The end of a cycle
The beauty industry in the Middle East is undergoing huge changes: the end of a cycle of domination by international brands, now challenged by emerging independent players. These companies, refocusing on traditional and cultural values, are adapting to new consumers: an ultra-connected and demanding young consumer groups. A public looking for a personalized, targeted and sophisticated offer. Very active on social networks where some real experts have emerged, this age group takes advice from beautystas, who enjoy strong media clout, like the female blogger Huda Katan, now at the head the makeup brand Huda Beauty. This new landscape benefits to independent local players, digitally very present, (e-commerce platforms, social networks) who are able to meet these expectations combining tradition, innovation and personalization.
"Digital and e-commerce have thoroughly modified the beauty world of GCC. [..] New local beauty players have understood the essence of needs of Gulf customers and are challenging traditional businesses. By shaking up the industry, forcing it to think outside the box and be more consumer-centric, they have a significant and very positive impact. The Chalhoub Group is opening to these independent beauty brands which the region needs and welcomes them. We are very proud to have contributed to their international expansion and to see them succeed today," said Anthony Chalhoub, co-CEO of Chalhoub Group.
To adapt to this new landscape, the Chalhoub Group recommends several strategies. Design personalized products, develop digital strategies, renew the authentic link with this new generation through a unique shopping experience and enrich the online offering. But also support these new local players, mostly present on the web, by offering them visibility in brick and mortar shops.
A key evolution, considering that the beauty market in Gulf countries has dropped by 5%, with sales totaling USD 1.9 billion in 2016 against 1.8 bn last year. In a difficult macroeconomic context, international groups have reduced their marketing budgets. Institutional brands are struggling to adapt, thus contributing to the success of local small-scale designers who fully embrace the needs of a new generation looking for a customer centric offer, via digital and social networks.
Hence the Chalhoub Group is seeking to revisit shopping experiences with new retail concepts and own brands. An all the more relevant bias in these Gulf countries where beauty rituals, like perfuming but also making-up, punctuate every moment of life. In a context where women are veiled, it is essential in particular, to design a wide range of eye makeup products (eye shadows, kohl, mascaras, false eyelashes, pencils, gels, brow powders...). Between tradition and modernity, local brands are developing ancestral rituals (perfumes built around oud and incense, kohl for the eyes) to adapt them to the current needs of modern and connected young people.
"GCC consumers have evolved. They have now become more assertive, curious, determined, and particularly influenced by their relatives and friends on social networks. In terms of beauty, they focus on makeup and look for originality, fun and color. [...] An increasing number of local entrepreneurs are undertaking relevant initiatives for their own community. They are changing the beauty scene of GCC and creating a new momentum. They are challenging established players and forcing them to rethink their strategy," added Patrick Chalhoub, co-CEO of Chalhoub Group.
In a region where makeup and olfactory rituals have always been closely linked to women’s culture, the Chalhoub Group supports many cosmetic niche brands to better identify, renew and welcome today’s beauty.