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Sales of beauty and personal care products in the Middle East and North Africa (MENA) region recently surpassed the $24 billion mark, with the United Arab Emirates (UAE) dominating in terms of per capita spending.
Over the past six years, the MENA region has been among the fastest-growing global markets, ranked second after Latin America, for beauty and personal care products. This growth is particularly evident in the UAE, where one in every ten consumers spends at least $16,000 a year on beauty products.
Among all products in the category, fragrances topped sales for beauty and personal care products in the MENA region, followed by hair products, which made up 17 percent of the total sales, while color cosmetics and skin care products are tied for third-largest product segment in the region. Forecasts call for continued growth in the sector, and annual sales are anticipated to surpass $30 billion within the next four years.
The major factors contributing to growth in the sector include strong tourism, high disposable income, a sophisticated retail landscape, growing youth population, and local consumers’ emphasis on personal grooming and attractiveness. An upward trend is noticeable in premium and niche products, as more and more consumers are becoming solution-oriented, i.e., preferring products designed to tackle specific problems and offering clear benefits (Euromonitor 2015). This can be attributed to UAE’s multicultural lifestyle and global brand exposure, which have led to an increasingly knowledgeable consumer population.
Cosmetics that are sold into the Gulf region are often customized to suit regional traditions and cultures. For example, makeup styles in the region often differ from the rest of the world. Luxury fashion houses such as Tom Ford, Hugo Boss and Versace offer customized, high-quality products in sync with local tastes. This strategy has proven especially successful in the fragrance market, with companies selling Oud (Arabian perfume) based fragrances (Euromonitor 2015). Furthermore, the demand for Halal cosmetic products is increasing. As a result, companies are investing to include Halal beauty and skin care products in their product portfolios to tap this opportunity.
Another significant trend in the UAE beauty industry is the rise of cosmetic surgery. The demand for non-invasive cosmetic procedures that slow down the signs of aging has increased dramatically in recent years.
Major opportunities in the market, however, lie within the retail industry, as retail sales are projected to grow tenfold. According to a report by CB Richard Ellis, Dubai currently ranks second to London as the city with the highest percentage of international retailers. The UAE is a prime location to launch new product lines and venture into untapped markets.