The beauty and personal care industry in the MENA region, valued at $15.9 billion, is set to grow twice as faster than the rest of the world with a compound annual growth rate (CAGR) of 8.5 per cent in the next three years, a report said.
Meanwhile the global industry, which is worth $444 billion, is estimated to grow at 4.2 per cent per annum, added the latest MENA Beauty Care Report from Dubai-based Millennial Capital, an emerging venture capital firm specialising in developing partnerships with global brands in the consumer, retail and wellness sector which target to enter or operate in the GCC market..
The report cited reasons of high spending per capita, affordable prices, strong consumer confidence, high literacy rates, young population with a high social media exposure and on top of that new entrants with the aim to fill the gap in the “masstige category”.
Among the key categories that contribute most of the beauty and personal care market size are skincare, haircare, colour cosmetics, fragrances and men’s grooming. Globally, the Skincare category dominates the market and as a brand, L’Oréal Group captures the largest market share. Contrary to global trends, fragrances is the most loved category in the Mena region. The same is evident from the fact that two local brands, Arabian Oud and Al Qurashi, control over 20 per cent of the market share due to their appeal to the local masses and cultural significance.
While Saudi Arabia retains the highest market share of 33.2 per cent in the MENA region, the UAE stands higher in terms of spending per capita at $239. Despite the fact that UAE constitutes only 2 per cent of the Mena population, the high spending per capita is a result of the strong consumer confidence, high literacy rates and predominantly young population with a high social media exposure.
There is great opportunity for new players with the right value proposition to step in and gain market share weighing on the gradually shifting consumer focus to quality products that not just pamper and protect, but also pay attention to cleaner and more organic ingredients, along with personalised offerings so that wider audiences can love and appreciate them just as much, according to the report.
All of this, with an affordable price point has enabled new entrants like O Boticário, KIKO Milano and Benefit Cosmetics to lure the millennial consumer away from luxury tags, it added.
“In the age of beauty ‘retailment’ with consumer preferences shifting from being product-based to experience-based, by having alchemy and innovation in its DNA, brands such as O Boticário bring to Dubai an unprecedented emphasis on quality and retail innovation, offering customers an experience complete with interactive shopping content, products that narrate stories combined with the latest retail technologies, such as the LED screens inside the store which enable customers to get to know the stories behind the products when they lift the product from its display,” said Andreea Danila, founder & managing director at Millennial Capital Ltd.
Millennial Capital joined hands with Brazil’s O Boticário Group to introduce the largest cosmetics franchised network in UAE with the opening of two flagship stores in Dubai Mall and Mirdif City Center. The brand received an overwhelming response since the opening of the store in Dubai and its preparing for Saudi Arabia regional market expansion.
“With 33 per cent of global consumers citing brand sustainability as a key deciding factor in their product choices according to Unilever, there is an untapped potential of $1.1 billion for cleaner and sustainable brands in the market,” said Kanchan Khemani, senior investment analyst at Millennial Capital.
“O Boticário has been a pioneer in the research on alternative methods of product testing such as 3D skin instead of animal testing. The brand invests 1 per cent of revenues in forest conservation, and have reduced their electricity consumption by 70 per cent, leading to a saving of 3,000 tonnes of CO2 annually.”
Internet penetration in the Middle East has outpaced the world average of 51.7 per cent, with the largest markets boasting over 90 per cent penetration; thereby having a tremendous influence on consumers aged 18-24. Being avid smartphone users, today’s millennial is more comfortable going to the e-tailer citing lower prices, personalised offerings, and flexible payment methods as factors driving their preference.
Despite the high Middle East social media usage at 38 per cent of total population and average internet penetration of 60 per cent, only 15 per cent of retailers in the Middle East maintain an online presence, hence losing out on the 56 per cent shoppers who purchase products online through their smartphones.
It is interesting to note that health and beauty sales contribute 48 per cent of the Middle East’s online sales, the report said.
PricewaterhouseCoopers (PwC), a multinational professional services network headquartered in London, United Kingdom, surveyed major world cities and produced Another Ranking of Top World Cities that are generally metropolises of developed countries. The report was published on September 7th, 2016; we reproduce excerpts of it below.
London claims pole position for the second time in a row in a comprehensive benchmarking study of 30 leading business centres globally, boding well for its ability to withstand post–Brexit competition on a number of fronts. (more…)
The Middle East generally and the GCC in particular have diverse populations of nationals and residents with ratios spanning from 11% of Nationals for the UAE to Saudi Arabia’s 68%. All these populations totalling about 50 million, or a good percent of them use cars for business and / or leisure and a plethora of makes and models is offered in response by the world’s automotive industry. Mideast vehicle sales would according to the following article of TradeArabia be bound to reach in the near future heights unknown before. Meanwhile, Best Selling Cars blog could shed some light on the range of preferences for each country.
