The prestige beauty market in the United Arab Emirates (UAE) has stumbled over the past year, largely due to a decline in tourism, which the country had built much of its economy on, as well as a strong currency against the Euro. With Russian tourists curbing their travels, Chinese tourists spending less (due to currency issues, which have made products expensive) and visitors from Saudi Arabia cutting back on visits to the Emirates, the prestige beauty market has taken a severe hit in recent months, and there is little visibility on how the market will pan out in the year ahead.
Growth of the prestige market in the UAE is under debate, with industry sources estimating a 7.5 percent uptick last year, while Euromonitor International puts the premium market’s growth at 4.8 percent.
For 2016, however, growth is expected to slow to just 2.5 percent, largely due to the drop in tourism and the strong dirham. “This year [our business] is negative, and I think the whole market is negative,” commented Sisley Regional Director for the Middle East and Africa, Sébastien Gautier. “In terms of ranking, we are still number five, but since we are negative, that means everyone is negative.”
Growth rates for the year are expected to vary by category. On the upside, make-up continues to grow strongly, with a 12 percent increase in the forecast, as consumers continue to buy into professional brands and new products arrive on the market. The color cosmetics category is now said to represent around 35 percent of the beauty market in the Middle East. As in other markets, the trend for social media and selfies is driving the category.
To read BW Confidential’s full report on the beauty market in the UAE click here.