Beauty Products Market
According to new research, the Middle East is has recently overtaken South America as the world’s fastest growing beauty products market in the world. The beauty products market is a real growth driver in the region, mostly because the local population typically wears traditional clothes, enabling them to pay more attention and spend more on makeup and perfumes in order to differentiate themselves.
According to Euromonitor International, the retail value for the Middle East’s beauty products in 2014 was US$25.7 billion. This number is only expected to rise, as its estimated 4.8% annual growth rate between 2014-2019 is almost double the global 2.6% average. Saudi Arabia, Iran, and the United Arab Emirates are the top three countries in the Middle East and Africa region, holding a 37% share of the 2014 beauty products retail sales.
Saudi Arabia’s beauty products market is the largest in the Middle East. Recent studies show that consumers in Saudi Arabia spent US$4.8 billion on beauty products. They join the other big spenders in Iran (US$3.5 billion), the United Arab Emirates (US1.4 billion), and Egypt (US1 billion). The Saudi cosmetics market is particularly thriving, with a forecast of 11% annual growth rate, according to Euromonitor International statistics.
The rising young, dynamic population in the Middle East is driving many of the beauty trends in the region. The internet and social media have increased awareness of global brands in the Middle East and have been important tools for learning about purchasing and using beauty products. The diversity of wealth of Middle Eastern states creates discrepancies in the market. Where some countries enjoy more premium products; others look for value-added, multi-functional products. For example, customers in the United Arab Emirates and Saudi Arabia are looking for products with specific benefits. Skincare products offering anti-aging benefits, oral care with whitening effects, and salon-inspired hair care is on the rise. However, in countries—such as Egypt, where the majority of the population originates from low-income households, spending money on non-essential items is limited.
Most opportunities for growth in the Middle East lie in the more developed countries, where the population has a more disposable income and consists of a younger demographic, interested in trendy new products. An increase in marketing and the expansion of distribution channels has created a strong demand for products that were previously unused. For example, men’s grooming products experienced 13% growth in 2014 in Saudi Arabia. Men’s grooming was once considered “taboo” to many Middle Eastern States, but strong marketing helped men break through the social stigma and take pride in their appearance. Similarly, Iran women are spending increasing amounts on color cosmetics. Because of the hijab law and traditional garb, the face is extremely important. Therefore, Iran offers growth opportunities in color cosmetics.
Halal beauty products have recently been introduced globally in its very early stages of growth. Although certification for halal products is inconsistent in most countries, there is great potential to develop as a key point of distinction for brands internationally. Because of the inconsistencies in certification, Muslims often prefer organic or vegan products that do not use animal derivatives. Increasing the availability and gaining the trust of consumers through proper labeling of halal products can ensure that Muslim consumers are buying products that adhere to the standards based on Islamic values.
Multinational companies dominate the Middle East’s competitive landscape. Procter & Gamble and Unilever are the leading companies in the United Arab Emirates and the key players in Saudi Arabia and Israel remained multinationals in 2014. However, in Iran, local companies dominate. Domestic suppliers like Paxan Co. and Pakshoo Co. are more active in basic, essential products; therefore, they are cheaper than multinational brands, appealing to the population.
Socioeconomic factors and the increasing young consumer base in the Middle East offers much potential for growth in the forecast. Because the region is so diverse, focused strategies are needed when producing and marketing beauty products.
