MENA Retailscape 2020 · UAE Bahrain Saudi Arabia Libya Lebanon Others Tunisia Algeria Jordan Egypt...

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MENA Retailscape 2020February 2020

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CONTENTSMENA ECONOMIES

Transitioning beyond oil THE MENA RETAILSCAPE

A continuing evolution SECTOR INSIGHT

Food holds court CHANNEL INSIGHT

eCommerce drives acceptance TRAVEL TALES

The power of inbound spending

ABOUT VISA CONSULTING & ANALYTICS

4

12

8

6

14

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4

MENA ECONOMIES

Transitioning beyond oil

17.30%

23.63%

9.32%7.93%

7.75%

7.53%

4.60%

4.55%

3.83%

3.12%2.19%

1.79%

1.66% 1.54% 1.22% 1.22% 0.83%

Share of GDP per capita in the MENA region, 2018

SOURCE: Nation Master

SOURCE: World Bank

GDP growth in 2018 by country

SOURCE: Statista

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

2021

2020

2019

MENA GDP (% change)

GDP Growth GDP per Capita GrowthSOURCE: World Bank

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

MENA in�ation (consumer prices - % annual)

In�ation RateSOURCE: World Bank

QatarKuwaitOmanUAEBahrainSaudi ArabiaLibyaLebanonOthersTunisiaAlgeriaJordanEgyptSyriaIraqMoroccoYemen

5.3%

3.2%

3.2%

2.9%

2.7%

2.5%

2.3%

2.4%

2.3%

2.2%

1.9%

1.5%

1%

Egypt

Morocco

Bahrain

UAE

Qatar

Algeria

Tunisia

Kuwait

Jordan

Saudi Arabia

Oman

Iraq

Lebanon

Egypt

BahrainMorocco

UAE

MENA

GCC

Qatar

Algeria

Tunisia

Kuwait

JordanSaudi Arabia

Oman

Iraq

Lebanon

Yemen

In�ation by country, 2018

0% 15%10% 20%5%

Egypt

Morocco

Bahrain

UAE

MENA

GCC

Qatar

Algeria

Tunisia

Kuwait

Saudi Arabia

Oman

Lebanon

Consumption growth, 2018

SOURCE: National statistical institutes and central banks, via Focus Economics

1% 3%2%


��

��

��

GDP growth outlook

2019

2020

2021

0.6%

2.6%

2.9%

SOURCE: World Bank

17.30%

23.63%

9.32%7.93%

7.75%

7.53%

4.60%

4.55%

3.83%

3.12%2.19%

1.79%

1.66% 1.54% 1.22% 1.22% 0.83%



SOURCE: World Bank


SOURCE: Statista

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

2021

2020

2019

MENA GDP (% change)


0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018




5.3%

3.2%

3.2%

2.9%

2.7%

2.5%

2.3%

2.4%

2.3%

2.2%

1.9%

1.5%

1%

Egypt

Morocco

Bahrain

UAE

Qatar

Algeria

Tunisia

Kuwait

Jordan

Saudi Arabia

Oman

Iraq

Lebanon

Egypt

BahrainMorocco

UAE

MENA

GCC

Qatar

Algeria

Tunisia

Kuwait

JordanSaudi Arabia

Oman

Iraq

Lebanon

Yemen


0% 15%10% 20%5%

Egypt

Morocco

Bahrain

UAE

MENA

GCC

Qatar

Algeria

Tunisia

Kuwait

Saudi Arabia

Oman

Lebanon



1% 3%2%


��

��

��

GDP growth outlook

2019

2020

2021

0.6%

2.6%

2.9%

SOURCE: World Bank

17.30%

23.63%

9.32%7.93%

7.75%

7.53%

4.60%

4.55%

3.83%

3.12%2.19%

1.79%

1.66% 1.54% 1.22% 1.22% 0.83%



SOURCE: World Bank


SOURCE: Statista

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

2021

2020

2019

MENA GDP (% change)


0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018




5.3%

3.2%

3.2%

2.9%

2.7%

2.5%

2.3%

2.4%

2.3%

2.2%

1.9%

1.5%

1%

Egypt

Morocco

Bahrain

UAE

Qatar

Algeria

Tunisia

Kuwait

Jordan

Saudi Arabia

Oman

Iraq

Lebanon

Egypt

BahrainMorocco

UAE

MENA

GCC

Qatar

Algeria

Tunisia

Kuwait

JordanSaudi Arabia

Oman

Iraq

Lebanon

Yemen


0% 15%10% 20%5%

Egypt

Morocco

Bahrain

UAE

MENA

GCC

Qatar

Algeria

Tunisia

Kuwait

Saudi Arabia

Oman

Lebanon



1% 3%2%


��

��

��

GDP growth outlook

2019

2020

2021

0.6%

2.6%

2.9%

SOURCE: World Bank

17.30%

23.63%

9.32%7.93%

7.75%

7.53%

4.60%

4.55%

3.83%

3.12%2.19%

1.79%

1.66% 1.54% 1.22% 1.22% 0.83%



SOURCE: World Bank


SOURCE: Statista

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

2021

2020

2019

MENA GDP (% change)


