Dammam, in the east, there is a sense of conflict between change brought by progress and a strong desire to preserve tradition and defend the status quo.

2.) The population is young, but wealth is with the old

The median age of Saudi people is 27 (compared to 36 in China and 38 in the US), and brands are usually drawn to the younger tech-savvy and generally outward-looking sector of the Saudi consumer audience. But much of the country’s wealth remains with this younger generation’s parents and grandparents. This creates a curious dynamic for brands; older consumers have more money to spend, but the big spenders of the future are looking at forming brand loyalties now. At the same time, young people who are earning their own money for the first time, rather than relying on their parents’ support, are using brands to make a clear statement of independence and selfexpression. When Dad is paying for their new shoes, they are unlikely to choose a style that will upset him, but when it’s their own money, they feel free to buy what they truly want.

3.) Make promises and nurture trust

Trust, reliability and authenticity are essential qualities for a brand to succeed in Saudi Arabia. Trust is earned over a long period of time, and if lost, is almost impossible to recover. A bad experience is not just remembered but also shared, and in a society where the views of family and friends matter immensely, this is especially important. The benefits of building trust are huge, however, and favored brands often run through generations; sticking with a brand is seen as a way of continuing a family tradition and provides reassurance. At its simplest level, trust depends on ensuring that a brand’s promise matches up with what is ultimately delivered, and doing that consistently over time.

4.) Offer value, enable smart choices

Consumer confidence has dropped five percentage points in the past year as economic growth has dipped to its lowest level in five years. While GDP growth is forecast to rebound in 2017, consumers have adjusted their spending habits and are rethinking the categories, products and brands they buy. This is an opportunity for brands. Buying quality remains a high priority, but people are looking for ways to buy smarter, and to get better value for money. Don’t make goods seem cheap, but show them as the answer to considered decision-making. This is particularly the case in categories that tend to be driven by impulse, or that are big-ticket items.

5.) People are keen to try new things

The Saudi culture may appear conservative but there is a strong appetite, especially among the young, for trying new products and brands, and a sense of pride in being the first in a social group to have the latest thing. Being ahead of the curve is a badge of honor, particularly when it comes to technology items, which are highly prized and regularly updated. Brand awareness is high, even of brands that aren’t officially sold in Saudi Arabia. Wealthy Saudis are well travelled and have a knowledge and experience of global brands that goes beyond what is available locally.

6.) Align with consumers’ quest for good health

In recent years, consumers have taken a growing interest in healthy living and how their consumption decisions affect their physical and mental wellbeing. This is leading to growing demand for products seen as fresh and natural, and a decline in interest in goods perceived as being fattening or otherwise overly indulgent. This shift affects not just food and drink but also the personal care and home care categories. There is a new openness to products with “alternative” ingredients that reduce harm or improve health.

7.) Shopping is fast becoming a family event

Restrictions on the movement of women mean that men have traditionally done the family shopping, often with a list provided by their wife in which she sets out not just the product required but usually her preferred brand as well. The rise of modern, air-conditioned malls and a relaxation of this rule means that families frequently now shop together. Malls have huge appeal to consumers looking to escape the fierce Saudi heat and are a one-stop shopping destination. Beyond the malls, smaller stores tend to be clustered by category, so there are streets for buying mobile phones and another part of town for plumbing supplies or shoes. Corner stores called ‘baqala’ have been important destinations for families topping up between bigger shopping trips, but these are declining in number as supermarkets and hypermarkets expand their footprint.

8.) Retail for women is more than just shopping, it’s social

Women are not allowed to drive in Saudi Arabia but are permitted to go out alone or with a driver, which means women are seeking out places to meet socially with friends. Shopping for clothing, accessories and items for the home is becoming a social activity to be shared among women, providing a change of scene, respite from the heat outdoors, and a chance to catch up with friends. While stores used to be primarily staffed by men, women are now increasingly taking jobs in retail, making shopping for women a more pleasant and easier experience.

9.) Cards matter, but cash still rules

Most consumers have a bank account and penetration of debit cards is almost universal, but most people use their cards to withdraw cash, rather than using the cards to pay for goods directly. Credit cards are used mainly for biggerticket items, when it would be inconvenient to carry around so much cash, though card payment systems are widely available at the point of sale. Mini-marts, supermarkets and shops within malls all have electronic payment available, but ‘baqala’ corner stores only accept cash. There is an opportunity for payment-service providers, banks and retailers to encourage wider use of cards.

10.) Mind the clutter, watch for gaps

There are key advertising seasons when every brand is active, and while the brand landscape is busy at these times, there’s a sense that if you want to maintain a presence in people’s minds, you have to be there too. Ramadan and the post-Ramadan holiday period of Eid are the busiest, along with the back-toschool season and events of national significance, during which brands take the opportunity to, for instance, publicly congratulate the king on a new achievement, or mark another historic event. Outside of these times, there are clear opportunities for brands to make a bigger impact on consumers, not just because media rates become more affordable, but because they can also experiment with ideas unrelated to festivals or events.

11.) Get online and get mobile, but don’t forget TV

Video viewing levels on mobile phones are among the highest in the world, partly due to consumers’ passion for all things digital and partly because mobile phone subscriptions tend to be generous with data allowances by world standards. Between a third and half of all time spent watching video content is spent on a mobile device; everyone is online and has a mobile phone, so digital must be part of any media plan. But traditional television is still a powerful draw, and when combined with catch-up TV, still accounts for more of consumers’ time than mobile video: 41 percent. Look at the opportunity for cross-screen advertising that takes into account the multi-screening habits of Saudi consumers.

