MEA consumers begin 2024 with slight improvements in confidence but eroded purchasing power

FrontierView’s fundamental assumptions and key actions for planning 2024 strategies

Multinationals in the consumer sector are facing a challenging 2024 planning period. Headline inflation is coming down, but consumers are more price conscious than ever. Global HQs have high expectations from the MENA region, but Saudi and UAE consumers are becoming ever more challenging to sell to. The region includes global top performers, such as the GCC, but also severely challenged markets, such as South Africa, Turkiye and Egypt. 

As executives confirm plans for 2024 across their MEA portfolio, they can use our brief set of top assumptions to align their organizations internally. 

Executives will also need to monitor financial risk next year—use our MEA FX and Inflation Trackers for the latest data and forecasts in the region.

Suggested Actions to Take for Multinationals in the Region

  • Market and Product Portfolio Strategy:
    • Double down on stronger markets, such as the UAE and Saudi Arabia. 
    • Revise market assumptions and limit financial risk exposure to Egypt and Turkiye. Most MNCs are limiting expectations for Egypt in 2024 but are maintaining strong growth targets for Turkiye, though they are becoming more selective about the distributors and retailers they are working with.
    • Revising market size assumptions based on changing workforce localization policies and thus the expat population across the GCC.
    • Invest time and focus into exploring periphery markets across Sub-Saharan Africa as well as Iraq.
    • Introduce new products to support price increases and better target high-income segments.
    • Focus more on premiumization and niche products to more competitively connect with the preferences of high-income consumer needs in the market.
    • Return the focus from supply availability to more competitive marketing.
  • Cost Strategy:
    • Focus on more conscious, itemized collection and internal (HQ) and external communication of costs.
    • Evaluate new locations for new hiring where possible; consider flexible, work-from-home roles or employment in Egypt, Jordan, and Turkiye. Assume higher talent costs for new hires in Saudi Arabia.
    • Prioritize talent retention in cost allocation.
    • Consider longer contracts with service providers, rents, and others to prevent major cost volatility.
    • Hold local supplies more efficiently (vs. 2022) to reduce storage and logistics costs. 
    • Evaluate localization investments in top markets, but remain cautious about boosting local investments to reduce costs, as shipping costs have fallen.

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