Jeddah / Riyadh – November 26, 2014 – Perceptions about private label are overwhelmingly favourable — more than two-thirds of KSA respondents (68%) say store-brand quality has improved over time, according to a new study by Nielsen, a leading global provider of information and insights into what consumers watch and buy. Price is a primary driver of purchase intent among 72% of KSA respondents, but quality is important, too. More than half of KSA respondents (63%) believe private labels offer extremely good value for money.
The Nielsen Global Survey of Private Label polled more than 30,000 Internet respondents1 in 60 countries to understand how consumer perceptions about private label quality, value, assortment and packaging translate into sales around the world.
In Saudi Arabia, private label development is still in its infancy, representing 1% or less of annual dollar sales.
“In Saudi Arabia around 40% of FMCG sales are routed through modern trade however ironically enough, incidence of private labels is low which can be attributed to limitations on retailers part to come up with strong private labels as well as consumers’ brand consciousness,” said Arslan Ashraf, Managing Director, Nielsen Arabian Peninsula.
National brands are familiar and provide an assurance of quality; as a result, they generate significant loyalty. Indeed, 49% of KSA respondents say they’re loyal to name-brand products. Poor quality perceptions and strong brand loyalty can pose significant barriers to private label growth.
“Brands will continue to dominate in Africa/Middle East for the near future,” said Onur Yuksel, retail services leader for Nielsen Middle East, North Africa and Pakistan. “Private label growth is heavily dependent on the spread of modern trade, which has relatively low penetration throughout the region and is primarily available in urban areas only. Future development will be largely dependent on how retailers monitor the performance of new launches and use that information to develop the right products at the right price.”
ABOUT THE NIELSEN GLOBAL SURVEY
The Nielsen Global Survey of Private Label was conducted between Feb. 17 and March 7, 2014, and polled more than 30,000 consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America. The sample has quotas based on age and sex for each country based on its Internet users and is weighted to be representative of Internet consumers. It has a margin of error of ±0.6 %. This Nielsen survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60 %Internet penetration or an online population of 10 million for survey inclusion. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.
1 While an online survey methodology allows for tremendous scale and global reach, it provides a perspective on the habits of existing Internet users, not total populations. In developing markets where online penetration is still growing, audiences may be younger and more affluent than the general population. In addition, survey responses are based on claimed behavior, rather than actual metered data.
Nielsen N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence and mobile measurement. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA, and Diemen, the Netherlands. For more information, visit www.nielsen.com.