opportunities in the middle eastern and turkish hair care market

OPPORTUNITIES IN THE MIDDLE EASTERN AND TURKISH HAIR CARE MARKET

IN-COSMETICS 2015

BENEDETTA CORDARO, SENIOR RESEARCH ANALYST (MIDDLE EAST & AFRICA)

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2

Euromonitor International: Strategic Global Market Research

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THE MEA REGION ON A GLOBAL SCALE

THE MIDDLE EAST AND TURKEY

REGIONAL TRENDS

COUNTRY SPECIFIC FEATURES

PROSPECTS

CONCLUSION


4THE MEA REGION ON A GLOBAL SCALE

US$ 16bn

US$ 16bn

US$ 13bn

US$ 22bn

US$ 5bn

US$ 4bn

US$ 1bn

Largest Smallest

Global Hair Care Market in 2014




0.000

5,000.000

10,000.000

15,000.000

20,000.000

25,000.000

Asia Pacific WesternEurope

Latin America North America EasternEurope

Middle Eastand Africa

Australasia

Global Hair Care Market in 2014

US

$ M

illi

on




US$ 5

US$ 14

US$ 26

US$ 32

US$ 37

US$ 37

US$ 3

<30 US $ 30-20 US $ 20-10 US$ 10-5 US$ >5 US$

Hair Care Products per Capita Spending in 2014




0 5 10 15 20 25 30 35 40


Asia Pacific

World

EasternEurope

Latin America

WesternEurope

Australasia

NorthAmerica

Per Capita Spending – Regional Breakdown

US$ / year / person




+ 11 %

+ 2 %

+ 2 %

+ 5 %

+ 1 %

+ 1 %

+ 11 %

Highest Lowest

Hair Care Growth per Region, 2013-2014




-2

0

2

4

6

8

10

12

0.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

Asia Pacific WesternEurope

Latin America NorthAmerica

EasternEurope


Australasia

Gr

ow

th %

US

$ m

illi

on

Hair Care Market Growth, 2013-2014

2013 2014 Growth 13-14 CAGR 14-19




The MEA Region Hair Care Market on a Global Scale• Of global hair care

market6%

• Fastest growing market in 2014

11% value growth

• Highest forecast growth (2014-2019)4% CAGR

• Lowest per capita spendingUS$ 3




REGIONAL TRENDS


PROSPECTS

CONCLUSION


12

Six Core Hair Care Markets in 2014


US$ 3bn

65% of MEA hair care market

4% of global hair care market

TURKEY

IRAN

EGYPT

SAUDI

ARABIA

ISRAEL

UAE



13

The Middle East and Turkey: a Lucrative Hair Care Market


US$ 830mn

Largest Smallest

US$ 790mn

US$ 80mn

US$ 650mn

US$ 290mn

US$ 240mn

TURKEY

IRAN

EGYPTSAUDI

ARABIA

ISRAEL

UAE



14THE MIDDLE EAST AND TURKEY

0

100

200

300

400

500

600

700

800

900

Iran Turkey Saudi Arabia Israel UAE Egypt

Market Size in 2014

US

$ M

illi

on




Hair Care per Capita Spending in 2014

US$ 1

US$ 10

US$ 11US$ 36

US$ 29

US$ 22

Highest Lowest

TURKEY

IRAN

EGYPTSAUDI

ARABIA

ISRAEL

UAE




0 5 10 15 20 25 30 35 40

Egypt

Middle East and Africa

Turkey

World

Iran

Saudi Arabia

UAE

Israel

Hair Care per Capita Spending in 2014

US $ / year / person




Highest Lowest

+ 29%

+13%

+5%

+12%

+11%

+8%

Hair Care Market Growth in 2013-14

TURKEY

IRAN

EGYPTSAUDI

ARABIA

ISRAEL

UAE




0

5

10

15

20

25

30

35

0.00

100.00

200.00

300.00

400.00

500.00

600.00

700.00

800.00

900.00


Gr

ow

th %

US

$ M

illi

on

Hair Care Market Size and Growth

2013 2014 Growth 13-14 CAGR 14-19




0

1

2

3

4

5

6

7

8

9

10

0

20000

40000

60000

80000

100000

120000

Turkey Iran Saudi Arabia Israel UAE Egypt

Gr

ow

th

'00

0 L

itr

es

Hair Care Retailing in Volume

Retailing Volume 2013 Retailing Volume 2014 Growth 13-14 CAGR 14-19




0

100

200

300

400

500

600

700

800

900


Conditioners andStyling Agents

Shampoos

Others

Hair Care Breakdown

US

$ M

illi

on




15% growth across the

region

UAE and Israel mature

market with

consumption level

similar to WE and NA

