Digital consumers in the Middle East: Rising adoption and opportunity

Each year, companies invest hundreds of billions of dollars in their digital channels to improve customer experience (and ultimately delight consumers). But ensuring this spending bears fruit requires organizations to gain an understanding of what consumers actually want. These preferences can evolve rapidly. Since the onset of the COVID-19 pandemic, digital channels have offered a valuable lifeline for consumers and companies alike. But will consumers return to their prepandemic behavior, maintain their digital ways, or adopt entirely new behaviors?

A McKinsey Digital Sentiment Survey of three markets in the Middle East—Egypt, Saudi Arabia, and the United Arab Emirates¹While most of Egypt is geographically part of northern Africa, its proximity to and engagement with its neighbors in the Middle East make Egypt an important player in the region.—shines a light on the trends and patterns that companies must consider to formulate a winning strategy (see sidebar, “About the research”). Of course, consumer preferences can vary significantly across regions, among countries within a region, and by specific industries. This survey provides insights to help shape strategy: Do countries have a critical mass of digital users across industries? What are their preferred ways of accessing online channels? And once there, what do they value most in a digital experience?

Our research suggests growth in adoption of digital channels and spending will rise in the coming years. This coincides with the increased use of artificial intelligence (AI) across all sectors. According to a new McKinsey Global Survey on AI, AI adoption has more than doubled since 2017,²“The state of AI in 2022—and a half decade in review,” McKinsey, December 6, 2022. helping organizations reinvent themselves by harnessing the foresight and precision of data and technology. Tailoring offerings by country and industry will be a crucial element in catering to digital consumers and capturing the full value from digital offerings. Companies across industries also have an opportunity to reallocate a higher share of their advertising spending to digital channels to engage consumers more effectively. The following nine charts paint a vivid picture of consumer preferences and offer clues for where companies can place their bets.

Overall, the fundamentals for growth in the Middle East region remain strong, with customers poised to increase spending in digital channels and adopt new digital technologies. Companies should focus on embracing a mobile-first strategy and design products to take advantage of the accelerated adoption. In particular, Egypt will be an important growth frontier; first movers will benefit by unlocking the country’s latent potential.

At the same time, companies in sectors with more consumer touchpoints—such as grocery, healthcare, and retail—should continue to invest in an improved user experience and features to increase adoption, especially in the United Arab Emirates, which currently lags regional and global benchmarks. Companies have to become more sophisticated in their digital marketing spending to maximize ROI. They must also experiment with consumer engagement to find their sweet spot; understand the importance of customer value management to enhance pricing and product packaging; and invest in personalization at scale to deliver delightful experiences.

Companies that can manage these priorities simultaneously will be best positioned to capture market share in this dynamic region.