Throughout the Middle East, the market for cosmetics and beauty products has been growing steadily for the past years. This growth was mainly driven by different market segments. For example, the younger shoppers are keen to experiment and try new products, while older consumers have contributed to a growing demand for anti-aging and anti-wrinkle products.
Demand for cosmetics and beauty products are also being driven by men. Whilst women will continue to be the largest customer group, Arab men are becoming more aware of their appearance. They are looking for products specifically designed for them.
This coupled with a growing digital awareness of the importance of looking good has led to increasing per capita expenditure, along with a rise in disposable income which further supported this market growth.
As for the United Arab Emirates (UAE), the cosmetics market is set for unprecedented growth, with the sector projected to exceed USD 3 billion by 2025.
Who are the key market players and their focus areas?
Luxury international brands remain the major players in the market across the entire region. In the UAE, leading brands are L’Oreal, Shiseido, Unilever, Estee Lauder, Procter & Gamble, Coty, Chanel, and Dior, among others.
Those companies at the top of the market continuously invest in research and development activities to offer more personalized product options. Focus areas of development include:
- Meeting the growing demand for vegan, natural, and halal cosmetics
- Enhancing, personalizing, and customizing existing lines to skin type and customer age
- Diversifying ranges to include seasonal products to increase customer base and grow market share
What are shoppers buying?
Fragrances have traditionally been more popular than other cosmetics products sold across the region. This trend continues for both men and women. To better serve the market, international perfume houses have more recently started adding oriental notes to their perfumes. At the same time, manufacturers are introducing contemporary scents, although traditional, natural products remain firm favorites.
Fragrances are followed by bath and shower products as the most popular product segment. Part of this is due to standard, regular usage, coupled with the growing awareness of the importance of hygiene. Within the segment, premium products are seeing the largest growth.
Additionally, there is a growing demand for specialist cosmetics like organic, vegan and halal products. Analysts have noted that historically manufacturers did not distinguish between halal and organic cosmetics. However, driven by a better understanding of market needs, more brands are offering diverse lines that address separate customer needs.
Premium products have long been a favorite of shoppers in the region, but there is now a growing demand for more natural cosmetics. As a result, products that can substantiate claims to be silicone-free, sulfate-free, and paraben-free are in a good position for growth.
Where are shoppers buying?
Increasing trend of online purchases
Mall shopping remains highly popular throughout the region. Supermarkets and hypermarkets are the preferred places for the purchase of cosmetics and beauty products. Retail stores, specialized shops, and beauty parlors had to fall in line behind their larger competitors.
However, the coronavirus changed the playing field. Whilst online retail was a minor distribution channel in 2019, shoppers preferred it in 2020. Mall closures were the obvious reason for this development as well as a desire for safety and protection from the virus. As Covid-19 continues to make headlines, online shopping for cosmetics is likely to remain popular and continue to grow in market share.
Apart from added safety, consumers also enjoy the convenience of online shopping. In the UAE, eCommerce is growing in popularity outside of the beauty sector, too, as residents continue to juggle their busy lifestyles.
Experience Matters Instore
Instore shopping may not be able to compete with online beauty stores in terms of choice and convenience, but Middle East customers continue to seek out high-end malls and specialist stores for expert guidance and recommendations.
Retailers worldwide are looking to transform in-store shopping into a customer experience. Middle East region is no exception in this respect. The transformation includes higher-end interiors, inviting customers to spend time and browse.
It also includes a more personalized service. In order to continue attracting shoppers into stores, brands have started offering facial scanning and analysis.
Where Is the Market Heading?
The cosmetics industry in the Middle East is set for record growth over the coming years.
At the same time, the sector is transitioning from predominantly in-store shopping to online purchases. Premium international brands remain consumer favorites, especially as their product lines are starting to offer more regionalized and personalized items.
The growth in the cosmetics market will likely come from the continued demand for premium products in the region. The combination of a large population and a high disposable income is driving this development.
As halal products are likely to grow in popularity, too, the industry across the region needs to consider how to handle certification and ensure integrity.
Where cosmetics marketing is concerned, social media outlets are set to grow in importance. Using influencers to deliver brand messages to loyal followers is a promising strategy for the leading players in the market.
Ollen Group consumer packaged goods consulting services, which include a dedicated beauty & cosmetics consulting practice offer turnkey solutions from strategy to execution, as well as design and supervision.
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