(Gulf News (United Arab Emirates) Via Acquire Media NewsEdge) Dubai: This year will see more UAE consumers opening their wallets and opting for convenience, with household expenditures, credit card uptake and online shopping — all forecast to increase this year, experts told Gulf News.
The key trends will be influenced by several factors, including inflation, renewed confidence, increasing reliance on mobile technology, and improved economic conditions. Industry sources also cast a spotlight on high consumerism and growing disposable incomes, although cost-cutting will remain a lifestyle choice for some.
Fatima Sherif, research analyst at Euromonitor International, said the growing disposable income, continued expansion in hospitality and retail sectors are expected to contribute to the growth in consumer demand.
As rents have increased, accommodation spending will eat a chunk of many consumers' budgets this year. Some money-savvy residents will cushion the impact by moving to more affordable properties and neighbourhoods.
"[In my opinion}, expenditure on rentals will take up more of people's income this year. Yet we are already experiencing people downsizing to reduce expenses, moving from villas to apartments and even sharing to reduce costs. Clients are also talking about moving to other emirates to reduce overheads," Steve Gregory, managing partner at Holborn Assets, told Gulf News.
Another trend that will likely shape 2014 is increased online shopping, thanks to the rapid growth in smartphone and tablet PC ownership in the country. According to Euromonitor, internet retailing is expected to increase this year by 13 per cent in current value terms.
"Not only are consumers spending more time online, they are also becoming very tech-savvy in the sense that they are more accustomed to making online transactions to fit with the more convenient lifestyle that they seek," said Fatima.
With the economy back on track, however, there is renewed optimism in the UAE that will likely encourage a return to high credit card usage.
"There is a return of positive sentiment with the Expo 2020 win... While people are a bit wary with [plastic money] it is easy to get carried away with and spend with credit cards," said Ashok Sardana, managing director at the Continental Group.
"I see credit card use going up and people maxing out their cards to meet expenses and then taking further cards to support their spending. We are coming back into the cycle of boom," added Gregory.
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