Market analysis, growth, trends and forecast
The beauty industry in Saudi Arabia is growing at a rapid pace. The relatively small population of 28 million constitutes an enormous group of consumers with a standard of living incomparable with almost any other country in the world. With the GDP of USD 25,961 per capita, the country has the highest consumption rate of cosmetics and beauty products in the MEA region, as well as one of the highest worldwide.
KSA market overview
Saudi Arabia’s beauty and personal care market is forecasted to reach USD 5.5 billion by 2024 growing at a CAGR of 10.49% during the forecast period (2019-2024). The major driver in the beauty market is the base of local consumers with high incomes and the country’s growing young population. With 71,5% of the population between the ages of 15 and 64 in 2017 according to Statista, the large proportion of the country is at prime shopping age.
In a culture where internationally bestselling products are closely associated with social status, the young and aspirational population is keen on investing in personal grooming. Consumers in Saudi Arabia tend to spend much more on their personal appearance than Western consumers. An average Arabian woman spends no less than $3,800 per year on cosmetics, making it one of the biggest consumer categories in the country thanks to changing laws and social codes.
Cultural factors affecting consumer behavior
There are many cultural factors that had led the increasing demand for global beauty brands in the region. Even though the vast majority of women will cover their face and hair in public, the increasing number of women joining the workforce and the requirement to look presentable at work has further boosted the sales of cosmetic products.
With over 13 million women in the Kingdom, empowering women to enter the workforce has proven to be one of the key factors that had strengthened the economy and is projected to create millions of jobs in the future.
Rising employment rates have also increased the affordability of beauty and personal care products encouraging consumers to spend more. Retail sales on makeup rose from $410 million in 2012 to $576 million last year, according to marketing research group Euromonitor International.
Whites store Riyadh
The preferences for grooming and unfavorable weather conditions the demand for cosmetic and beauty products is expected to grow briskly over the next few years. In the Middle East, taking care of one’s body has always been deeply rooted in the culture, for both men and women.
The younger population is especially conscious of the effect the hot, dry and humid environment has on their physical appearance, and is taking every measure possible to minimize the negative impact. Keeping your body hydrated, both from the inside by drinking enough water and by sticking to the skin routine fitting their skin’s needs ranks very high on the list of priorities for Gen Z in the GCC region. Since sports activities have also been recently open for the public, more and more women have joined public gyms, making regular exercise a part of their daily routine that helps them both look and feel their best.
With the importance of maintaining a presentable appearance by both sexes, spending more time and money investing in grooming. Harsh weather conditions in the region had only increased the demand for diverse personal care and beauty products which is especially detectable in major cities in the Kingdom, with Jeddah and Riyadh as the two cities that constitute a major share of a younger population, indicating larger consumption patterns.
A lot of demand for Western beauty brands comes also from young Saudis who have spent time abroad studying and are well familiar not just with global beauty brands, but have adopted a different lifestyle that affects the way they shop, too.
The importance of social media
Deep internet penetration had also majorly contributed in driving up awareness of cosmetics and beauty products in Saudi Arabia. The country has the highest number of active social media users in the region on most social media platforms including Instagram, Facebook, Snapchat and Twitter.
The Gulf country also has the global highest Youtube watch time per capita. On Youtube, beauty focused content has attracted over 1,9 billion views in KSA, and this figure is rising at a rate of almost 187% each year. According to Google, arabic content is growing faster than beauty content produced anywhere else in the world.
The trend of social media influencers showcasing their beauty regimens is on the rise, and both local and international beauty companies are turning to influencers to increase their brand awareness and reach potential consumers. It is especially noticeable with major color cosmetic brands, who are experiencing the highest growth attributed to the trend of contouring, highlighting and strobing, majorly driven precisely by makeup tutorials on social media.
Middle Eastern influencers have been redefining the industry and challenging conventional beauty standards one post at a time. With more than 10M followers on Instagram, Saudi Model Roz, a beauty influencer based in Los Angeles took over the mainstream with her fearless style, much different from the one of an average Saudi woman. In July 2019 she also became the first Saudi woman to work with Victoria’s Secret, being featured in the campaign for their PINK label.
Gaining their popularity through social media, Arab beauty influencers are slowly becoming today’s hottest entrepreneurs. Huda Kattan, one of the world’s first and biggest beauty influencer turned business woman is leading her $1BN brand Huda Beauty which is dominating the color cosmetic race.
In addition to a strong online presence, the ongoing expansion of mobile applications and the growth of e-commerce is helping in expanding the market further by making shopping for beauty products easier and more affordable.
KSA is a drawcard for global beauty brands
The market is also witnessing a high demand from middle-class consumers. Mass-market products are growing in popularity due to their diversity and lower price point resulting in more and more mid-range products entering the region. With the economy on the rise, the segregation between mass and premium brands is narrowing, making global brands top sellers in Saudi Arabia. The change had also been attributed to the growing number of tourists in the region, increasing the demand for a wider range of products catering to consumers with different needs and preferences.
