Research in the Gulf

Victoria Zagorsky

In 2012 the Middle Eastern research market contracted 4.3%, to a market estimated atUS 265 million, according to ESOMAR’s latest Global Market Research Report. The decline in research investment can be attributed to the sluggish economic performance due to the political uncertainly and social unrest in some of the countries. The Arab Spring that swept across the Middle East in 2011 had a profound impact on the Egyptian research market, which recorded a decline of 11%. The civil war in Syria led to major losses in the research sector of the entire Levant (Syria, Jordan and Lebanon). And due to the international sanctions, Iran saw its research revenues drop 30%.

The Middle East has always been a two-speed region, but as the political turmoil took a heavy toll on the economy of some of the countries, the divide between these countries and the oil-exporting Gulf Cooperation Council (GCC) states became even more dramatic. These Gulf countries (UAE, KSA, Kuwait, Bahrain, Oman, and Qatar) have a combined population of 42 million, and their GDP is worth over $1.3 trillion.

These oil-exporting countries grew at healthy rates largely owing to expanding oil production, strong public spending and foreign investment. In 2012, Qatar’s economy expanded by 6.6% thanks to the increased infrastructure spending as the country prepares for the FIFA World Cup 2022. The UAE economy also records strong performance driven by recovery in construction and real estate, as well as ongoing growth in tourism sector. If Dubai succeeds in its bid for the World Expo 2020, its economic growth is expected to accelerate further.

It is not surprising that while troubled markets affected by political turbulence saw their research revenues fall considerably, GCC states continue to be the strongest performer of the region. These countries account for more than half of the research turnover in the Middle East, and record substantial growth of 7.1% due to robust economic performance.

As the prospects for growth remain strong, the GCC states represent a lucrative market with considerable opportunities for global brands.

Three interesting characteristics of the GCC states include youthful population, increasing expan sion of women’s participation in all aspects of public life, and heterogeneity due to the high expat ratio.

Youthful region. In the GCC states, according to a Booz & Company report, one-third to one-half of the population is under the age of 25, making it the most youthful region in today’s world. People under 25 account for 51.5%of the population in Oman, 50.8 percent in Saudi Arabia, 43.9% in Bahrain, 37.7% in Kuwait, 33.8% in Qatar, and 31% in the United Arab Emirates.

Empowered women. Participation of GCC women in all aspects of public life is expanding as they move beyond their traditional roles. They do not only participate in the workforce, but also increasingly take on leadership positions across a range of sectors and industries. In Saudi Arabia, women account for over 60% of university graduates.

Expat population. Heterogeneity of the population poses one of the key challenges for researchers and marketers in the GCC. Expatriates account for nearly 48% of the GCC’s total population. Foreigners in Qatar are estimated at 87% of the total population, while they stand at around 84% in the UAE. Expatriates originate primarily from Asia, Africa and Middle East, and represent culturally diverse communities.

Research in the GCC

Research turnover in the GCC totals $148 million, with quantitative approaches accounting for 80% of the total spend in the region. Key research buyers include FMCG companies, followed by telecommunications sector and financial services. Public sector accounts for a relatively small share of research spend.

Online data collection to gain traction. Traditional research market sector rules in the GCC, with face-to-face dominating data collection approaches. 75% of surveys are conducted face-to-face, while online approaches account for less than 1% of quantitative research. It is interesting to note that according to Ipsos Research, the GCC has the highest number of internet users in the region, with a penetration of 61%. The online coverage is led by the UAE (75%), Kuwait (64%) and Qatar (61%).  In these countries the internet penetration is comparable to the developed economies of Europe (73%).

Internet has become an integral part of everyday life of GCC consumers, and there is much more to the digital world here than searching for information, checking email, downloading content and connecting with friends. From product research and online shopping to making reservations to banking on the go, GCC consumers are using digital technology every step of the way. Online education is gaining popularity, with Dubai-based Hamdan bin Mohammed e-University becoming one of the first accredited e-learning academic institutions in the Arab World to offer degree programmes online.

However, when in it comes to research, in contrast to the developed markets where online methods have become mainstream, the GCC states continue to rely heavily on a face-to-face data collection.

While challenges of migrating existing projects such as trackers to the new mode need to be addressed, online data collection is destined to gain traction as market research buyers in the GCC increasingly expect greater return on investment and faster turnaround.

Mobile: a promising research technique. According to research by Google, UAE tops global smartphone penetration, with 73.8% mobile subscribers carrying devices in their pockets. Smartphones are primarily used by the UAE consumers to browse the Internet (76%), check email (74%), share a photo or video (77%) and access social media (70%).

Mobile research in the GCC, however, is still in its infancy. Research clients seem increasingly interested in this methodology due to its relatively low cost, faster turnaround, higher response rates, and ability to get insights into customer experiences at the point of interaction.

Since mobile research is self-completed, interviewer bias is eliminated leading to an improved accuracy of the findings. This is especially critical in the GCC countries where severe acquiescence bias is observed . Survey takers have a tendency to agree with what is presented to them, as well as giving highly positive feedback. Being polite, friendly, respectful and agreeable in the social setting is at the core of the Arab culture. To tackle this challenge, one of the common practices involves interviewers communicating to the respondents prior to the survey that objective feedback is sought and no responses will come across as disrespectful or impolite. However, since Arab respondents may still be reluctant to share negative feedback when a survey is conducted by an interviewer in the street or at their place of the residence, online and mobile research can help obtain more objective and accurate data.

While mobile research may not be a solution for all research needs, it looks a very promising research technique, and it is likely to gain greater traction in the GCC states as more case studies are shared in the marketplace.

Innovative research methods. The fact that social media played an instrumental role in shaping political debates in the Arab Spring testifies that the penetration and the level of engagement are high in the Middle East.

UAE has a Facebook penetration rate of approximately 43%, with the fairly equal distribution of male (52%) and female (48%) users. Over the past six months, the penetration grew by almost 6%. Those aged 13-21 make up only 12% of Facebook users in the UAE, while those in their 30s (31-39) represent the fastest growing segment.

Other social media are also gaining popularity. In 2013, Arabic emerged as the fastest growing language on Twitter. In March 2013, Arab Twitter users generated 336 million tweets – almost double the number of tweets generated in March 2012.

Social media analytics, however, remains largely underutilised. While barriers to its adoption may include absence of a well-rounded business case and difficulty in measuring ROI, social media analytics is crucial in uncovering customer sentiment, obtaining insights into needs, as well as identifying category influencers.

Similarly, other innovative research techniques such as online communities, crowdsourcing, and neuromarketing currently see limited adoption.

Despite international and local brands in the GCC states seek innovative approaches to research, agencies still rely heavily on traditional techniques.

It is likely that the transformation of the research industry in the GCC will be driven by research clients that increasingly demand innovation. Opportunities in the GCC are immense, and market research suppliers should consider incorporating online and mobile methods as well as emerging research techniques into their toolboxes to deliver value to clients.

Victoria Zagorsky is the Editor-in-Chief of Insight Middle East and Africa