Saudi Gazette report
RIYADH — Saudi Arabian consumer moved up to share the number two spot on Credit Suisse’s consumer confidence scorecard, from the fifth spot last year, according to Credit Suisse Research Institute's its 6th annual Emerging Consumer Survey published on Monday.
Despite the free fall in oil prices in 2015, consumer appetite for spending remains strong, with most Saudis envisaging an increase in their spending on general discretionary products, said the survey which profiles consumer sentiment and its drivers across the emerging world.
The consumer has been insulated from the pressures which the oil price weakness may have had on other aspects of the economy, given a strong buffer of foreign exchange reserves, low levels of debt and a currency that remains robust.
Saudi Arabia again ranked best among the nine countries when asked “In your opinion is now a good time to make a major purchase?” Some 53% of the respondents voted that it was at least a good time for a major purchase, and 23% of those thought it was an excellent time.
The survey believes that Saudis remain positive about the outlook of their personal finances due to their expectation that the government will continue to support private consumption by disbursing bonus salaries, although we believe it is unlikely this year.
Market penetration in Saudi Arabia remains high across products, with above 90% levels for items such as computers, cars and smart phones. This indicates that the opportunity in some areas lies in product substitution rather than increased penetration.
To undertake the survey, Credit Suisse partnered with global market research firm Nielsen to conduct nearly 16,000 face-to-face interviews across nine emerging economies — Saudi Arabia, Brazil, China, India, Indonesia, Mexico, Russia, South Africa and Turkey.
The research is unique in benchmarking consumer behavior across these countries, posing nearly 100 questions to provide a granular analysis of the profile, mood and behavior of different emerging consumers and the potential of specific products and end-markets.
Stefano Natella, Head of Global Market’s Research at Credit Suisse, said: “Aided by innovations in technology, e-commerce and an optimism broadly driven by the younger consumer, the analysis delivered in this report continues to suggest that even in a challenging economic cycle, structural investment opportunities will continue to benefit investors.”
Giles Keating, Deputy Global Chief Investment Officer at Credit Suisse, said: “Weak currencies, political risk and commodity exposures all contributed to the wide range of consumer sentiment expressed in this year’s report. The negativity in Russia, South Africa and Brazil contrasted sharply with the relative optimism in India, China and Saudi Arabia.”
