The cosmetics or beauty products industry in the world is one sector which remains impervious to the ups and downs markets. Overall sales are indeed affected in the event of an economic downturn, but one can count on sales of cosmetics to maintain a certain volume overall. This is because of continuing and growing usage of products by women, and increasingly, by men, across the world.
UAE is a country with high GDP per capita (US$ 40,444 as of 2012), and an administration which is modern, yet has further growth to witness with regards to women at the workplace. Increasingly, as more women join the workplace, the need to look good, as well as purchase cosmetics has become important, and not just based on one’s preference. Furthermore, an increased influx of tourists has boosted the sales of cosmetics. The country is going through a period of urbanization as well as a gender call to workforce, where a large number of women are joining the workforce and have disposable income to themselves, ready to spend on aspirational needs like beauty and personal appearance. The UAE cosmetics market, worth US$ X.X bn as of 2014, is projected to grow at CAGR X.XX% to US$ X.X bn by 2020.
The predominant trends for cosmetics include lasting power and new colour palettes, increasing market share for ethnic products, and an increased preference for vegan, organic and natural beauty products, enhanced through usage of other ingredients, to mitigate harmful effects of pollution, sun, dust, especially in the high temperature and dry environs in UAE, and harmful ingredients typically a part of cosmetic products. A trend which has been witnessed is the demand for specialized care products, which are made affordable because of high disposable income.
Distribution is pervasive through exclusive stores of luxury products in malls, stores or through direct selling channels. Ecommerce is emerging as a competitor to direct sales for all mass and premium brands. Customers are increasingly looking for value for money products offering a makeup look and a range of other benefits like anti-ageing, fresh-looking, anti-pimples/sebum controlling, moisturizing, etc. and also contain the increasingly popular ingredient kind – natural ingredients. It is because of this, that products like BB, CC, DD and EE creams have increased in popularity.
The most important trend in cosmetics in UAE is that of Halal cosmetics. Because of religious restrictions on the use of some products, Halal, or alternatively, vegan or organic products made from pure and natural ingredients is gaining market traction.
Famous brands include Estee Lauder (with X.X% of the market), which has been capturing market share because of the specific solutions offered, and high disposable income. Other international companies have captured large swathes of the market share in cosmetics in UAE.
Increasing urbanization, more women at the workplace, increase of disposable income, increased inclination for better appearance, growing market are some of the drivers of this market.
Market restricted by Halal regulations, cultural and religious perceptions preventing women from using makeup, or letting them use it only to a certain level which is not interpreted as ostentatious, lack of a high proliferation of mass market brands are some of the challenges of this market.
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