The UAE beauty and cosmetics
market is expected to increase due to high demand of personal grooming
products. Consumer spending on the cosmetics product is driven by factor such
as high consumerism, high disposable income and strong social pressure on
wellness. Some of the other factors propelling the market is strong shopping
culture, exposure to western life style, increasing expat population and high
penetration of international brands.
Nailcare is one the fastest
growing segment in consumer cosmetic retail category in the UAE and the growing
market offers promising opportunity for the international players in North
America and Europe. Cosmetics industry in UAE has seen many foreign entrants in
the market in last two decades. Expanding organized retail is also creating demand
for high quality imported products. Germany, France, United Kingdom and United
States are the largest suppliers of cosmetics product followed by India, China,
Turkey, Thailand and Eastern European Countries in the current years.
Figure 1:
UAE Per-Capita Household Final Consumption Expenditure, 2012-2016 (USD)
Source:
World Bank
Market Outlook
Beauty and personal care
industry in UAE comprises of cosmetics, hair care, fragrances and nail care
products. The increasing demand of such products can be attributed to various
factors such as harsh climate conditions, changing population dynamics, growing
income class and high spending on luxury beauty products. Growing urbanization,
increasing young and large fashion-conscious population, increasing population
coupled growth in number of spas is anticipated to propel the growth in the
market.
Figure 2:
Number of international tourists arrival in the United Arab Emirates (In
Millions) 2010 - 2015
Source:
TechSci Research
Download Sample Report: https://www.techsciresearch.com/sample-report.aspx?cid=1406
Regulation
Imported cosmetics product in UAE have to follow
regulation, which is imposed by the Emirates Authority for Standardization and
Metrology. According to definition inscribed in regulation for cosmetics
product is a substance or preparation that is meant to be placed in contact
with external part of human body. Any product that is intended to clean, keep
in good condition, protect, correct body odor, change one appearance is
considered a cosmetic product.
Drivers
Availability Affordable Products
Cosmetics market in the
country is witnessing an increase in the accessibility of small and handy
cosmetic products. Increasing desire among women to look fresh and alluring
throughout the day is propelling the companies to introduce pocket friendly
sizes of their products in the market, which can be easily carried everywhere.
The cosmetic manufacturing companies are reaping the early mover advantage in
the market.
Currently, the UAE cosmetics market is flourished with
products in small packs or sachets. Launch of such products are gaining
prominence everywhere in the country and thereby, generating huge demand for
small size cosmetic products
Inclining demand from the youth of the country
Young women and men of the
country are actively participating in lashing out extra money on the cosmetics
that help them in improving the physical well-being. Moreover, new products in
the cosmetics market and their innovative placements in the minds of the women
are luring them to incur extra expenses on improving their overall wellbeing.
Surging Availability of Cosmetics Through Online
Channels
Growth in e-commerce market in UAE can be attributed
to high internet penetration rate and growing smartphones users in the country.
Consumers in the country are preferring online channels to make purchases due
to availability of a wide range of discounts and keeping in mind various
restrictions imposed on women. Increasing number of internet users coupled with
growing penetration of smartphone users in the country is encouraging cosmetics
companies to offer products through online retail channels in UAE in order to
augment sales and revenues.
Challenges
Lack of Domestic
Production
Majority of the demand for cosmetics in UAE is addressed
through imports from countries such as the UAE, Eqypt, Germany, France, USA,
Italy etc. Consequently, imposition of
import duties and other taxes on these imported cosmetics raises the prices of
these cosmetics. Before these imported products reach the end customers, custom
duties, tariffs and freight charges are added to the cost and this
significantly increases the overall cost of the product.