Consumer appetite for local products, e-commerce platforms grows amid COVID-19: Study

A joint study conducted by Galal and Curway Management Consulting and Orient Planet Research has shown that the novel coronavirus (COVID-19) pandemic has had a noticeable impact on how consumers shop.

The results have shown the pandemic’s noticeable impact on the loyalty links between brands and their customers, and marked a clear change in shopping behaviours.

It showed that consumers in the Middle East are more inclined to buy products that meet their requirements in terms of health benefits and added value. The study also sheds light on the increasing demand for local and sustainable products.

The study indicated that consumers prefer purchases through e-commerce platforms, because they provide wider options at competitive prices, in addition to home delivery services that provide greater security through social distancing.

It is estimated that the year 2020 witnessed a growth in the demand for e-commerce platforms and free delivery of goods services by six to ten times, compared to the average annual growth rate.

“We notice that the behavioural patterns of consumers in the region have changed and will not return to what they were before the pandemic,” said Asim Galal, Director and Co-Founder of Galal and Croway Management Consulting, “Inclusive marketing channels will play a very important role in guiding consumers’ choices as they allow them to have an excellent shopping experience.”

Galal added that not only was this the new normal, but that retailers should keep pace with this transformation, reformulate their work methodologies, and create new solutions in line with emerging consumer expectations.

This is necessary to ensure that retailers continue to compete and maintain their presence in the market, he noted.

On his part, Nidal Abuzki, General Manager of Orient Planet Group of which Orient Planet Research is an independent unit, said, “The pandemic has imposed great challenges in terms of global supply chains and logistics, and made markets and consumers more aware of the importance of local and sustainable products.”

“Over the past period, we have witnessed a growing consumer demand for local products due to their wide availability,” he added, “More consumers are keen to support the local economy and contribute to creating job opportunities.”

Abuzky noted that there is no doubt that understanding new consumer behaviours should be the top priorities of brands and retailers today.

It has also become necessary for companies selling through traditional outlets or digital platforms to enhance their flexibility and ability to keep pace with the process of change. This comes in light of the need to maintain their market share and customer base during the current year and the future in general.

The major global brands are among the groups most affected by the economic repercussions of the pandemic, as is the case GNC, AT&T, and Victoria’s Secret, which closed many of their stores around the world. Debenhams and Laura Ashley have also joined brand casualties of COVID-19 over the past year.

The number of shoppers during the holiday season last year in the US registered a decrease of about 4 million compared to the previous year. Meanwhile, the average purchases per consumer decreased by nearly $50 during the holiday season, compared to the same period in 2019.

The repercussions of the pandemic also affected the Middle East, as the region witnessed an unprecedented shift towards online purchases. This came in addition to an increase in the use of Internet platforms to purchase daily commodities and deliver food.

And at the beginning of April last year, Majid Al Futtaim reported a three-fold increase in the volume of online orders. Delivery services were one of the few sectors that recorded employment growth over the past nine months.

Despite the scale of the challenges, the outlook is promising. The researchers expect that the effects of the epidemic will begin to diminish with the approaching second half (H2) of the year and the vaccination of a large number of people. This will pave the way for a gradual return to the normal pace of business and economic sectors.