Wednesday, Mar 16, 2016

Dubai: The UAE’s domestic non-cash consumer spend increased 13 per cent in 2015 compared to 2014, according to Network International, a payment’s solutions provider that processes more than 50 per cent of all transactions across UAE.

The report, based on credit and debit card transactions in the UAE, found that spending by UAE-issued cards has remained by far the largest in value over the past two years and has remained steady between Dh9 billion and Dh10 billion per month and the overall card spends in the UAE grew by 9 per cent last year over 2014.

“The UAE economy, driven by diversification into non-oil revenues, has borne resilience to current market dynamics, as indicated by our analysis of card-spending data over the past year. Our analysis indicates some strong trends that can be leveraged by retailers and merchants in the UAE to bolster marketing strategies,” said David Mountain, Chief Commercial Officer, Network International

Network International’s full year 2015 consumer spending data shows that domestic spenders were the highest spending group in the UAE last year with the United States, Saudi Arabia, Qatar and Kuwait also making it to the top spenders list.

Supermarkets spends a major component of domestic consumption grew 9 per cent in 2015. However, there was a 4 per cent decline in per purchase spend of the sector from Dh212 to Dh203

GCC spending in the country increased by 15 per cent last year while North American spends showed a 12 per cent growth. Among the top 7 tourist spenders, Qatar displaced Russia to take the fourth spot overall in the UAE.

The appreciation of the dollar (and thus the dirham) had a negative effect on tourist spends from non-pegged currencies, with repercussions especially dominant in Asian and European spending. US spending however, being independent of the exchange rate fluctuations, grew by 13 per cent. However, the average per purchase spend of US cardholders decreased in all sectors (except travel and duty free) as major hospitality and retail chains devised attractive deals/discounts to lure American customers to visit and spend in Dubai.

The steep decline in oil prices along-with the devaluation of the Russian rouble saw Russian spends drop to nearly half as much when compared to 2014. Chinese card spends also declined by 13 per cent in 2015 as compared to 2014. The one exception here is the United Kingdom where spends grew by 9 per cent in 2015 even though the pound (GBP) depreciated against the dirham (AED) in 2015.

France and Australia were displaced from their 9th and 10th ranking (respectively) in terms of highest spends by Nigeria and India in 2015.

UAE residents showed the highest increase in spending in the F&B and hotel sectors. They spent 23 per cent more in restaurants in 2015. Other GCC countries also contributed heavily to this industry with Qataris leading the way with a 50 per cent increase in F&B spends, followed by an equally impressive 48 per cent increase in spends by cards issued in Saudi Arabia. Lebanese cardholders remained the highest per purchase spender from 2014 in this category.

Growth in 2015 spends in the hospitality sector was driven by UAE staycationers (+10%) as well as visitors from Saudi Arabia (+ 12 per and the United Kingdom (+14 per cent). Data showed hotels witnessed a 4 per cent growth in spends in 2015 vs 2014, however the per purchase spend declined this year.

By Babu Das Augustine Banking Editor

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