Industry News

UAE beauty and cosmetics market expected to reach over USD1 billion by 2017

UAE cosmetics market

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

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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. 


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.


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.


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