The economies of the Middle East are turbulent ever since the Arab Spring in 2010, with trade hit by the ongoing unrest in the region. This has impacted sales of cosmetics and toiletries, although there are still opportunities for both regional and multinational players—especially in nearby Turkey, where a young population and growing urbanization has helped drive growth in sales of beauty products.
Despite these problems, the beauty markets on the Middle East and Africa posted good growth between 2008 and 2013. According to Euromonitor International, the Middle East and Africa beauty market was valued at $24.3 billion, rising by 72% over this period. The majority of sales came from mass brands, which accounted for $14.7 billion. Interestingly, fragrance is the best selling category, with one in five purchases being a scent, with hair care products following closely behind. Other product categories, notably sun care and depilatories, barely register—highlighting the cultural preferences of consumers in the region.
Turkey: One of the MINTs
Compared to the Middle East and Africa, Turkey is a much smaller market, valued at $4.1 billion, according to Euromonitor, but it did post strong growth of 75.6% between 2008 and 2013. Again, mass market brands dominate, accounting for three quarters of all purchases. Hair care leads with a value of $839 million, followed by skin care valued at $585 million.
This performance has led to Turkey being earmarked as one of the new emerging economiesm the MINT countries (Mexico, Indonesia, Nigeria, Turkey), believed to offer big economic growth in the future. According to Eylem Bostanci, contributing analyst, Euromonitor International, urbanization has led to an increase in the number of highly educated young people working as professionals in Turkey’s large cities. “This has increased consumer interest in self-grooming, especially among young people, motivating people to place more emphasis on their appearance and personal hygiene,” she comments. The majority of beauty speciality retailers and large grocery stores are located in urban areas. As a result, urban consumers have become more familiar with products, and started to use products they had not previously purchased, boosting the penetration of even basic categories such as deodorants, body washes and shower gels. “The growing number of urban households raised demand for sophisticated products. Skin care, fragrances and color cosmetics are categories that mostly base their sales on urban consumers,” says Bostanci.
Turkish Consumers Trade Up to Masstige
Masstige products are desired by Turkish consumers looking for good quality as well as affordable prices. As a result, many companies, including multinationals such as L’Oréal and Beiersdorf, have launched more sophisticated products, especially within the color cosmetics segment.
Euromonitor has noted a trend for area specific products, such as Garnier Under-Eye Roll-On BB Cream by L’Oréal Turkiye and Flormar Perfect Legs Foundation by Kosan Kozmetik, with companies focused on launching extensions of their existing successful brands as opposed to creating new ones. In hair care, growth was fueled mainly by the launch of new and sophisticated products designed to nourish and protect hair, such as the 2013 launches Gliss Marrakesh Oil & Coconut shampoo and conditioner by Türk Henkel.
“Turkish consumers are fond of multinational products when they can afford them,” observes Bostanci. “This was partly the reason for the success of direct sellers Avon and Oriflame, whose products are regarded as foreign, thus of better quality than locals products. Although many consumers cannot afford a foreign brand such as Dior, they can at least afford a masstige Avon or Oriflame product.”
Promotional Activities Drive Sales
Discounting and promotions have been a major factor in the growth of beauty brands in Turkey. For example, L’Oréal offered a 25% discount on all its products through Watson’s beauty specialists in 2013. According to Bostanci, whereas some companies, particularly local ones, were able to increase their share through promotions, their sales often drop once they stop promotional activities. “Local company Eurkul Dagitim Pazarlama AS decreased the prices of its nail varnish products under its Golden Rose brand to remain below the prices of the Flormar brand by the local leading player Kosan Kozmetik, its main competitor.”
The growing presence of multinational beauty brands suggests confidence in the Turkish market, which will also benefit local producers and provide opportunities for growth, both at home and abroad.
For more the Middle East and Turkey, in-cosmetics 2015 (Barcelona, April 14–16) trends presentations will spotlight the regions with data and analysis to highlight the challenges and opportunities. For further information on in-cosmetics, visit www.in-cosmetics.com.
Imogen Matthews is a consultant to In-cosmetics. For more information, contact www.imogenmatthews.co.uk.