12.) Think social – consumers are ahead of the game

Brands are lagging behind consumers when it comes to social media. More than 90 percent of Saudi adults are online and nearly all of these people are using YouTube and other social media platforms, primarily Facebook and Instagram. Yet few brands have so far made real inroads into social media here, beyond having a branded page and inviting people to ‘like’ it. The closeness and immediacy that social media promises – and which is being used so effectively as a customer service and e-commerce tool in other highly social markets such as China – is an area for brands to explore in Saudi Arabia.

13.) Close the deal online

Browsing and buying online – particularly via mobile – accounts for a large and growing proportion of the time that consumers spend with their devices. Already, 30 percent of financial services and 72 percent of hotel bookings are made online, and there are thriving local e-commerce sites. But shoppers in many categories are still not actually making their purchases online, and need reassuring about security and authenticity. There is also scope for improvement in logistics, as ‘needing it now’ is one of the common reasons people give for buying in a physical store rather than online.

14.) Make country of origin count

Local, regional and global brands all stand to do well in this market if they present the right offering. There is great Saudi pride in local brands, and if a local brand is the best in its category then Saudis will usually prefer to buy it, particularly when it comes to food and drink. They are also open to brands from neighboring markets such as Egypt and Lebanon, and will opt for these over a local brand if the quality is superior. Consumers also have an open mind regarding global brands, and iPhone and Samsung are as popular here as in any other affluent market. The foreign-ness of these brands lends consumers assurances on product quality and innovation. Across categories, there is a general preference for American brands over European or Asian labels, but Saudis are sophisticated shoppers and are looking for the item or brand that best meets their needs, so being Korean is an asset in the technology sector, US cars are popular, and being French counts in luxury. Brands need to be aware that they represent their country of origin and vice versa, regardless of whether they promote their providence, and in times of political tension, brands can often be made to pay for events beyond their control. A controversial cartoon of the prophet Mohammed in a Danish newspaper a decade ago had a damaging effect on sales of Danish products in Saudi Arabia.

15.) Function sells, but consumers want more

Most ads in Saudi Arabia focus on price and function, and the emotional benefits of brands are frequently overlooked. There are many more rational ads in this market, yet it’s the ads that give weight to emotions such as parental love, admiration, pride, generosity and empathy that consumers say are the most enjoyable and the most memorable. Kantar Millward Brown research has found that the most persuasive ads of all, however, are those that combine a functional, rational message with emotion, and link the two very clearly to the brand.

16.) Families are at the heart of Saudi life, but in ads, they’re overused

In Saudi life, there is only family life. Children grow up with their parents and don’t usually move on until they are married and form their own family. Extended families often live under one roof and in neighboring properties, but there is no time in a Saudi person’s life when they live alone or share with friends. People cannot live with a partner outside of marriage. Family harmony is, not surprisingly, an oftused device in advertising in this market, but it is so widely deployed that one image of a well-stocked dining table often blends into the next. ‘Happy families’ imagery is growing tired, and for brands seeking to stand out, one easy way to do this is to steer clear of the standard ‘family around the table’ poses and seek a fresh take on happiness and togetherness.

17.) Respect religion, but don’t preach

Religion is at the heart of Saudi law and every aspect of daily life, and brands need to be mindful of this in their communications. But it is simply expected that brands in this market will be respectful of religion, and there is no need to address it specifically. In fact, while consumers like brands to acknowledge their beliefs and the way they live their lives, they object to the idea of Islam being used in any kind of sales pitch. Overtly religious messages – even those with positive associations – are best avoided, and any ideas that are disrespectful to Islam should not be contemplated in this market. They will not only fail with consumers but also put a brand on the wrong side of the law.

18.) Don’t be afraid to crack a joke

The conservative nature of Saudi culture by world standards means brands are often reluctant to consider using humor in their communications for fear of causing offence. Consumers here love to laugh, however, and brands use humor to cut through cluttered categories. The popularity of YouTube here is fuelling the appetite for humor and consumers want more. Visual humor appeals to people of all ages, and word play is seen as not just funny but also clever, reflecting well on the brands bold enough to use it. The Snickers campaign ‘You’re not you when you’re hungry’ shows how it’s done. These ads have proved popular and effective in Saudi Arabia.

19.) Famous faces have pulling power

While marketing in many other markets is awash with celebrities, in Saudi Arabia, only about 10 percent of ads include a famous person. Consumers say their enjoyment of ads is much higher, however, when there is a celebrity involved. Choose a celebrity ambassador carefully, to ensure their values chime with those of your brand so that the link is credible. While the celebrity needs to be instantly recognizable to have an impact, brands should think not just about people in entertainment but also stars of the digital world, such as prominent bloggers, and deploy them to highlight not just product benefits but to draw attention to corporate activity that reflects social responsibility.

20.) Ask about taboos – there’s often a workaround

It’s true that there are a lot of rules to abide by when it comes to building a brand in Saudi Arabia, but there are also a lot of myths, and sometimes rules aren’t as absolute as they seem. It’s not forbidden, as some people believe, for instance, to play music, though some of what’s often associated with music, such as dancing and mixing of the sexes, isn’t allowed. Drinks brand Vimto and Afia cooking oil are known in this market by the memorable music in their TV commercials, and the Zain mobile network is among brands using singers and other celebrities in their ads. It’s true that faces are often blurred or cropped from images on billboards, but faces do appear in other forms of advertising.

BrandZ Saudi Arabia Top 20 2017

BrandZ LATAM 2017 Report Top 20 Report

Top 20 Chart

Top 20 Infographic

 

Methodology and valuation by Kantar Millward Brown


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