TLDR;
- High disposable income, expat population, tourism , proportion of youth population and consumer awareness around natural ingredients is driving growth of cosmetics market in middle east
- Substantial and increasing demand for organic and halal cosmetics
- Social media continues to play an influential with content shifting towards video-based formats like vlogs and tutorials
- Women in UAE spend around USD 300 per year on cosmetics leading to the women organic skincare market at an estimated USD 10.6 million growing at a CAGR of 7%
- While COVID-19 caused a slump of around 5–10% in the cosmetics market in the middle east, it is now on the road to recovery with skincare segment leading the charge
- The pandemic also led to increase in online adoption and shifting the focus on skincare and sanitary products as compared to makeup and fragrances
- Adoption of vegan and organic cosmetics is on the rise owing to shifting consumer preferences and increased awareness around natural ingredients, environmental movement on digital platforms, mental health and wellbeing awareness, curated skincare routines and multiculturalism
Market Overview
The middle east is a booming market for cosmetics owing to a multitude of factors such as high disposable income, expat population, tourism and proportion of youth population. The UAE is one of the largest cosmetic products market in the Middle East not only owing to huge population and tourism, but also to its approach to becoming a local hub for the beauty and skincare industry.
There has been an increasing emphasis on beauty and skincare among residents in the middle east, especially UAE, which has resulted in increasing per capita expenditure on cosmetic products. As consumers are spending considerably more, there is substantial demand for different cosmetics, such as organic and halal. The organic and halal beauty segments have grown significantly in the past few years. Earlier, there was not much of a distinction between the halal beauty and organic skincare segments, but many international brands have now researched the needs of consumers and have launched product lines that seek to cater to the demand in both segments. Although, maintaining the integrity and authenticity of halal and organic cosmetic products in a competitive environment is a challenge.
In terms of marketing and content consumption, social media continues to become ever more influential, with a growing number of players using blogs, tutorials, and grassroots marketing to promote their brands. Consumers are increasingly purchasing products after viewing information on social media websites and blogs and are thus, more informed about the products than pre-digital era. This has led brands to talk about their products in terms of their ingredients and benefits that go beyond just the appearance. The cosmetics market in the middle east is showing strong signs of growth after a dip in demand due to the pandemic.
Growth Drivers
Market Size
Middle East has emerged as an exceptionally attractive market for cosmetic companies to introduce their new products as it is one of the largest beauty markets in the world and is endorsed by affluent clientele.
The demographic variety of consumers that are spread within the middle east translates into a diverse market that allows companies to offer variety of product across varied price spectrum.
Women in the UAE spend about USD 300 per capita on cosmetics and personal care each year.
Impact of COVID-19
Opportunity Areas
Vegan and Organic Cosmetics
Vegan Beauty Product Categories
Vegan products are dominated by the skin care category contributing to 33% of the market share in 2018.
Buyer Persona and Go-to-market Strategy
Survey of Saudi Women
Buyer Persona for Organic Skincare
Target Population and Distribution Channels
Competition and Major Players
- Major international brands have started shifting their focus on quality and brand positioning in line with the environmental movement
- Companies are heavily investing in R&D and setting up omni-channel distribution networks
- Vegan cosmetics market is competitive and largely fragmented which has allowed new players to enter this space and capture substantial market share
Vegan Beauty Products Competition Landscape
Companies highlighted with the red box are present in the middle east.
The major international players have a strong focus on quality and this attribute plays a pivotal role in brand positioning. Tier 1 brands have a global presence with a larger product portfolio.
Companies are increasing their investments in R&D and marketing and expanding their distribution channels to maintain their positions in the market and offer innovative offerings across the world.
Vegan cosmetics market is competitive and largely fragmented which has allowed new players to enter this space.
Within tier 1 players, Loreal is a leading player in the beauty and personal care products, but Boticario has a greater prominence and share in the vegan products category both globally and in the middle east market.
Huda Beauty, a tier 2 brand launched in 2013, has a larger market share than Loreal by focusing in the niche of vegan product category and targeting specific markets at reasonable prices.
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