0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018




5.3%

3.2%

3.2%

2.9%

2.7%

2.5%

2.3%

2.4%

2.3%

2.2%

1.9%

1.5%

1%

Egypt

Morocco

Bahrain

UAE

Qatar

Algeria

Tunisia

Kuwait

Jordan

Saudi Arabia

Oman

Iraq

Lebanon

Egypt

BahrainMorocco

UAE

MENA

GCC

Qatar

Algeria

Tunisia

Kuwait

JordanSaudi Arabia

Oman

Iraq

Lebanon

Yemen


0% 15%10% 20%5%

Egypt

Morocco

Bahrain

UAE

MENA

GCC

Qatar

Algeria

Tunisia

Kuwait

Saudi Arabia

Oman

Lebanon



1% 3%2%


��

��

��

GDP growth outlook

2019

2020

2021

0.6%

2.6%

2.9%

SOURCE: World Bank

Over the past 5 years, the average rate of inflation in MENA countries has been held below 2% per year, with most countries except Yemen, Egypt and Tunisia remaining under 5%.

The region is expected to grow at a subdued rate of 0.6% in 2019, rising to 2.6% in 2020 and 2.9% in 2021, with a wide range of growth rates among the various economies of the region.

4

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WhiteUse on medium to dark color backgrounds for maximum legibility. This includes photographic backgrounds.



5

l Egypt’s implementation of macro-economic and structural reforms is aimed at stabilizing the economy and attracting more private sector participation. GDP rose 5.6% in 2019, driven by wholesale and retail trade, real estate and construction, gas extraction and tourism.

l Real GDP growth in the UAE, the second largest economy in the Middle East, should pick up in 2020 with the hosting of Expo 2020 – and its boost to tourism and spending – and higher oil prices. Economic diversification and improving the business environment will continue to be the major policy priorities.

l Saudi Arabia has flourished in the past couple of years. New investments and job creation across sectors, the launch of a cinema industry, increased gender parity and freedom of travel for women, mixed gender sporting and cultural events and music concerts have all led to a new-found optimism among residents.

l Kuwait’s growth slowed in 2019 to 0.7% from 1.2% in 2018. While lower oil prices and output curbs weighed on the oil sector, its non-oil growth strengthened.

17.30%

23.63%

9.32%7.93%

7.75%

7.53%

4.60%

4.55%

3.83%

3.12%2.19%

1.79%

1.66% 1.54% 1.22% 1.22% 0.83%



SOURCE: World Bank


SOURCE: Statista

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

2021

2020

2019

MENA GDP (% change)


0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018




5.3%

3.2%

3.2%

2.9%

2.7%

2.5%

2.3%

2.4%

2.3%

2.2%

1.9%

1.5%

1%

Egypt

Morocco

Bahrain

UAE

Qatar

Algeria

Tunisia

Kuwait

Jordan

Saudi Arabia

Oman

Iraq

Lebanon

Egypt

BahrainMorocco

UAE

MENA

GCC

Qatar

Algeria

Tunisia

Kuwait

JordanSaudi Arabia

Oman

Iraq

Lebanon

Yemen


0% 15%10% 20%5%

Egypt

Morocco

Bahrain

UAE

MENA

GCC

Qatar

Algeria

Tunisia

Kuwait

Saudi Arabia

Oman

Lebanon



1% 3%2%


��

��

��

GDP growth outlook

2019

2020

2021

0.6%

2.6%

2.9%

SOURCE: World Bank

Consumer spending accounts for between half and two-thirds of GDP in most countries and is usually a key engine of economic growth.

17.30%

23.63%

9.32%7.93%

7.75%

7.53%

4.60%

4.55%

3.83%

3.12%2.19%

1.79%

1.66% 1.54% 1.22% 1.22% 0.83%



SOURCE: World Bank


SOURCE: Statista

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

2021

2020

2019

MENA GDP (% change)


0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018




5.3%

3.2%

3.2%

2.9%

2.7%

2.5%

2.3%

2.4%

2.3%

2.2%

1.9%

1.5%

1%

Egypt

Morocco

Bahrain

UAE

Qatar

Algeria

Tunisia

Kuwait

Jordan

Saudi Arabia

Oman

Iraq

Lebanon

Egypt

BahrainMorocco

UAE

MENA

GCC

Qatar

Algeria

Tunisia

Kuwait

JordanSaudi Arabia

Oman

Iraq

Lebanon

Yemen


0% 15%10% 20%5%

Egypt

Morocco

Bahrain

UAE

MENA

GCC

Qatar

Algeria

Tunisia

Kuwait

Saudi Arabia

Oman

Lebanon



1% 3%2%


��

��

��

GDP growth outlook

2019

2020

2021

0.6%

2.6%

2.9%

SOURCE: World Bank

5

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THE MENA RETAILSCAPE

A continuing evolution

l Regional retail sector CEOs said they have witnessed a softer market in recent times and most said they were targeting low single-digit growth in 2019.

l While this would be considered very acceptable in mature markets, it’s a far cry from the MENA region’s double-digit growth of years gone by.

l The UAE and Saudi Arabia introduced VAT at 5% on January 1, 2018; Bahrain did so in 2019, with Qatar and Oman due to follow.

l Some retailers have absorbed the cost while others compensated by reorganizing their supply chain. All acknowledge VAT’s direct impact on consumers’ level of disposable income.

l Smaller ‘community’ malls are becoming increasingly popular as places to buy groceries, have lunch, visit the pharmacy and buy a birthday present, all under one roof.

l Delivery and logistics continue to be a challenge for retailers. Same-day delivery has become essential.

