Annual rents in Dubai are usually paid in two, four or six instalments via post-dated cheques
These findings were revealed in venture capital firm Millennial Capital's 'Mena Beauty Care Report'. The reasons cited are high spending per capita, affordable prices, strong consumer confidence, high literacy rates, young population with a high social media exposure and new entrants.
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.
While Saudi Arabia retains the highest market share of 33.2 per cent in the Mena, 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, 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.
"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," Kanchan Khemani, senior investment analyst at Millennial Capital, said.
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.
- business@khaleejtimes.com
Annual rents in Dubai are usually paid in two, four or six instalments via post-dated cheques
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