Domestic spending: The backbone of UAE economy

Dubai / Emirates Business

According to a report on consumer card spends for the first quarter of 2016 by
Network International, the
leading payment solutions provider in the MENA region, domestic card spends in the country have increased by 12% in the first quarter of 2016 compared to the same period last year.
The report, based on credit and debit card transactions in the UAE, found that spending by UAE-issued cards continues to show the strongest growth along with the rest of the countries in the GCC whose spends have increased by 3%. Overall card spending in the country has increased by 7%, largely due to the influence of regional consumers while e-commerce card spends have grown by a staggering 27%
Bhairav Trivedi, Chief Executive Officer, Network International, commented: “Domestic card spenders in the UAE continue to remain the most positive influence on the economy’s growth. With increased card spending seen from the GCC countries, savvy retailers should continue to gear their marketing strategy toward regional consumers’ attitudes and preferences as they emerge to be the largest target market for the country’s business owners. Additionally, online spends have increased more than ever before and represent the changing shopping preferences of customers in the country. Retailers will have to adopt to these shifting patterns and expand their online offerings to take full advantage of the growth potential of e-commerce.”

TOURISM TRENDS AFFECT SPENDS
Network International’s 2016 card spends report for Q1 also finds that overall tourism spends declined by 6% in the UAE. Due to a continuous appreciation in the US Dollar along with a bullish global economic outlook and a fall in the prices of crude oil, the largest declines came from China (26%) and Russia (24%).
While overall card spending from Europe and North America has decreased by 3% and 5% respectively, the following countries display strong positive spending growth for the first three months of 2016: Finland (+28%), United Kingdom (+15%), and Ireland (+15%).

HUNGRY FOR MORE AND MORE…
The most promising sector in the UAE is undoubtedly the F&B industry with increased domestic card spending of 19% and overall card spends increasing by a healthy 17%. Top international card spending growths came from the MEA region including Saudi Arabia (+31%), Egypt (+29%) and Qatar (+27%). However, Americans also displayed an increased appetite with a strong 20% growth while the UK had a positive 12% growth in the sector.