22% 77% No.5The GCC’s retail sector is forecast to grow to $308 billion by 2023 from $253 billion in 2018

Saudi Arabia and the UAE will account for 77% of retail sales in the next five years

The UAE is ranked fifth among the top-ten retail destinations in the world

SOURCE: Alpen Capital, 2019

6

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Private Consumption Expenditure (PCE) has increased its contibution to regional GDP and remains a key engine for growth.

The MENA region continues to be the largest untapped opportunity for conversion from cash to card.

At the same time, Private Consumption Expenditure (PCE) has grown in spite of a softening trend in regional GDP growth.

Cash continues to rule most economies due to limited digital acceptance.

20%80%

30% 31% 31%

2016

UnitedStates

APAC(ex. China)

LatinAmerica Canada Europe MENA

2017 2018

Private Consumption Expenditureas share of GDP

6.9%

8.9%

7.7%

4.9%

1.5%2.3%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

2016 2017 2018

Private Consumption Expendituregrowth vs. GDP growth (% change)

PCE GDP GrowthSOURCE: Euromonitor, World Bank

Card Payments OtherSOURCE: Oxford Alpha Fund, 2018

Card penetration (global) Card penetration (select MENA markets)

61%39%68%

32%24%76%

75%25%

40%60%

Kuwait UAE SaudiArabia Jordan Morocco Egypt

Card Payments OtherSOURCE: Euromonitor

4%96%94%

6%

72%28%

23%77%

9%91%

66%34%

2015

28%

20%80%

30% 31% 31%

2016

UnitedStates

APAC(ex. China)

LatinAmerica Canada Europe MENA

2017 2018

Private Consumption Expenditureas share of GDP

6.9%

8.9%

7.7%

4.9%

1.5%2.3%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

2016 2017 2018

Private Consumption Expendituregrowth vs. GDP growth (% change)

PCE GDP GrowthSOURCE: Euromonitor, World Bank

Card Payments OtherSOURCE: Oxford Alpha Fund, 2018

Card penetration (global) Card penetration (select MENA markets)

61%39%68%

32%24%76%

75%25%

40%60%

Kuwait UAE SaudiArabia Jordan Morocco Egypt

Card Payments OtherSOURCE: Euromonitor

4%96%94%

6%

72%28%

23%77%

9%91%

66%34%

2015

28%

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8

SECTOR INSIGHT

Food holds court

Growth in food retail in 2019 was three times the growth in non-food retail. But non-food retail continues to dominate the MENA retail market share.

Food retail growth outstrips non-food in 2019

SOURCE: Visa data

SOURCE: Visa data

SOURCE: Visa data

SOURCE: Visa data

SOURCE: Visa data

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34%

19%

6%

66%

Food

Non-food

63%21%

16%

Food & Grocery QSR Restaurants

14%

58%

5%

Food &Grocery

QuickService

RestaurantsRestaurants

Supermarket shopping is the largest category in 2019, driven by growing demand for health foods,

cereals and processed foods

Fast food and delivery witness largest growth in 2019

24%

20%

17%

11%

9%

7%

5%4% 3%

Share of categories in the overallMENA retail sector in 2019

Retail Goods

Apparel & Accessories

Home Improvement & Supply

Department Stores

Retail Services

Electronics

Others

Entertainment

Discount Stores

0% 10% 20% 30% 40% 50% 60%

4%Retail Goods

-6%Apparel & Accessories

9%Home Improvement & Supply

3%Department Stores

21%Retail Services

12%Electronics

13%Others

7%Entertainment

67%Discount Stores

Growth in category sales in 2019


SOURCE: Visa data

SOURCE: Visa data

SOURCE: Visa data

SOURCE: Visa data

SOURCE: Visa data

��

��

34%

19%

6%

66%

Food

Non-food

63%21%

16%


14%

58%

5%

Food &Grocery

QuickService





24%

20%

17%

11%

9%

7%

5%4% 3%


Retail Goods



Department Stores

Retail Services

Electronics

Others

Entertainment

Discount Stores

0% 10% 20% 30% 40% 50% 60%

4%Retail Goods



3%Department Stores

21%Retail Services

12%Electronics

13%Others

7%Entertainment

67%Discount Stores



SOURCE: Visa data

SOURCE: Visa data

SOURCE: Visa data

SOURCE: Visa data

SOURCE: Visa data

��

��

34%

19%

6%

66%

Food

Non-food

63%21%

16%


14%

58%

5%

Food &Grocery

QuickService





24%

20%

17%

11%

9%

7%

5%4% 3%


Retail Goods



Department Stores

Retail Services

Electronics

Others

Entertainment

Discount Stores

0% 10% 20% 30% 40% 50% 60%

4%Retail Goods



3%Department Stores

21%Retail Services

12%Electronics

13%Others

7%Entertainment

67%Discount Stores



SOURCE: Visa data

SOURCE: Visa data

SOURCE: Visa data

SOURCE: Visa data

SOURCE: Visa data

��

��

34%

19%

6%

66%

Food

Non-food

63%21%

16%


14%

58%

5%

Food &Grocery

QuickService





24%

20%

17%

11%

9%

7%

5%4% 3%


Retail Goods



Department Stores

Retail Services

Electronics

Others

Entertainment

Discount Stores

0% 10% 20% 30% 40% 50% 60%

4%Retail Goods



3%Department Stores

21%Retail Services

12%Electronics

13%Others

7%Entertainment

67%Discount Stores


8

9

$15.1B

41.3% 7.0%

The MENA luxury goods market reached $11.5 billion in 2017 and is forecast to grow at a CAGR of 5.6% over the next five years to

reach $15.1 billion by 2022.

