45 million people live in the six Gulf Cooperation Council (GCC) member states: Saudi Arabia, Qatar, Kuwait, Oman, Bahrain, and the United Arab Emirates (UAE). About 30% of the world’s oil reserves and roughly 23% of its natural gas reserves are in the resource-rich area.
This region has consistently attracted exporters over the years, and there are many reasons for this.
The GCC region is expected to see a rise in consumer spending and a flourishing retail industry, notably in e-commerce, as its GDP surpasses USD 2 trillion in 2023 and continues to grow due to rising employment, especially among women. With large foreign direct investments (FDIs), the GCC’s continuous modernization and diversification initiatives are enhancing its standing as a major center for global trade and economic stability.
Several trends define the growing demand for consumer products in various categories:
- According to Euromonitor, women’s share of the employed population in the GCC is expected to grow from under 16% in 2018 to 20% by 2028, with Saudi Arabia aiming for 30% by 2030. This is going to be a significant driver for the growth of disposal income as well as consumer spending. At the same time, this trend directly affects the growth of categories like personal care and beauty, wellness, luxury, and fashion.
- The GCC started many investment and transformation initiatives to enhance economic diversification. For example, Saudi Vision 2030 (an ambitious economic and social reform plan) emphasizes developing non-oil sectors such as retail, manufacturing, tourism, and entertainment. This creates opportunities for consumer goods in areas like modern cosmetics, dietary supplements, and food tech.
- With its nominal GDP surpassing USD 2 trillion in 2023, the GCC’s share of the MENA region’s economy increased from 44% in 2013 to 51.3%. The region’s robust governance, economic diversity, and business-friendly climate provide a strong basis for sustained resilience, as real GDP growth is predicted to surpass that of several developed economies by 2028.
Pic. #1: “Real GDP Growth Performance of GCC vs Other Markets” (source: Euromonitor)
Because of the trends described above the GCC countries present significant opportunities for innovative consumer goods sectors like food tech, dietary supplements, and modern cosmetics.
However, despite all its attractiveness, the region remains challenging in terms of internationalization: specific local regulations, the trust of local consumers, high competition, and local business cultures make these markets uneasy to penetrate. We describe the challenges and potential success strategies for trendy categories below:
Food tech. The GCC countries help local food tech start-ups with investment to build a more resilient food ecosystem. According to the “Forward Fooding” research project conducted in 2022, total funding in food tech in 2012-2021 in GCC countries was $2.1 bln (76 start-up companies).
However, 85% of the food in these countries is still imported which provides significant opportunities for exporters from other regions and countries.
Trends:
- Innovation in Convenience:High demand for ready-to-eat meals and meal kits among expatriates and busy professionals.
- Sustainability:Increasing interest in alternative proteins (plant-based and lab-grown) and sustainable food technologies.
- Health Consciousness:Focus on health-driven technologies, such as low-sugar, gluten-free or organic offerings.
Challenges:
- Regulations: Food safety and halal certifications are essential.
- Distribution and supply chain difficulty.
Strategies for Success:
- Importation and distribution building:Food safety and halal certifications are essential. The retail industry in the Gulf region is growing explosively. The number of modern supermarkets, hypermarkets, and online food platforms is rapidly expanding, particularly in Saudi Arabia and the United Arab Emirates. Under these circumstances, it’s worth investing in search of a partner who has direct contracts with retailers and KAM departments. The Gulfood exhibition event is mandatory to attend for exporters who plan to penetrate the region.
- Certification: the company has to obtain all necessary certificates in advance.
Pic.#2 Gulfood exhibition (please add a picture if you have one)
Dietary supplements. According to Statista, in the GCC, the revenue in the Vitamins & Minerals market is projected to reach US$323.30m in 2024. This category is rapidly growing in the region.
Trends:
- Preventive Health: Growing awareness about health maintenance, fueled by rising lifestyle diseases and pandemic-driven concerns.
- Personalized Nutrition: Interest in AI-powered solutions that suggest supplements tailored to individual needs.
- Sports and Fitness: High demand for protein supplements and performance-enhancing nutraceuticals among gym-goers.
Pic. #3: Vitamins and Minerals revenue, GCC, $mln (source: Statista)
Challenges:
- Regulations: Depends on the country. In Saudi Arabia, all products must comply with Saudi Food and Drug Authority (SFDA) guidelines and other regional standards.
- Consumer Trust: Educating consumers about efficacy and safety is critical.
Strategies for Success:
- Importation and distribution building:It’s critical to do good quality market research to identify pharmacies and e-commerce channels that have niches for specific products. It’s necessary to partner with a company that has importation capabilities. The Arab Health exhibition event is mandatory to attend for exporters who plan to penetrate the region.
- Consumer Trust:Distributors typically expect new brands to invest in brand ambassadors and other distribution-building instruments because of high competition.
- Regulations: good preparation is paramount. In some cases, certification process might take a couple of years.
- According to Statista, in the GCC, in 2024, the revenue of the Cosmetics market amounts to US$1.33bn. There is a clear trend towards luxury cosmetics (almost 50% of the revenue) as well as natural cosmetics.
Trends:
- Halal and Vegan Products: Strong demand for ethical, cruelty-free, and halal-certified products.
- Skin Health Innovations: Products featuring clean-label ingredients, probiotics, or anti-aging technology.
- Technology Integration: AI and AR tools enabling personalized recommendations and virtual try-ons.
#4: Cosmetics revenue trend, GCC, $bln (source: Statista)
Challenges:
- Regulations: Strict import documentation, halal certifications, and ingredient transparency.
- Competitive Landscape: High penetration of luxury and niche brands.
Strategies for Success:
- Importation and distribution building:Offline sales remain dominant, with over 70% of cosmetics purchases occurring in physical stores. This includes department stores, specialized beauty shops, pharmacies, and hypermarkets. However, e-commerce is getting stronger all the time. It’s recommended to do some market research in advance and understand where specific products might bring additional value (e.g., where certain retailers lack products with unique selling points) and then contact one of their existing distribution contacts or some other potential partner who can potentially collaborate with this chain or e-commerce platform. The local distribution partner should be an experienced player with importation and distribution capabilities.
- Product adaptation: Local audiences might inquire about specific product types, so, some adaptation might be required.
- Marketing: because of high competition with local producers and exporters from all over the world, tailored marketing campaigns have to be planned (e.g. trade marketing and digital marketing campaigns)
All in all, GCC countries represent fantastic opportunities for many trendy product vendors but becoming successful in the region for exporters isn’t a walk in the park. Market penetration in this region requires a lot of planning, and preparation of a detailed strategy, local culture knowledge and respect, and great relationship-building skills.
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