Total light Mideast vehicle sales in the region is likely to reach 4.4 million by 2020 as compared to the 2015 total of 3.2 million, said the organisers of an upcoming automotive aftermarket exhibition in Dubai, UAE, citing a report.
At the same time, the number of vehicles in operation on the region’s roads will rise from 34.8 million in 2015 to 44.5 million in 2020, according to an analysis from Frost & Sullivan, a growth partnership company.
This burgeoning growth is expected to drive up demand for parts and accessories, for which sales in 2020 is expected to reach $17.2 billion as compared to the 2015 total of $12.98 billion. This represents a projected pan-regional CAGR of 5.9 per cent.
The event will offer a platform business deal making and networking as well as a series of product launches.
The 14th edition of the trade and networking mega event that draws in the who’s who of the automotive industry from around the wider region and its hinterland, featured as many as 2,017 exhibitors from 58 countries, and attracted 30,018 visitors from 119 countries.
The robust participation by the international trade underlines the continued high interest in the region from global automotive players, who see the region as a key driver in their future business plans.
Targeting the fast-growing regional markets were a majority of the world’s leading brands who showcased their innovative automotive technologies across six product groups of Parts & Components; Electronics & Systems; Repair & Maintenance; Tyres & Batteries; Accessories & Tuning; and Service Station & Car Wash.
“The Middle East is now one of the world’s most significant automotive markets, thanks to higher income levels and a penchant for quality automobiles,” said Ahmed Pauwels, CEO of Messe Frankfurt Middle East.
“The advantages of maintaining a base in the region give companies the ability to better access and meet the needs of their regional customers.”
As the automotive aftermarket in the Middle East and Africa continues to post impressive growth rates, international auto aftermarket players are keen to be a part of this growth by increasing their footprint across the region.
A considerable number of leading aftermarket brands are either in the process of establishing their presence in the region or are considering doing so, thanks to the extremely positive business prospects emanating from the region, the organisers said.
In 2016 Global Internet advertising revenue will surpass TV advertising predicted PwC last year, saying : “While total Internet Advertising revenue will surge at an 11.1% CAGR to reach US$260.4bn by 2020, the full potential of the sector will remain unfulfilled, as consumers turn to ad-blocking to overcome their frustrations over ads’ impacts on their loading times and data consumption.” The MENA region knows the same trends in Online Advertising and the GCC having perhaps steeper growth than elsewhere. Numerous recent studies reflected that and one of the best account was that of TradeArabia quoted here below.
GCC online ad spend set to top global average
DUBAI, June 28th, 2016
Internet advertising spend in the GCC is poised to grow faster than the world average in the next five years and is set to register a growth of 25 per cent this year, according to a new market research report.
Increased Internet penetration in the Arab World has led to a jump in the GCC region’s online ad spending for this year with Internet ads in the GCC set to grow 20 per cent in 2017, explained the report entitled ‘GCC Online Advertising Market,’ released by Orient Planet Research, an Orient Planet Group venture.
According to the study, which outlines key trends in online advertising and e-commerce within the Arab region, Internet advertising expenditure is forecasted to grow globally at a compound annual growth rate (CAGR) of 11.9 per cent till 2020.
Global ad spending in 2015 alone has been recorded at $531 billion, with online ads making up 27 per cent of the total amount. Internet users in the Arab world are expected to reach 197 million by 2017 – this exponential growth complements the study which shows that Internet advertising expenditure is expected to grow globally at the fastest rate of any medium.
The advertising situation is however made difficult by this semi unanimous social anti Ad movement as best explained by the Arabian Marketeer quoted here below.
The ad blocking debate moved on from platforms embracing and enabling it to platforms fighting against it. Some of the most renowned websites including the likes of The Telegraph, Forbes and Wired do not allow users to browse further until the ad blocker is disabled or a fee is paid. The discussion is also branching to how ad blocking is growing on mobile platforms. As per a recently released PageFair report, as of March 2016, 419 million people, or 22 percent of the world’s 1.9 billion smartphone users, are blocking ads on the mobile web. Even though ad blocking has not reached apps just yet, the figure is troubling because it was previously reported that mobile ad blocking use was much lower.
Read more on the original document posted by the Arabian Marketer, posted on June 1, 2016 in Advertising, Digital.