Beauty, Personal Care Industry Rises in Middle East, North Africa
Globally, the cosmetics and personal care market has seen exponential growth in sales in recent years. The total amount spent globally in the beauty industry in 2020 was US$438 billion, rising to $528.6 billion in 2022, representing a growth of 9.4%. This demand behavior is interesting due to the COVID-19 pandemic factor that was an important driver for this industry, as well as the increase in concern for healthcare and personal hygiene. The result is a trend of purchasing cosmetic and skin care products through e-commerce channels.
This favorable outlook is set to continue in the coming years as revenues in the beauty and personal care market are forecast to reach US$571.1 billion in 2023, growing at an annual rate of 3.80%. Within the industry’s global sales, it is important to highlight the growth momentum of the Middle East and North Africa (MENA) market. To begin with, there are around 486 million consumers from Arab countries, accounting for 6% of total global sales in 2021.
There are several factors that position the MENA region as a potential growth market for the beauty and personal care industry. The first is the income of the population. Arab countries have some of the world’s most affluent consumers. In 2021, countries such as Qatar (US$66,838), Bahrain (US$26,562) and Saudi Arabia (US$23,185) ranked among the top countries with the highest annual GDP per capita.
In addition to this, the composition of the population is another relevant factor, as 48.3% of the population is female, a consumer segment that is the most important when it comes to the beauty and personal care industry. Also, the increase in the urban population as well as retail distribution channels through e-commerce, which has expanded at a rate of 11.5% annually, are factors that have contributed to the exponential rise in sales of these products.
However, among Arab countries, there are clearly identifiable markets that stand out as the countries with the greatest business opportunities for the personal care sector, due to their strong domestic consumption in recent years. Markets such as Saudi Arabia and the United Arab Emirates in the Gulf, and Morocco and Tunisia in North Africa are interesting to analyze.
Saudi Arabia: Exponential Market Expansion
Saudi Arabia is one of the leading markets for cosmetic products in the MENA region. In recent years, it has been noted that Saudi consumers, totaling 35.9 million, tend to spend substantially on their personal appearance due to factors such as changing lifestyles and a growing urban population, as well as innovative branding and product advertising strategies that are further driving demand for cosmetics, fragrances and personal care items.
The contribution of the cosmetics and personal care industry to the Saudi economy is growing. In 2021, the country’s beauty market was valued at US$3.82 billion and is expected to reach a value of US$5 billion in the coming years.
The growing demand for natural/organic, herbal, halal, innovative and ecofriendly packaging designs is attributed to the market growth in the country. In addition, Saudi Arabia has the highest YouTube play time per capita globally related to beauty-focused content. These consumers are extremely well-informed about international cutting-edge trends as well as product ingredients.
United Arab Emirates: A Growing Market
Since 2017, the United Arab Emirates’ (UAE) beauty and personal care market has been at the center of the international stage. That year, the country ranked seventh globally in terms of per capita spending, at US$239.
It’s expected that total revenue in the UAE beauty and personal care market will reach US$1.14 billion by 2024, with 24% coming from e-commerce channels. Key factors contributing to a favorable sales outlook for the Emirati beauty market are a young population, high smartphone and internet penetration, and some of the highest social media consumption in the world.
Morocco and Tunisia: Two Emerging Markets
While the Gulf countries currently hold the lion’s share of the regional market, the key growth in the coming years is expected to come from North African countries like Morocco and Tunisia. The beauty and personal care market for the two countries is expected to reach US$2.79 billion.
It has been observed that the Arab countries represent a land of opportunity for the beauty and personal care sector, as they are strong consumers of these cosmetics and personal care items. On the other hand, the Mexican industry ranks third in terms of cosmetics production in the world, only surpassed by the US and Brazil, according to the Ministry of Economy. In addition, the sector contributes 0.7% of what is produced in manufacturing and 4.2% of the GDP of the chemical industry. Therefore, this is an opportunity sector in the Arab countries for Mexican exporters and producers.