E-Commerce Becomes the Growth Engine in the UAE and Saudi Arabia Markets

NielsenIQ has released its “State of the Nation – Q3” report for the UAE and Saudi Arabia. While Modern Trade remains the largest channel, e-commerce is driving growth across both markets. According to the third-quarter “State of the Nation” report, the consumer basket continues to expand throughout the Middle East. However, spending behaviors in the United Arab Emirates (UAE) and Saudi Arabia vary significantly.

The report shows that the snacking category leads growth in the UAE, while Pet Care ranks first in Saudi Arabia, followed by snacking. In both markets, consumers exhibit a polarized shift toward value and premium segments, with the premium segment growing the fastest in the UAE.

“Contrasting Consumer Behaviors in Saudi Arabia and the UAE Present an Opportunity for Suppliers”

NielsenIQ APP General Manager Andrey Dvoychenkov stated: “Saudi consumers prioritize value in grocery shopping but are willing to spend on premium technology. In the UAE, spending is strong at both the entry-level and premium ends, offering suppliers opportunities to serve both segments. The contrasting consumer behaviors in the Saudi and UAE markets present a clear opportunity for suppliers: cater to value-oriented shoppers in certain categories while capturing premium demand in others.”

Product Variety in the Middle East Market Has Increased Significantly

Fast-Moving Consumer Goods (FMCG) and Tech & Durables (T&D) categories recorded strong growth in the 12 months leading up to September 2025. This growth is attributed to the notable increase in product variety entering the Middle Eastern market.

In the UAE, FMCG revenues increased by 7.7%, while the T&D sector grew by 6.9%.
A similar trend was observed in Saudi Arabia, where consumers increased their spending on food and technology products. FMCG revenues rose by 1.7%, and T&D registered growth of 4.5%.

Key highlights from the report include:

• Saudi consumers are prioritizing value in groceries while increasing their technology spending.
• UAE consumers are investing more in premium food baskets, while displaying relatively cautious behavior in tech categories.

Traditional Trade and E-Commerce Rapidly Expanding Their Roles in the Consumer Journey

Where consumers shop has become just as critical as what they buy. The Middle Eastern market clearly demonstrates the necessity of a strong omni-channel strategy across FMCG and T&D sectors.

According to NielsenIQ, Modern Trade remains the dominant channel for food and technology purchases, accounting for approximately 70% of FMCG sales in the region. However, both Traditional Trade and e-commerce are rapidly expanding their roles in the consumer journey. E-commerce gained two percentage points compared to last year, reaching 5.6% of FMCG sales in Saudi Arabia and 11.9% in the UAE. E-commerce ande traditional channels also remain significant, representing 23% of FMCG sales in Saudi Arabia and 18% in the UAE.

The Tech & Durables market similarly requires a strong omni-channel presence. Organized retail accounts for more than 75% of T&D revenues in the Middle East, while the online/e-commerce channel contributes nearly one-third of total sales.

How Are Consumer Dynamics Shaping in Saudi Arabia and the UAE?

In Saudi Arabia, a clear divergence exists between grocery and technology spending. In FMCG, consumers are increasingly opting for value segments compared to the previous year, while premium brands dominate T&D. This indicates that Saudi consumers focus on essential needs in groceries but are willing to spend more on high-end technology products.

Growing FMCG categories:

• Pet Care: +13%
• Snacking: +6%
• Beverages: +3%

In T&D, premium categories lead the market:

• Smartphones: +7%
• TVs: +2%
• Tablets: +6%

In the UAE, consumer behavior is more diverse across both FMCG and T&D. In FMCG, both value and premium segments grew by more than 20% year-on-year. In T&D, value (+3.6%) and premium (+7.5%) products outperformed the mainstream segment (+6.0%).