The market of mass brands is growing due to increased consumer awareness and developing distribution infrastructure, such as the one by NDC (National Distribution Company). NDC provides a fully inclusive distribution service to over 25 western brands across the Middle East.
“The beauty industry in Saudi Arabia has caught the attention of global corporate giants as well as local brands for a reason. The Saudi beauty market is the largest in the Middle East, estimated at over SR 60 billion annually, with a forecast of 11 percent annual growth rate. The big international corporations are already present, benefiting from the growing young population and the rising disposable income, enjoying the country’s modern economy with a business-friendly environment.
Changes in lifestyle drive the constant growth of the beauty market and have shifted the general idea of status and redefined consumer behavior, both online and in-store, for mass and premium product categories alike.
Arriving early in the market allows the brand to shape preferences of Gen Z and millennial consumers, who are not only more discerning in their expectations from beauty products, but are also willing to pay more for better quality products that fit their needs.
One of the biggest benefits to international brands who are looking to tap into the Saudi beauty market is the existence of well-established distribution channels. Working with a prominent local distributor secures the brand’s efficient and successful market entry. Reaching and serving Saudi consumers is made easier than ever through the distributor’s loyal customer base and wide-spread marketing and sales channels, as well as extensive experience in logistics, distribution and local regulations.” says Tyseer Al Tarifi, General Manager of National Distribution Company.
Recognizing the huge potential of the market, major beauty groups are entering the region. The Kingdom’s rising economy has become an investment focus for global brands such as L’oreal, Shiseido and Estee Lauder. And while this specific and demanding market presents a challenge for international brands, companies are extremely attentive to Saudi consumers slowly adapting to the market that’s growth is expected to continue due to its strong economic growth and young population oriented towards the western lifestyle.
Reflecting the global trends, beauty and personal specialist retailers are the main distribution channel. Many international retailers have capitalized on the market bringing in a new retailer experience into the region, with engaging and entertaining shopping experiences. But it’s not just retail that’s going through a makeover of sorts. The region is experiencing a trend of new concept stores and online platforms such as Noon, Souq and Faces, as well as spa and beauty salons, often led by young female Saudi entrepreneurs.
It’s not solely the international retail chains that are growing stronger. Whites, ranked 1st by FORBES magazine as the most innovative and successful retail concept in Saudi Arabia for two consecutive years, is the biggest retailer in the Saudi market with more than 100 shops distributed all over Saudi regions particularly in major cities is opening one new shop every 14 days, positioning itself an appointed destination for beauty, lifestyle, and wellness all over the region.
KSA beauty market trends and forecast
As the region is becoming more and more conscious about the ingredients of the products, the market for organic and ethically sourced cosmetics is growing quickly. With the number of consumers interested in buying natural products continually on the rise, both local and international market players have turned to developing organic, clean beauty products. The demand for organic beauty products opened doors for many vegan Australian brands such as Sukin, as well as up and coming K-beauty brands.
While more and more global brands are slowly adapting to meet the specific needs of Saudi consumers, there’s a growing trend of small, disruptive beauty brands entering the Saudi market and addressing the demands of the market when it comes to beauty, skincare and haircare alike, often created by inspiring Gulf women such as K7L by Areej Sultan Al-Essa , Shiffa by dr. Lamees Hamdan and MZN by Muzon Ashgr.
The retail value of beauty and personal care in Saudi Arabia is projected to reach $6.9 billion in 2021 owing to a growing market for natural products, personalized products and services. With over a third of global consumers stating brand sustainability as the key deciding factor in their product choices according to Unilever, the demand for natural and organic products in the Middle East is expected to grow by 12-15% each year until 2023 presenting an untapped potential for cleaner and sustainable brands in the market.
- Goldstein Research Saudi Arabia Cosmetics Market – Industry Analysis, Size, Trends, Share, Demand, Growth Drivers, Opportunity Assessment, Regional Outlook & Forecast 2017-2025: https://www.goldsteinresearch.com/report/saudi-arabia-cosmetics-market-size
- Euromonitor International Beauty and Personal Care in Saudi Arabia Report: https://www.euromonitor.com/beauty-and-personal-care-in-saudi-arabia/report
- Euromonitor Color Cosmetic in Saudi Arabia Report: https://www.euromonitor.com/colour-cosmetics-in-saudi-arabia/report
- Health and Beauty Cosmeceuticals Industry and Market Expansion in Saudi Arabia: https://www.omicsonline.org/open-access/health-and-beauty-cosmeceuticals-industry-and-market-expansion-insaudi-arabia-2167-7689-1000172.php?aid=79154
- Mordor Intelligence Saudi Arabia beauty and personal care market – growth, trends and forecasts (2019-2024): https://www.mordorintelligence.com/industry-reports/saudi-arabia-beauty-and-personal-care-market