Brand cosmetic sales set to rise in Middle East

Beauty sales to increase on returning consumer spend, Saudi seen as largest market
Brand cosmetic sales set to rise in Middle East
Saudi Arabia is home to the Middle East’s biggest beauty market, worth an estimated $2.7bn in 2010
By Elizabeth Broomhall
Sun 05 Jun 2011 08:49 AM

Sales of premium cosmetics in the Middle East are forecast
to rise by five percent in 2011, aided by a return in consumer spending and a
new focus on male grooming.

Lip products, cosmetics and branded perfumes will top the
leader board in a region where beauty spend per capita among women ranks among
the highest in the world, analysts said.

“The thing about this region and the GCC particularly is
that disposable income is high,” said Sana Toukan, analyst with consultancy
Euromonitor International.

“It’s a mall culture, a consumerist culture, that’s what
people do in their free time – they go to the malls. There is also an emphasis
on beauty in the Middle East… so the premium cosmetics market will always be
growing.”

The cosmetic industry has long been seen as
recession-resilient, offering affordable indulgences in difficult times. An
executive at Estée Lauder in 2001 dubbed the trend the Lipstick Index, an
alternative economic indicator which tracks the rise of make-up sales in a
downturn.

Saudi Arabia, the wealthiest Gulf state, is home to the
Middle East’s biggest beauty market, worth an estimated $2.7bn in 2010. In the
UAE, sales of cosmetics and personal care products hit $913m during the same
period, while Egypt – the Arab world’s most populous country – saw sales of
$819m.

“Women will always feel the need to look good,” said Michael
Dehn of cosmetics exhibition Beautyworld
Middle East. “In a downturn,
sales tend to fall less, and sometimes there is growth. In an upturn, there are
strong to moderate increases.”

According to Dehn, three of the top 10 exports from the UAE
to Saudi Arabia in 2010 were related to grooming.

Another driver behind sales is the region’s burgeoning male
grooming market, spanning products from skincare to hair, to shaving ranges.
Male grooming sales are set to rise by 6.4 percent in 2011 in Saudi Arabia,
growing faster than the female market, according to Euromonitor.

Among retailers, the consensus is the cosmetics market is
set for steady growth. Faces, the UAE-based beauty retailer owned by Chaloub
Group, saw a six percent year-on-year increase in sales of premium cosmetics in
2010 and a steady growth of 0.2 percent during the financial crisis.

Particularly good results were seen among brands selling the
‘three axis’ of beauty – fragrances, cosmetics and skincare - such as Chanel,
Dior, Lancome, and Givenchy.

“For 2011, we are forecasting an increase of around two
percent growth in the premium cosmetics segment,” Salah al Sagha, general
manager of beauty retail at the Chalhoub Group told Arabian Business. “Saudi
Arabia is definitely the largest market in the region, and the leader in
cosmetics sales.”

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