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Natural Cosmetics Showing Promise in Middle East


LONDON—A new report released by Organic Monitor stated healthy growth in the Middle-Eastern market for natural cosmetics is continuing in spite of political instability and social unrest, forecasting a 20-percent expansion this year. Natural cosmetic sales are increasing at a fast rate in key country markets, although turbulence in the region has curbed investment and consumer spending power.

The region’s largest natural cosmetics market, UAE, comprises more than half of total revenues. In other countries, demand is mainly concentrated in major cities such as Riyadh, Kuwait City and Manama. The study also found affluent consumers and tourists generate most demand for natural and organic cosmetics in the region.

The major drivers of market growth are growing consumer demand for chemically clean cosmetics and expanding distribution. Consumers are buying natural cosmetics as they become concerned about synthetic chemicals in cosmetics and toiletries. Product penetration is increasing in pharmacies, beauty retailers and department stores.

High growth rates, however, are partly because the market is growing from a small base. Compared to Europe and North America where the market share is above 3 percent, natural products comprise just 0.1 percent of cosmetic sales in the Middle East. Although the region has a sizeable consumer market, adoption rates are low because of lack of consumer awareness and high product prices. There is also an absence of indigenous brands, with European and American brands mainly capitalizing on high market growth rates.

The market leaders are Korres and Neal’s Yard Remedies, partly because of their distribution strategies. Both brands are investing in concept stores, enabling them to educate consumers on their products and differences between conventional cosmetics.

Direct marketing also gives these brands the advantage of fostering customer relationships and getting vital feedback. In its Middle-Eastern Market for Natural Cosmetics report, Organic Monitor predicts Neal’s Yard Remedies to become market leader if it continues to expand its retail network in the region.

The market analysis finds companies are facing difficulties in marketing natural cosmetics to consumers. Unlike Europe and North America, the Middle-East has a small market for organic products, preventing consumer demand to percolate from foods to cosmetic products. In mainstream channels, there is high competition from pseudo natural brands, which are often cheaper and supported by large marketing budgets.

Organic Monitor draws many comparisons between the Middle-Eastern and Asian market for natural cosmetics; both regions are fragmented in terms of retail structure for beauty products. In the naturals sector, low adoption rates are because of consumer confusion and inadequate distribution. Possible solutions to overcome such market barriers will be discussed in the upcoming Sustainable Cosmetics Summit, taking place in Hong Kong on Nov. 7 and 8. Major topics on the Asia-Pacific summit agenda include strengthening consumer demand, market entry methods, certification and standards, distribution strategies and marketing challenges.

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