The UAE was the largest luxury market in the region

with a share of 41.3% in 2017 and is expected to retain its top position through 2022.

Saudi Arabia, which is forecast to grow at a CAGR of 7.0%

between 2017 and 2022, will be the fastest-growing luxury

market in the region.

l Food is becoming an intrinsic part of people’s experience in malls and good restaurants are a reason to pick one mall over another. Malls as well as individual stores are being driven to offer a complete shopping experience, not just a place to shop and escape the heat.

l A sharp surge in digital adoption has revolutionized the online food delivery service sector in the GCC. Nearly 87% of food operators in the GCC are listed on food delivery apps and 60% of consumers use apps to order food.

l The internet plays a major role during the discovery process for both online and in-store buyers, with 48% of UAE and Saudi consumers getting their shopping ideas and inspirations online. This is nearly double that of the United Kingdom.

l With an estimated eCommerce market size of nearly $200 million in the GCC and Egypt, nearly 60% of the region’s grocery shoppers have never bought from this category online.

l The average basket size of online grocery shoppers in the region is $144, significantly higher than in-store purchases at $68.

Luxury retail is still sparkling

Fashion, which is the second largest contributor to retail, has significantly dropped volumes.

Discount stores, though a small segment, have seen rapid growth.


SOURCE: Visa data

SOURCE: Visa data

SOURCE: Visa data

SOURCE: Visa data

SOURCE: Visa data

��

��

34%

19%

6%

66%

Food

Non-food

63%21%

16%


14%

58%

5%

Food &Grocery

QuickService





24%

20%

17%

11%

9%

7%

5%4% 3%


Retail Goods



Department Stores

Retail Services

Electronics

Others

Entertainment

Discount Stores

0% 10% 20% 30% 40% 50% 60%

4%Retail Goods



3%Department Stores

21%Retail Services

12%Electronics

13%Others

7%Entertainment

67%Discount Stores



SOURCE: Visa data

SOURCE: Visa data

SOURCE: Visa data

SOURCE: Visa data

SOURCE: Visa data

��

��

34%

19%

6%

66%

Food

Non-food

63%21%

16%


14%

58%

5%

Food &Grocery

QuickService





24%

20%

17%

11%

9%

7%

5%4% 3%


Retail Goods



Department Stores

Retail Services

Electronics

Others

Entertainment

Discount Stores

0% 10% 20% 30% 40% 50% 60%

4%Retail Goods



3%Department Stores

21%Retail Services

12%Electronics

13%Others

7%Entertainment

67%Discount Stores


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10

CHANNEL INSIGHT

eCommerce drives acceptance

SOURCE: Visa data

SOU

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SOURCE: eMarketer

Retail eCommerce sales ($trn) % change % of total retail sales

20172016 2019 2020 20212018

$2.304

$1.845

$3.453

$4.135

$4.878

$2.842

Retail eCommerce sales worldwide, 2016-2021

10.2%8.6% 13.7% 15.5% 17.5%11.9%

24.8%25.6% 21.5% 19.8% 18.8%23.3%

MENA outperforms other regions in growth

0 5 10 15 20 25

SOURCE: Fitch Solutions data

MENA

Latin America

Asia

Central and Eastern Europe

Sub-Saharan Africa

North America and Western Europe

Mar

201

7 - F

eb 2

018

Mar

201

6 - F

eb 2

017

Mar

201

8 - F

eb 2

019

UAE

$184 $163 $144

Mar

201

7 - F

eb 2

018

Mar

201

6 - F

eb 2

017

Mar

201

8 - F

eb 2

019

Emerging markets

$34 $34 $26

Mar

201

7 - F

eb 2

018

Mar

201

6 - F

eb 2

017

Mar

201

8 - F

eb 2

019

Mature markets

$85 $81 $79

UAE consumers lead developing and mature benchmarks in average spend per transaction

3.8%

96.2%

53%

9%

3%

eCommerce Face-to-Face Others

Physical retail dominates share of MENA market in 2019

But eCommerce posts growth almost 7 times higher

eCommerce + OthersFace-to-Face

ContactlessOthers

0%

20%

40%

60%

80%

100%

0%

20%

40%

60%

80%

100%

Contactless payments have seen strong growth in 2019

Percentage of eCommerce by sector in 2019

4x growth in non-food retail

10x growth in food retail

2018-Q1 2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2 2019-Q3 2019-Q4

20.4%

18.8%

18.2%

10.3%

2.6%

2.1%

2.1%

2.1%

1.9%

0.3%

0.0% 5.0% 10.0% 15.0% 20.0%

Discount Stores

Electronics

Entertainment

Retail Services


Retail Goods

Wholesale Clubs

Department Stores


Others

Benchmark emerging markets: Brazil, South Africa, MalaysiaBenchmark mature markets: USA, Canada, UK, Sweden, Australia, Singapore

SOURCE: Visa data

SOU

RCE:

