Beauty in the GCC | Chalhoub Group White Paper 2018

Luxury beauty brands, entrepreneurs, influencers and journalists joined Walpole and the Chalhoub Group for breakfast at Corinthia London on Tuesday 10th April for our latest insight event focusing on Middle Eastern luxury beauty trends.

Please click here to read the report: GCC Beauty: Local brands on the rise?

Patrick Chalhoub, co-CEO of the leading partner for luxury across the region, in conversation with Walpole’s Charlotte Keesing, discussed the nascent generation of local beauty creators who know how to cater to the Gulf’s modern consumers and their specific habits, as well as the evolving dynamics of the prestige beauty market, which is worth $1.8 billion in the GCC.

The GCC consumers have evolved. They are now assertive, curious, determined, and are mostly influenced by their circles of friends on social media and by bloggers. In terms of beauty, they are focusing on makeup, and are looking for fun and color. This modern mindset has created a major opportunity for new, independent, niche beauty brands. An increasing number of local entrepreneurs are filling the gap and venturing into initiatives relevant to their own community. They are changing the GCC beauty scene and creating a new, vibrant & dynamic movement. They are challenging the institutional players who have been slow to react, and are forcing them to rethink their strategy. Chalhoub Group supports local initiatives that provide our customers with what they are looking for. We want to be an integral part of their journey and experience.”

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. The emergence of homegrown beauty entrepreneurs combined with the surge in internet usage are key factors in the change seen in the beauty sector, which is why The Chalhoub Group chose to focus this sixth White Paper on modern beauty in the GCC and the shift taking place in the retail ecosystem.

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

An integral part of the Gulf’s cultural and social construct, beauty is a crucial facet of how people in the region want to project themselves in a society where socialising is important – so much so that young beauty consumers are going beyond being well-informed to become actual connoisseurs, demanding sophisticated products and services developed specifically for their unique needs.

Hampered by challenging macroeconomic conditions and a fast-evolving environment, The Gulf brick-and-mortar prestige beauty market has decreased by -5% in 2017. Faced with this drop in sales, international brands have reduced their marketing investments in the GCC.

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

Beauty enthusiasts in the Gulf are young, digitally-connected and listening eagerly to social media influencers.

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

Local beauty brands are proud of their roots and position themselves as experts addressing an informed clientele.

Today consumer is looking for a personalised offer, this new reality explains the roaring success of independent (indie) beauty players that smartly capture and reflect the modern mindset by developing strategies and products evolving entirely around the unique GCC beauty demand.

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:

Begin to accommodate local consumers by offering customised products and develop multi-platform appealing strategies to engage their public further.

Implement long-term and comprehensive strategies to nurture an authentic connection with the new generation

Shift towards online platforms to reach a wider consumer base and offer to the new generation of Arab consumers the unique experience they seek.

The digital-savvy new players are entering the offline world and need the support of the industry in order to succeed, the beauty industry should embrace them.

Anthony Chalhoub, Co-CEO Chalhoub Group, added: “Digital and e-commerce have profoundly disrupted the GCC beauty landscape. Consumers are connected and very aware of trends, products’ benefits and techniques. In that context where beauty brands have to keep up with and even anticipate what their customers want, new local beauty players are capturing the essence of GCC clients’ needs and are challenging traditional firms. By shaking up the industry, forcing it to think differently and be more consumer-centric, they have a major and very positive impact. Chalhoub Group welcomes these homegrown beauty independents, some of whom we are proud to have helped expand internationally and become extremely successful. We need more of them.”

To read last year’s Chalhoub Group White Paper on the Age of Digitalisation, please click here: Chalhoub Group 2017 White Paper

For more information on this or Walpole’s other international work, please contact charlotte.keesing@thewalpole.co.uk.