Deloitte report: UAE and Saudi Arabia see surge in generative AI adoption, social commerce booming.

Event Overview

On September 1, 2025, Deloitte released the "2025 Digital Consumer Trends Report," which surveyed 2,000 consumers aged 18-50 in the UAE and Saudi Arabia, revealing the rapid evolution of digital technology, media, and connectivity in the region. The report shows a significant rise in the use of generative AI tools, booming social commerce, the continued dominance of smartphones, and deepening consumer concerns about data privacy and subscription costs. This is Deloitte's latest consumer insight for the Middle East market, providing key data for understanding this high-growth digital market.

Market Context: The Accelerating Transformation of the Middle East Digital Economy

The UAE and Saudi Arabia are the two largest digital consumer markets in the Middle East. Both countries have invested heavily in infrastructure and digital transformation in recent years, with government-driven smart city initiatives and digital economy strategies significantly boosting technology adoption on the consumer side. According to the report, 58% of respondents have used generative AI tools such as ChatGPT or Google Gemini, a proportion far higher than in the UK and European markets. This also reflects Middle Eastern consumers' high acceptance of emerging technologies and their mobile-first lifestyle.

Smartphones remain the most central digital device in the region, with 96% of consumers using them daily. Notably, 89% of consumers plan to purchase new connected devices within the next 12 months, with smartphones, smartwatches, and laptops being the most popular product categories. However, the penetration rate of smart home devices remains lower than in Western markets, indicating that this area still has room for growth.

Platform and Brand Impact: AI and Social Commerce Reshaping Interactions

The report shows that generative AI is becoming mainstream. 55% of AI users use these tools weekly or daily, primarily for personal, educational, and professional purposes. However, 20% of respondents are still unfamiliar with AI technology, and data privacy is one of the key factors hindering frequent use, with a quarter of infrequent users citing it as their primary concern.

Social commerce has reached an unprecedented level of influence. 73% of respondents completed at least one transaction through social platforms in the past year, driven by influencer recommendations and affiliate links. Social media has surpassed traditional news channels to become the primary source of news for consumers (56%), while only 30% watch TV news and 22% visit news websites. This marks a fundamental shift in consumer information habits.

For platforms, this trend means that social commerce is no longer just a supplementary channel but a core shopping path. Platforms such as TikTok, Instagram, and Snapchat continue to strengthen their commercialization capabilities in the Middle East, and brands need to rethink how to build direct consumption loops within these ecosystems. At the same time, 48% of UAE consumers say they encounter misinformation more frequently than a year ago, requiring platforms to strengthen content moderation and trust mechanisms.

Consumer Trends Analysis: Subscription Pressure and Trust Challenges## Consumer Trends Analysis: Subscription Pressure and Trust Challenges

In digital subscriptions, more than half of consumers in the UAE and Saudi Arabia have subscribed to video streaming services in the past year, but rising prices are driving cancellations. 21% of respondents canceled subscriptions due to underuse, and 20% left because of cost. Additionally, 47% of consumers have been affected by streaming platforms' crackdowns on account sharing. This shows that despite strong demand for digital content consumption, consumer price sensitivity is also increasing, and subscription models need to become more flexible and differentiated.

The proliferation of AI is changing consumer search and shopping behavior. Generative AI tools help users obtain product information more efficiently, compare prices, and make purchasing decisions, which has a profound impact on traffic distribution for traditional search engines and e-commerce platforms. Brands need to optimize their visibility in AI-assisted search and leverage AI to deliver personalized experiences.

Regional Market Impact: The Middle East Becomes a Key Growth Engine for Global E-commerce

The leading position of the UAE and Saudi Arabia in digital consumption is having a ripple effect across the entire Middle East and North Africa region. Their high income levels and internet penetration rates make them gateway markets for cross-border brands and e-commerce platforms entering the Middle East. The report notes that the high adoption rates of AI and connected devices in the UAE and Saudi Arabia demonstrate the maturity of the region's tech-savvy consumer base and reflect the results of government investment in digital infrastructure.

Meanwhile, emerging markets such as Egypt, Qatar, and Kuwait are replicating similar development paths. Social commerce, live-stream shopping, and AI-driven retail technology in the Middle East are attracting the attention of global investors. For global e-commerce platforms, the Middle East market is no longer just part of the oil economy; it has become a testing ground for digital retail innovation.

Future Trends: AI-Driven Retail, the Trust Economy, and Hybrid Shopping Experiences

Based on the report data, the following trends can be expected to profoundly impact global digital retail in the coming years:

• Generative AI reshaping the shopping journey: AI tools will evolve from assisting decisions to actively recommending, and even generating personalized product descriptions and marketing content. Brands need to build AI-friendly digital assets to ensure they are effectively discovered within the AI ecosystem.

• Social commerce becoming a mainstream channel: In the Middle East, social platforms are not only marketing arenas but also places of transaction. In the future, more brands will deeply embed product catalogs, payments, and fulfillment capabilities into social platforms to achieve a closed loop from content to purchase.

• Data privacy becoming a competitive advantage: As AI and social platforms increasingly rely on user data, data privacy protection will become key to brand trust. Companies that can offer transparent data policies will earn consumer loyalty.

• Subscription models entering a phase of refined operations: Streaming and digital service providers must reduce churn through differentiated content, tiered pricing, and flexible subscription options, while also addressing user backlash from platform crackdowns on account sharing.- Smart home market potential unleashed: Although adoption rates are currently lower than in the West, 89% of consumers plan to purchase new connected devices. As the next growth area, smart homes will drive new demand for IoT and retail technology.

Emmanuel Durou, Deloitte Middle East TMT Industry Leader, said: "The UAE and Saudi Arabia are at the forefront of digital transformation, with consumers embracing AI, mobile-first lifestyles, and social commerce at an astonishing pace. These trends not only reflect the region's highly digitally literate population, but also demonstrate substantial investment in infrastructure and digital transformation. Companies need to rethink their engagement strategies and strike a balance between innovation and trust to meet the expectations of today's digital consumers."

For global retailers, cross-border brands, and e-commerce platforms, the Middle East market is presenting a clear picture of the future: AI-driven personalization, the integration of social commerce, and higher demands for privacy and authenticity. Players that can quickly adapt to these changes will have the opportunity to achieve long-term growth in this dynamic market.