Swisse Credit surveyed consumers in eight countries including Saudi Arabia to find out more about emerging markets.1 Saudi Arabia consumers seem quite optimistic. Saudi Arabia was the number one country in terms of purchasing smart phones for the year. Credit Swiss suggests that “higher income markets were key drivers of the rise in ownership of smart phones.2 Saudi Arabia was the only country which showed a “rise in wage expectations;” 37 percent of those surveyed responded that within the next six months they expect to see their finances improve.3 Also 25 percent thought this is “the opportune time to make a big-ticket purchase.”4 The Credit Swisse analysts point out that although Saudi Arabians show a high level of savings they are optimistic about the future. Saudi Arabia is the largest consumer market in the Middle East.
KPMG reports in their 5th Annual Consumers and Convergence that globally consumers in general eager for new technologies and personal tech to use at home or for their business. Saudi Arabian participants were surveyed over the phone whereas the other surveys (except for Nigeria) were taken online. Although the respondents were interviewed on the telephone in order to meet the criteria each respondent needed to possess a laptop computer, a notebook computer, tablet computer, smart phone or mobile phone. KPMG noted that the overwhelming adoption of smartphones by consumers has changed the shopping experience in department stores. They report that over 38percent of the respondents (in all the countries participating with the survey) use their smartphone when in a department store to access coupons.5
_______________________________________________________________________
1. Swisse Credit, 2012
2. Ibid., para. 7
3. Ibid., para. 8
4. Ibid,. para. 9
5. KGMB, 2011, para. 21
The following tables have been made using the data available from the Kingdom of Saudi Arabia’s Central Department of Statistics. They are based upon the 2006-2007 censuses. The tables provide data based on the monthly average expenditures for communications for eight different demographic subsets.
Table 1 presents the monthly communications expenditures based on the gender of the head of the household. The data shows that males spent 830 SAR and females spent about half that amount, 454 SAR.
Table 1. Saudi Arabia. Monthly Communications
Expenditures by Household Head Gender
Table 2 presents the census data for monthly communications expenditures on two groups: appliances and communications. Approximately eighty two percent of the monthly communications expenditures is spent for communication costs such as monthly fees. Eighteen percent goes towards purchasing communication appliances.
Table2. Saudi Arabia. Monthly Communications
Expenditure Groups.
Table 3 depicts the educational level of the person spending money for communications expenditures in the households. The ranking correlates with the level of education of the person with purchasing power. Ranking number 1 is the Post Graduate educational level which the census reported a monthly expenditure of 1333 SAR. The rankings down through ranking 8 are the educational levels under post graduate to illiterate. Illiterate is at ranking 8 with a monthly expenditure reported at 506 SAR.
Table3. Saudi Arabia. Monthly Communications
Expenditures by Educational Level.
Table 4 shows the monthly communications expenditures based on household size. The largest household size is designated 10+ and a monthly expenditure of 1034 SAR is reported. For the households with 6 to 4 members the monthly expenditure for communications is 765 SAR. The lowest ranking is ranking number 5; the household size is 1 person and the monthly communication expenditure is reported at 260 SAR.
Table4. Saudi Arabia. Monthly Communications
Expenditures by Household Size.
Table 5 is based on the type of tenure, for example, ranking 1 is 861 SAR for those monthly communications expenditures in which the appliance is owned. Ranking two is when the communications appliance is provided by the employer with a reported monthly expenditure of 782 SAR. Ranking 3 addresses communications appliances which are rented with a reported amount of 743 SAR. Finally, the last is ranking 4 “other” and 528 SAR is spent.
Table5. Saudi Arabia. Monthly Communications
Expenditures by Type of Tenure
Table 6 is the monthly communications expenditure ranked by type of household unit. The two top rankings are: (a) ranking one is Villa at 1143 SAR per month spent on communications and (b) a floor in a villa at 851 SAR per month for communications. Ranking 3 refers to apartments and ranking 4 to a traditional house.
Table 6. Saudi Arabia. Monthly Communications
Expenditures by Type of Household Unit.
Table 7 displays the monthly communications expenditures ranked by marital status. The top two rankings are (a) married with 838 SAR per month spent on communications and (b) never married with 762 SAR per month spent on communications. The last ranking, number 4 is for the marital status of divorced with the amount 437 SAR spent per month for communications.
Table7. Saudi Arabia. Monthly Communications
Expenditures by Marital Status.
Table 8 depicts the monthly expenditure range based on monthly overall expenditures compared to the monthly expenditures on communications. The ranking of the communications expenditures is proportional to the overall monthly expenditures. The range of the top three rankings shows overall monthly expenditures from 9000 SAR to 25000 SAR. The corresponding amount spent monthly on communications of the top three rankings is from 939 SAR to 1928 SAR. The top three groups spending the most on overall monthly expenditures spend the most on monthly communications expenditures.
Table 8. Saudi Arabia. Monthly Communications
Expenditures comparing Overall Monthly
Expenditures to Monthly Communications.
The data shows that almost 82 percent of the expenditures are related to communication costs when compared to communication appliances. Males dominate the communications expenditures with almost twice the monthly amount spent compared to females. Married and never married spend almost twice the amount on communications then widowers and the divorced. The monthly expenditures on communications correlate to the degree of education of the individuals. Similarly the amount of spending on communications is related to the household size, and to the overall monthly expenditures, the type of household (how expensive the household unit is), and to some degree on the type of tenure.
The ideal primary target of communication companies should be married men with post-graduate degrees who have a large household and have an overall monthly expenditure of greater than 25000 SAR plus live in privately owned villas. The two surveys conducted by KGMB and Swisse Credit discussed in the Introduction indicate that smartphones are very popular in Saudi Arabia. It is suggested that the company focus on offering services which are necessary for smart phone users as their seller’s niche in the communications sector.
Credit Swisse Analysts. (2012).Saudi Arabia a bright spot in the emerging market consumer story. Zawya. www. zawya.com. February 23. Web. Accessed 3 March 2012 from http://www.zawya.com/story/ZAWYA20120223044827/Saudi_Arabia_a_bright_spot_in_the_emerging_market_consumer_story/
Kingdom of Saudi Arabia. (2006/2007). Average Monthly Expenditures of Saud Household by Major Expenditures. Central Department of Statistics and Information. Web.
KPMG. (2011). KPMG’s 5th Annual Global Consumer and Convergence Survey Confirms Tred of Accelerated Pace of Consumer Adoption of New Digital Business Models. www.kpmg.com. 5 December. Web. Accessed 1 March 2012 from http://www.kpmg.com/global/en/issuesandinsights/articlespublications/press-releases/pages/consumer-convergence-5-survey.aspx