Vis

a da

ta

SOU

RCE:

Vis

a da

taSO

URC

E: V

isa

data

SOU

RCE:

Vis

a da

ta

SOURCE: eMarketer


20172016 2019 2020 20212018

$2.304

$1.845

$3.453

$4.135

$4.878

$2.842


10.2%8.6% 13.7% 15.5% 17.5%11.9%

24.8%25.6% 21.5% 19.8% 18.8%23.3%


0 5 10 15 20 25


MENA

Latin America

Asia


Sub-Saharan Africa


Mar

201

7 - F

eb 2

018

Mar

201

6 - F

eb 2

017

Mar

201

8 - F

eb 2

019

UAE

$184 $163 $144

Mar

201

7 - F

eb 2

018

Mar

201

6 - F

eb 2

017

Mar

201

8 - F

eb 2

019

Emerging markets

$34 $34 $26

Mar

201

7 - F

eb 2

018

Mar

201

6 - F

eb 2

017

Mar

201

8 - F

eb 2

019

Mature markets

$85 $81 $79


3.8%

96.2%

53%

9%

3%





ContactlessOthers

0%

20%

40%

60%

80%

100%

0%

20%

40%

60%

80%

100%





2018-Q1 2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2 2019-Q3 2019-Q4

20.4%

18.8%

18.2%

10.3%

2.6%

2.1%

2.1%

2.1%

1.9%

0.3%

0.0% 5.0% 10.0% 15.0% 20.0%

Discount Stores

Electronics

Entertainment

Retail Services


Retail Goods

Wholesale Clubs

Department Stores


Others

Benchmark emerging markets: Brazil, South Africa, MalaysiaBenchmark mature markets: USA, Canada, UK, Sweden, Australia, Singapore SOURCE: Visa data

SOU

RCE:

Vis

a da

ta

SOU

RCE:

Vis

a da

taSO

URC

E: V

isa

data

SOU

RCE:

Vis

a da

ta

SOURCE: eMarketer


20172016 2019 2020 20212018

$2.304

$1.845

$3.453

$4.135

$4.878

$2.842


10.2%8.6% 13.7% 15.5% 17.5%11.9%

24.8%25.6% 21.5% 19.8% 18.8%23.3%


0 5 10 15 20 25


MENA

Latin America

Asia


Sub-Saharan Africa


Mar

201

7 - F

eb 2

018

Mar

201

6 - F

eb 2

017

Mar

201

8 - F

eb 2

019

UAE

$184 $163 $144

Mar

201

7 - F

eb 2

018

Mar

201

6 - F

eb 2

017

Mar

201

8 - F

eb 2

019

Emerging markets

$34 $34 $26

Mar

201

7 - F

eb 2

018

Mar

201

6 - F

eb 2

017

Mar

201

8 - F

eb 2

019

Mature markets

$85 $81 $79


3.8%

96.2%

53%

9%

3%





ContactlessOthers

0%

20%

40%

60%

80%

100%

0%

20%

40%

60%

80%

100%





2018-Q1 2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2 2019-Q3 2019-Q4

20.4%

18.8%

18.2%

10.3%

2.6%

2.1%

2.1%

2.1%

1.9%

0.3%

0.0% 5.0% 10.0% 15.0% 20.0%

Discount Stores

Electronics

Entertainment

Retail Services


Retail Goods

Wholesale Clubs

Department Stores


Others


10


- Use PMS for print








11

l The GCC region has surged ahead of even developed markets when it comes to internet, smartphone and social media penetration. UAE and Saudi Arabia have 91% and 73% internet penetration; 66% and 62% smartphone penetration; and 99% and 75% social media penetration, respectively.

l The region’s consumers are digitally savvy and seek a broader range of products and new shopping experiences online. Established retailers are making eCommerce a part of their strategies while pure-play retailers are looking at new markets and product categories.

l While consumers relish their ability to click-and-shop from the comfort of their couches, home delivery of products is often hampered and delayed by the lack of area codes for addresses in most of the region.

l Online and mobile payment options are also not always available in the MENA region and most countries still have cash-on-delivery as the primary mode of payment, which adds to the operating cost for eCommerce companies.

l Morocco now has over 26 million internet service subscribers and plans to bring 10,740 villages under 2G, 3G and 4G coverage.

SOURCE: Visa data

SOU

RCE:

Vis

a da

ta

SOU

RCE:

Vis

a da

taSO

URC

E: V

isa

data

SOU

RCE:

Vis

a da

ta

SOURCE: eMarketer


20172016 2019 2020 20212018

$2.304

$1.845

$3.453

$4.135

$4.878

$2.842


10.2%8.6% 13.7% 15.5% 17.5%11.9%

24.8%25.6% 21.5% 19.8% 18.8%23.3%


0 5 10 15 20 25


MENA

Latin America

Asia


Sub-Saharan Africa


Mar

201

7 - F

eb 2

018

Mar

201

6 - F

eb 2

017

Mar

201

8 - F

eb 2

019

UAE

$184 $163 $144

Mar

201

7 - F

eb 2

018

Mar

201

6 - F

eb 2

017

Mar

201

8 - F

eb 2

019

Emerging markets

$34 $34 $26

Mar

201

7 - F

eb 2

018

Mar

201

6 - F

eb 2

017

Mar

201

8 - F

eb 2

019

Mature markets

$85 $81 $79


3.8%

96.2%

53%

9%

3%





ContactlessOthers

0%

20%

40%

60%

80%

100%

0%

20%

40%

60%

80%

100%





2018-Q1 2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2 2019-Q3 2019-Q4

20.4%

18.8%

18.2%

10.3%

2.6%

2.1%

2.1%

2.1%

1.9%

0.3%

0.0% 5.0% 10.0% 15.0% 20.0%

Discount Stores

Electronics

Entertainment

Retail Services


Retail Goods

Wholesale Clubs

Department Stores


Others


SOURCE: Visa data

SOU

RCE:

