NEWS > 18 July 2023

New beauty markets: opportunities and challenges in the Middle east and Africa

The global cosmetic industry is worth 427 billion USD, as confirmed by the 2023-2027 beauty report released by the market research agency McKinsey & Company. The value is destined to increase by 6% per year, reaching 580 billion USD in 2027. China remains the market refence, even if the average annual growth over the next five years will stabilize at 8%, instead of 12% in the period 2015-2019. The United States will register a CAGR of almost 6%, similarly to the Asia-Pacific region. Europe is more stable, which is expected to have a annoual growth of around 5%.

Up to now for beauty brands, the greatest growth opportunities are hidden in emerging or still underexploited markets, which are characterized by a strong demographic push, growing urbanization and an average increase in purchasing power.

One of the most promising regions for beauty experts is the Middle East and Africa area. According to the international agency specialized in market analysis EUROMONITOR INTERNATIONAL, the market today is worth more than 40 billion USD overall and will reach an average annual growth of 12% by 2027. The driving sectors are hair care, fragrances and skin care products.

NEW OPPORTUNITIES IN THE MIDDLE EAST

The Middle East is witnessing significant expansion due to the growing purchasing power of local consumers. Fuelled by digitalisation, the region, especially the Gulf countries, offer ample opportunities for growth, owing in large part to untapped per-capital potential. Rising disposable incomes and overall rising wealth, particularly among the rising younger urban middle class, also bring opportunities for value-added beauty products that emphasize health and well-being. A Cosmotalk session titled "Health & Beauty in Sync" was held during the last edition of Cosmoprof Worldwide Bologna in March 2023. The conference, organized in collaboration with EUROMONITOR INTERNATIONAL explored the combination of beauty and health in the region.

Nazih Hamad, Founder of Nazih Group, attended Cosmoprof Worldwide Bologna 2023 and was awarded the Cosmoprof LIFE ACHIEVEMENT AWARD for his contribution to the development of the beauty sector in the Middle East. For Nazih, digitization and social media, in particular, are strategic tools where brands can interact with customers, giving advice and share information to satisfy their requests and curiosities.

The talk highlighted the fundamental role of the Middle East for the cosmetics industry: it is a rapidly growing market, with a high per capita income. Local authorities have enacted policies to prevent counterfeiting and illegal trade. Another key element is the young average age of the population: 50% are under the age of 35-40, meaning that young and well-educated consumers are playing a distinctive role. Tourism is also growing, and the area is a strategic market for purchases, as prices are lower in Dubai than in Europe. International brands and suppliers can find new opportunities in the Middle East, however, attention must be paid to the differences between regions. The Middle East is not a homogeneous market: Saudi Arabia is the region with the most demanding consumers, Lebanon is the country that pays the greatest attention to innovation, Dubai is the trendiest metropolis, and Bahrain registers the highest purchase power.

image New beauty markets: opportunities and challenges in the Middle east and Africa

AFRICA: A MARKET TO EXPLORE

According to the latest analyses by statista.com, in 2023 the beauty market on the African continent reached a value of 7.89 billion USD, and an average annual growth rate of 8.79% is expected over the next 5 years. 87% of consumption is attributable to mass-market products distributed in retail channels. Growth is favoured by demographic development; today 1 billion 300 million people live in Africa. By 2050 it is estimated that 25% of the world's population will live in Africa; by 2100, the percentage will reach 40%.

Accessing the African cosmetic market is not easy. The needs of local consumers are very different from those of Western customers: different types of hair, skin and bodies and an extreme climate with heat picks are a challenge for many brands. Currently, the market particularly rewards local brands, however, new technologies and growing digitization offer new data and tools to multinationals, especially in sub-Saharan regions. The very low average age of the population, with three-quarters of the population under the age of 30, is a further factor that helps the growth of global products, together with growing urbanization and the development of the middle class, with greater purchasing power for women, too. The most strategic markets today are South Africa and Nigeria, the most populous state on the continent with over 220 million people, but Cameroon, Tanzania, Ghana, Ethiopia and Kenya are also promising areas for analysts.

Geo-location and personalization are the two key factors to be successful among local consumers. As highlighted for the Middle East, the African continent is also a territory with many facets. Cultural, religious, political, social and economic differences make Africa a real kaleidoscope. Knowing trends, market regulations and consumer needs is generally a key element in trying to exploit the opportunities offered by less explored markets. 

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