Key trends

The consumer and retail industries in the Middle East and Africa are evolving rapidly. Regulatory liberalization, changes in the competitive environment, and evolving consumer lifestyles and channel structures are creating opportunities as well as challenges for consumer companies, distributors and retailers:

Regulatory liberalization

World Trade Organization rules have opened up many regional markets to foreign ownership, allowing multinationals to retain majority control. This key development is driving multinational consumer companies to modify their business models, reevaluate their relationships with local partners, and exert greater control over route-to-market. On the other hand, it is also acting as a driver for local distributors to develop their capabilities and offer greater value to their multinational principals.

Increasing competition

The Western markets that multinationals once focused on have experienced slow¬ing sales because of the global recession. Alternative options are increasingly scarce: BRIC countries—Brazil, Russia, India, and China—have become extremely competitive. Because of these factors, GCC markets have newfound appeal for multinational consumer companies. As a result, multinationals are increasing focus and investment in the region, fueling intensified competition across most categories.

Expansion into emerging markets

As core regional markets, such as those in the GCC, become increasingly saturated, consumer companies are accelerating their investment in emerging markets in the Middle East and Africa. Developing countries, like Syria and Algeria, are steadily opening their markets to foreign investment, and consumer companies are responding by establishing or expanding their presence in these markets.

Evolving channel structure

The rapid emergence of modern retail formats—like hypermarkets, specialty retailers, and convenience stores—is changing the way consumer companies bring their goods to market. Major retail players include both multinational chains, like Carrefour, as well as local players, like Panda. Besides aggressive expansion, these retailers are also looking to build more sophisticated capabilities such as category management, which has important implications for how they interact with manufacturers.

Evolving consumer lifestyles

A growing young population with rising per-capita income is fueling demand for consumer goods. At the same time, consumer lifestyles in the region are also evolving. Greater exposure to Western influences means that global trends, like health and wellness, are growing rapidly. Consumers are also becoming more discerning, driving the need for further category development.

Emerging micro-segments

Recent changes in the economic environment have resulted in the emergence of demographic micro-segments: Consumers with similar characteristics are showing different spending behavior, with some becoming more cautious and price-sensitive as others maintain their spending patterns. This development is creating the need for consumer companies to take a more focused approach to segmentation and create a more targeted portfolio and marketing strategy.


How we help our clients

As the leading global management consultant to the consumer industry, Strategy& has helped local and multinational consumer companies, distributors, and retailers with major strategic and operational decisions. We have worked with many of the leading global and regional players. We bring our clients an unparalleled understanding of the global industry and regional markets, thanks to a diverse team combining highly experienced functional and industry experts.

Our consumer and retail expertise spans a wide range of industries:

  • Packaged food
  • Beverages
  • Consumer electronics
  • Cosmetics
  • General merchandise
  • Food service
  • Luxury
  • General and specialty retail

Our approach focuses on turning strategy into action and ensuring maximum value creation for our clients. We help our clients through all stages of their transformation and growth programs, from strategy development to detailed design to execution management. We have extensive experience across Middle East and Africa, addressing such issues as:

  • Investment and market-entry strategy
  • Growth strategy
  • Brand and portfolio strategy
  • Strategic and business planning
  • Corporate restructuring
  • Customer segmentation and channel strategy
  • Mergers and acquisitions
  • Post-merger integration
  • Route-to-market model
  • Integrated category management (e.g. pricing, assortment management, promotions)
  • Sales and marketing effectiveness
  • Profit margin improvement
  • Sales and operations planning
  • Supply chain restructuring and optimization
  • Organization design and implementation

Current challenges in the consumer products industry

In order to capture the opportunities offered by the rapidly evolving Middle East and Africa consumer markets, both incumbents and new entrants are increasingly pressured to address a number of challenges:

  • What corporate and business strategies do incumbents need to sustain their growth at a time when competition is intensifying and traditional markets are becoming saturated?
  • What regional and international expansion strategies should be pursued by incumbents to ensure profitable and sustainable growth in the long-term?
  • What business models and market entry strategies are likely to yield optimal returns for new entrants?
  • How can multinational players adapt to changing foreign-ownership regulations to balance the benefits of greater control with the market influence of local partners?
  • How should the route-to-market model be adapted to the evolving channel structure and what capabilities need to be developed to capture growth?
  • What are the optimal portfolio and brand strategies for evolving consumer segments?
  • How can players effectively execute their business and operational strategies while upgrading internal capabilities and delivering lasting results?
  • What transformations in governance and operating models will enable the execution of corporate and business strategies
  • What operational changes will enhance efficiency, improve competitiveness, and enable swift adaptability to evolving market conditions?