Vis

a da

ta

SOU

RCE:

Vis

a da

taSO

URC

E: V

isa

data

SOU

RCE:

Vis

a da

ta

SOURCE: eMarketer


20172016 2019 2020 20212018

$2.304

$1.845

$3.453

$4.135

$4.878

$2.842


10.2%8.6% 13.7% 15.5% 17.5%11.9%

24.8%25.6% 21.5% 19.8% 18.8%23.3%


0 5 10 15 20 25


MENA

Latin America

Asia


Sub-Saharan Africa


Mar

201

7 - F

eb 2

018

Mar

201

6 - F

eb 2

017

Mar

201

8 - F

eb 2

019

UAE

$184 $163 $144

Mar

201

7 - F

eb 2

018

Mar

201

6 - F

eb 2

017

Mar

201

8 - F

eb 2

019

Emerging markets

$34 $34 $26

Mar

201

7 - F

eb 2

018

Mar

201

6 - F

eb 2

017

Mar

201

8 - F

eb 2

019

Mature markets

$85 $81 $79


3.8%

96.2%

53%

9%

3%





ContactlessOthers

0%

20%

40%

60%

80%

100%

0%

20%

40%

60%

80%

100%





2018-Q1 2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2 2019-Q3 2019-Q4

20.4%

18.8%

18.2%

10.3%

2.6%

2.1%

2.1%

2.1%

1.9%

0.3%

0.0% 5.0% 10.0% 15.0% 20.0%

Discount Stores

Electronics

Entertainment

Retail Services


Retail Goods

Wholesale Clubs

Department Stores


Others

Benchmark emerging markets: Brazil, South Africa, MalaysiaBenchmark mature markets: USA, Canada, UK, Sweden, Australia, Singapore SOURCE: Visa data

SOU

RCE:

Vis

a da

ta

SOU

RCE:

Vis

a da

taSO

URC

E: V

isa

data

SOU

RCE:

Vis

a da

ta

SOURCE: eMarketer


20172016 2019 2020 20212018

$2.304

$1.845

$3.453

$4.135

$4.878

$2.842


10.2%8.6% 13.7% 15.5% 17.5%11.9%

24.8%25.6% 21.5% 19.8% 18.8%23.3%


0 5 10 15 20 25


MENA

Latin America

Asia


Sub-Saharan Africa


Mar

201

7 - F

eb 2

018

Mar

201

6 - F

eb 2

017

Mar

201

8 - F

eb 2

019

UAE

$184 $163 $144

Mar

201

7 - F

eb 2

018

Mar

201

6 - F

eb 2

017

Mar

201

8 - F

eb 2

019

Emerging markets

$34 $34 $26

Mar

201

7 - F

eb 2

018

Mar

201

6 - F

eb 2

017

Mar

201

8 - F

eb 2

019

Mature markets

$85 $81 $79


3.8%

96.2%

53%

9%

3%





ContactlessOthers

0%

20%

40%

60%

80%

100%

0%

20%

40%

60%

80%

100%





2018-Q1 2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2 2019-Q3 2019-Q4

20.4%

18.8%

18.2%

10.3%

2.6%

2.1%

2.1%

2.1%

1.9%

0.3%

0.0% 5.0% 10.0% 15.0% 20.0%

Discount Stores

Electronics

Entertainment

Retail Services


Retail Goods

Wholesale Clubs

Department Stores


Others


11

SOU

RCE:

Glo

bal M

edia

Insi

ght,

2019

; Vis

a / U

AE

eCom

mer

ce L

ands

cape

, Jun

e 20

19

12

TRAVEL TALES

The power of inbound spending

Inbound spending growth kept pace with domestic spend, with tourists shelling out increasing amounts on food retail.

13.3%

178%

MENA’s annual wellness tourism market is growing 13.3%, its spa industry 15.4%, and its thermal springs sector 30.4%

Electronics is the highest growth

category among inbound retail

spend in Egypt, registering an

increase of 178% in 2019.