Low but growing per

capita spending

means room for further

development




REGIONAL TRENDS


PROSPECTS

CONCLUSION


23

Trends Affecting Consumption

REGIONAL TRENDS

Socio-economic factors

Consumer insights and consumption patterns

Competitive landscape

Differentiation

Distribution channels



24

A growing, young, urban population

REGIONAL TRENDS

40%

80%

11%

Households are urban

Population under

the age of 25

Average increase

of per capita

disposable income

Better economic conditions:

Higher affordability

Increased employment rates

Women’s economic independence

Urbanisation leads to:

Easier access to services

Third sector employment

Higher availability and accessibility

Consumption driven by young consumers:

Higher education level

More exposed to global trends

Less brand loyal



25

Young, Muslim, Women: A Sophisticated Target

REGIONAL TRENDS

TARGET

ISLAM

• Women

• Men’s grooming less than 2%TARGET

• Over 90% Muslim population

• Exceptions: Israel and UAEISLAM

• Misconceptions and mythsVEIL

• Hair considered signifier of beauty

• Image conscious

• Natural and traditional treatmentsBEAUTY



26

Price still drives purchase choices

REGIONAL TRENDS

90%

Price sensitivity

Brands usually considered mass brands, such as Garnier, Pantene, Sun Silk,

Dove, are often considered premium

Per capita disposable income still quite low (average US$6,000 per year)

ranging from US$3,000 in Iran and Egypt to over US$20,000 in UAE and Israel

Of sales value is represented by mass brands

Price perception



27

Domestic brands challenge with low pricing

REGIONAL TRENDS

Domestic brands

Global

brands



28

More choice boosting consumption

REGIONAL TRENDS

NPDs and

differentiation

Across all

price bands

Price differentiation

Oil/keratin

Frequent NPDs

Natural/

organic/bio

Conditioning and repairing products

Wider availability



29

Modern retailing growing in prominence

REGIONAL TRENDS

+12% modern retailing

Higher accessibility

Higher availability

Higher affordability




REGIONAL TRENDS


PROSPECTS

CONCLUSION


31

A Highly Varied Region


0

5000

10000

15000

20000

25000

30000

35000

UAE Israel SaudiArabia

Turkey Iran Egypt

Inc

om

e,

US

$

Annual disposable income per capita

0

10

20

30

40

50

60

70

80

90

100

Israel UAE SaudiArabia

Turkey Iran Egypt

Po

pu

lati

on

, m

illi

on

Population in 2014



32

Why One Fits All Does Not Work


Israel Polarisation (economy vs premium brands)

Egypt Incipient market : oil trend not widespread

UAE 90% population comprised of expats

Iran Sanctions and high inflation




REGIONAL TRENDS


PROSPECTS

CONCLUSIONS


34PROSPECTS

0

5

10

15

20

25

30

35

40

45

0.00

200.00

400.00

600.00

800.00

1,000.00

1,200.00


Gro

wth

%

US

$ m

illi

on

2014 2019 Forecasted growth Forecasted CAGR

Hair Care Growth 2014-2019



35

Factors Sustaining Growth

PROSPECTS

Demographics and urbanisation

NPDs and product

availability

Modern retailing

Disposable income



36

Instability: A Major Threat

PROSPECTS

Political instability

Economicinstability

Effects on

Consumption




REGIONAL TRENDS


PROSPECTS

CONCLUSION


38

Middle East and Turkey Hair Care: A Bright Future

CONCLUSION

Growing dynamic markets

Shared consump-

tion patterns

Highly varied region

Political and economic

threats


THANK YOU FOR LISTENING

Benedetta Cordaro,

Senior Research Analyst (Middle East & Africa)

[email protected]

mailto:[email protected]

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