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Social media plays big role in growth of GCC brands
By Sajjad Ahmad May 09, 2018
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DUBAI: The GCC beauty landscape is shifting quickly as more local brands are entering the market to cater the changing demands of Arab consumers. Social media is playing a vital role in rise and growth of these companies in this fast-paced market, it was revealed during the Chalhoub Group ’s sixth White Paper, ‘GCC Beauty: Local Brands on the Rise?.

In-depth knowledge of the Middle East market and consumers is at the forefront of Chalhoub Group’s business practices. With over 60 years of experience in the industry, the Group is the go-to partner for major international brands wanting to enter the Middle Eastern market; with extensive experience in building brands in the region across the beauty, fashion and gift sectors.

After decades of international brands dominance over the Gulf beauty landscape, local independent players are on the rise and appealing to the modern consumer by standing for the region’s values and culture. This major shift in a so far constant retail environment is not incidental. To the contrary, it simultaneously results from and contributes to a profound change in how the whole beauty sector defines itself and operates nowadays. The emergence of homegrown beauty entrepreneurs combined with the surge in internet usage are key factors in the change seen in how the beauty sector defines itself and operates nowadays. The Chalhoub Group sees an overwhelming change in how the whole beauty sector defines itself and operates nowadays, and therefore chose to focus this sixth White Paper on modern beauty in the GCC and the change taking place in the retail ecosystem.

The Group’s research in the GCC has found that:

Evolving in a culture where sophisticated makeup is not only accepted but prized in everyday life, women in the Gulf allocate significant time and budget to their beauty routine.

Following the first half of 2017’s trend, the Gulf brick-and-mortar prestige beauty market has decreased by approximately -5% for the full year 2017. The largest decline in 2017 was seen in the fragrance category, with a shrinkage of around -10% compared to the year before. The makeup category was also struggling in 2017, decreasing by approximately -3%, while it was still slightly positive during the first half 2017.

As a result, the overall GCC prestige beauty market was estimated at approximately $1.8 billion for 2017, compared to $1.9 billion in 2016 1. Faced with this drop in sales, international brands have reduced their marketing investments in the Gulf Cooperation Council (GCC),

A unique phenomenon being seen in the region is how beautystas, or beauty stars, in the Gulf now use digital channels to train themselves into actual experts, flocking to social media networks to get inspired by and learn from powerful influencers.

Today, people expect to be perceived as individuals, whose needs cannot be simplified or modelled and should rather be answered with a customisable offering. This new reality explains the roaring success of independent (indie) beauty players that smartly capture and reflect the modern mindset.

In the Gulf, the fragrance category is split between Western and Oriental perfumes (the latter representing 60% to 65% of the total market 20), and traditional labels still have the upper hand on the brick-and-mortar market. However, names like Ghawali, Arcadia, Odict, Ne’emah or Widian are gaining ground in terms of awareness and recognition.

Whether they were established by influencers or not, most independent beauty brands in the Gulf develop efficient e-stores and use social media for promotion.

In this shifting environment, the Group’s White Paper identifies key steps that GCC and international beauty brands should take in order to prepare for the future:

Beauty brands can begin to accommodate local consumers by offering products that are customised to fit the features of the found in the region

International brands must embrace Arab beauty by offering products that enhance their features, rather than recommending products that will change their appearance

They must also devise and implement long-term, comprehensive and genuine strategies to convince consumers they understand the beauty culture in the region

Shifting focus towards online platforms is the way forward in regards to reaching a wider consumer base and offering to the new generation of Arab consumers the unique experience they seek

Anthony Chalhoub, Co-CEO Chalhoub Group, commented: “Understanding the modern day needs of consumers in the GCC and being able to keep up with the changing beauty landscape is key for international and indie brands to begin building a loyal customer base. It is essential that we study all aspects of the changing beauty landscape, including how social media influencers are connecting with people in the region, while adapting our methods to meet the demands of this fast-paced market.

Patrick Chalhoub, Co-CEO Chalhoub Group, added: “The competitive beauty landscape is shifting quickly in the region; meaning that the ability of brands to move from a traditional brick and mortar method of sales to an online one is the future of retail for both local and international brands. There is a long way to go, but creating a strategy that allows for a customisable retail experience is the direction in which brands should be heading, if they don’t want to be left out.”
 

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