SOU

RCE:

Glo

bal W

elln

ess

Inst

itute

Growth in inbound retail in 2019

Growth in tourism spending kept pacewith growth in domestic spending in 2019

Share of inbound retail in each country's overall volumes

Domestic Inbound Inbound

39.2%37.8%

15.6% 15.9%

Domestic

Food

Non-food

SOU

RCE:

Vis

a da

ta

SOURCE: Visa data

SOURCE: Visa data

1.4%

2.7%

5.0%

5.4%

6.1%

11.6%

12.5%

12.5%

13.1%

15.7%

31.5%

Saudi Arabia

Pakistan

Oman

Qatar

Kuwait

UAE

Egypt

Morocco

Jordan

Lebanon

Bahrain

Country share of inbound retail spending volumes

50%

9%

7%

6%

6%

22%

UAE

KSA

Egypt

Bahrain

Morocco

Others

37.6%

32.3%

24.2%

23.0%

19.4%

17.9%

5.5%

5.1%

4.7%

2.3%

Bahrain

Egypt

Morocco

Lebanon

Jordan

UAE

Kuwait

Oman

Qatar

Saudi Arabia

Country-wise growth in inbound retail spending in 2019

��

�

��

�

29.3%27.2%





39.2%37.8%

15.6% 15.9%

Domestic

Food

Non-food

SOU

RCE:

Vis

a da

ta

SOURCE: Visa data

SOURCE: Visa data

1.4%

2.7%

5.0%

5.4%

6.1%

11.6%

12.5%

12.5%

13.1%

15.7%

31.5%

Saudi Arabia

Pakistan

Oman

Qatar

Kuwait

UAE

Egypt

Morocco

Jordan

Lebanon

Bahrain


50%

9%

7%

6%

6%

22%

UAE

KSA

Egypt

Bahrain

Morocco

Others

37.6%

32.3%

24.2%

23.0%

19.4%

17.9%

5.5%

5.1%

4.7%

2.3%

Bahrain

Egypt

Morocco

Lebanon

Jordan

UAE

Kuwait

Oman

Qatar

Saudi Arabia


��

�

��

�

29.3%27.2%





39.2%37.8%

15.6% 15.9%

Domestic

Food

Non-food

SOU

RCE:

Vis

a da

ta

SOURCE: Visa data

SOURCE: Visa data

1.4%

2.7%

5.0%

5.4%

6.1%

11.6%

12.5%

12.5%

13.1%

15.7%

31.5%

Saudi Arabia

Pakistan

Oman

Qatar

Kuwait

UAE

Egypt

Morocco

Jordan

Lebanon

Bahrain


50%

9%

7%

6%

6%

22%

UAE

KSA

Egypt

Bahrain

Morocco

Others

37.6%

32.3%

24.2%

23.0%

19.4%

17.9%

5.5%

5.1%

4.7%

2.3%

Bahrain

Egypt

Morocco

Lebanon

Jordan

UAE

Kuwait

Oman

Qatar

Saudi Arabia


��

�

��

�

29.3%27.2%





39.2%37.8%

15.6% 15.9%

Domestic

Food

Non-food

SOU

RCE:

Vis

a da

ta

SOURCE: Visa data

SOURCE: Visa data

1.4%

2.7%

5.0%

5.4%

6.1%

11.6%

12.5%

12.5%

13.1%

15.7%

31.5%

Saudi Arabia

Pakistan

Oman

Qatar

Kuwait

UAE

Egypt

Morocco

Jordan

Lebanon

Bahrain


50%

9%

7%

6%

6%

22%

UAE

KSA

Egypt

Bahrain

Morocco

Others

37.6%

32.3%

24.2%

23.0%

19.4%

17.9%

5.5%

5.1%

4.7%

2.3%

Bahrain

Egypt

Morocco

Lebanon

Jordan

UAE

Kuwait

Oman

Qatar

Saudi Arabia


��

�

��

�

29.3%27.2%





39.2%37.8%

15.6% 15.9%

Domestic

Food

Non-food

SOU

RCE:

Vis

a da

ta

SOURCE: Visa data

SOURCE: Visa data

1.4%

2.7%

5.0%

5.4%

6.1%

11.6%

12.5%

12.5%

13.1%

15.7%

31.5%

Saudi Arabia

Pakistan

Oman

Qatar

Kuwait

UAE

Egypt

Morocco

Jordan

Lebanon

Bahrain


50%

9%

7%

6%

6%

22%

UAE

KSA

Egypt

Bahrain

Morocco

Others

37.6%

32.3%

24.2%

23.0%

19.4%

17.9%

5.5%

5.1%

4.7%

2.3%

Bahrain

Egypt

Morocco

Lebanon

Jordan

UAE

Kuwait

Oman

Qatar

Saudi Arabia


��

�

��

�

29.3%27.2%





39.2%37.8%

15.6% 15.9%

Domestic

Food

Non-food

SOU

RCE:

Vis

a da

ta

SOURCE: Visa data

SOURCE: Visa data

1.4%

2.7%

5.0%

5.4%

6.1%

11.6%

12.5%

12.5%

13.1%

15.7%

31.5%

Saudi Arabia

Pakistan

Oman

Qatar

Kuwait

UAE

Egypt

Morocco

Jordan

Lebanon

Bahrain


50%

9%

7%

6%

6%

22%

UAE

KSA

Egypt

Bahrain

Morocco

Others

37.6%

32.3%

24.2%

23.0%

19.4%

17.9%

5.5%

5.1%

4.7%

2.3%

Bahrain

Egypt

Morocco

Lebanon

Jordan

UAE

Kuwait

Oman

Qatar

Saudi Arabia


��

�

��

�

29.3%27.2%





39.2%37.8%

15.6% 15.9%

Domestic

Food

Non-food

SOU

RCE:

Vis

a da

ta

SOURCE: Visa data

SOURCE: Visa data

1.4%

2.7%

5.0%

5.4%

6.1%

11.6%

12.5%

12.5%

13.1%

15.7%

31.5%

Saudi Arabia

Pakistan

Oman

Qatar

Kuwait

UAE

Egypt

Morocco

Jordan

Lebanon

Bahrain


50%

9%

7%

6%

6%

22%

UAE

KSA

Egypt

Bahrain

Morocco

Others

37.6%

32.3%

24.2%

23.0%

19.4%

17.9%

5.5%

5.1%

4.7%

2.3%

Bahrain

Egypt

Morocco

Lebanon

Jordan

UAE

Kuwait

Oman

Qatar

Saudi Arabia


��

�

��

�

29.3%27.2%





39.2%37.8%

15.6% 15.9%

Domestic

Food

Non-food

SOU

RCE:

Vis

a da

ta

SOURCE: Visa data

SOURCE: Visa data

1.4%

2.7%

5.0%

5.4%

6.1%

11.6%

12.5%

12.5%

13.1%

15.7%

31.5%

Saudi Arabia

Pakistan

Oman

Qatar

Kuwait

UAE

Egypt

Morocco

Jordan

Lebanon

Bahrain


50%

9%

7%

6%

6%

22%

UAE

KSA

Egypt

Bahrain

Morocco

Others

37.6%

32.3%

24.2%

23.0%

19.4%

17.9%

5.5%

5.1%

4.7%

2.3%

Bahrain

Egypt

Morocco

Lebanon

Jordan

UAE

Kuwait

Oman

Qatar

Saudi Arabia


��

�

��

�

29.3%27.2%





39.2%37.8%

15.6% 15.9%

Domestic

Food

Non-food

SOU

RCE:

Vis

a da

ta

SOURCE: Visa data

SOURCE: Visa data

1.4%

2.7%

5.0%

5.4%

6.1%

11.6%

12.5%

12.5%

13.1%

15.7%

31.5%

Saudi Arabia

Pakistan

Oman

Qatar

Kuwait

UAE

Egypt

Morocco

Jordan

Lebanon

Bahrain


50%

9%

7%

6%

6%

22%

UAE

KSA

Egypt

Bahrain

Morocco

Others

37.6%

32.3%

24.2%

23.0%

19.4%

17.9%

5.5%

5.1%

4.7%

2.3%

Bahrain

Egypt

Morocco

Lebanon

Jordan

UAE

Kuwait

Oman

Qatar

Saudi Arabia


��

�

��

�

29.3%27.2%

SOU

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Vis

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12

13

l The World Expo 2020 in Dubai and FIFA World Cup 2022 in Qatar will headline the multiple mega events across GCC through 2023 that are expected to boost inbound tourism.

l The World Expo 2020 Dubai Executive Body, which oversees the event, estimates that it will add AED 89 billion overall to the UAE economy and create more than a quarter million jobs.

l Saudi Arabia expects tourist numbers to rise from 40 million to 100 million. Tourism-related jobs are set to rise from 3% to 10% of GDP by the year 2030.

l Under Saudi Arabia’s new tourist visa program, a part of its Vision 2030, the kingdom has started issuing one-year multiple-entry visas, allowing tourists to spend up to 90 days in the country.

l After a slump following Arab Spring, tourists are now flocking back to Egypt thanks to its current stability. The number of tourists expected to visit Egypt in 2020 is set to top 15 million.

l Geo-political tensions have led to many countries issuing travel safety warnings for some countries in the region. Lebanon and Jordan are particularly affected as both are key destinations for international and GCC travelers.

13


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SOU

RCE:

EY,

201

9; W

orld

Tour

ism

Org

aniz

atio

n, 2

019

14

Visa ConfidentialMerchant Analytics Capabilities | CEMEA Data Science | October 20181

Key business questions that can be answered

Evaluate your presence in relation to

high growth/ volume pockets

Identify potential

partnerships to help drive

growth

1 2

Measure the loyalty/

engagement of your

customers

Understand your customer

profile and spend

preferences

4 5

Customer acquisition Engagement of existing customers

Entering new markets + Targeting new segments

Evaluate the performance

of brands/ product lines

3

Control churn + Customize right channels

Product performance

Provide insights into brand/product performance

Visa ConfidentialMerchant Analytics Capabilities | CEMEA Data Science | October 20182

Fusing VisaNet data with client and external market data

Transactions +(Frequent flyer program/Retail loyalty program)

Product/Brand mapping

Loyalty data

Itemized data(Airlines booking/Retail SKU/Telecom usage)

(Physical entity mapping in case of brick and mortar stores)

Industry/Market trends(Euromonitor data on merchant segment growth trends )

Intelligence derived through data fusion

Product mix performance

Cross-merchant spending

Destination market

spendingMarket

benchmarkingLoyalty

behavior Channel affinity

For more information, please contact your Visa Account Executive or email Visa Consulting & Analytics at [email protected]. You can visit us at Visa.com or on YouTube.

ABOUT VISA CONSULTING & ANALYTICS

We are a global team of payments consultants, data scientists and economists across six continents.

The combination of our deep payments consulting expertise, our economic intelligence and our breadth of data allows us to identify actionable insights and recommendations that drive better business decisions.

l Our consultants are experts in strategy, product, portfolio management, risk, digital and more with decades of experience in the payments industry.

l Our data scientists are experts in statistics, advanced analytics and machine learning with exclusive access to insights from VisaNet, the largest digital payments network in the world.

l Our economists understand economic conditions impacting consumer spending and provide unique and timely insights into global spending trends.

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