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Iranian skin care booms thanks to significant marketing and advertising efforts

August 25th, 2012
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CA2_BlogAnalyst Insight by Irina Barbalova, Head of
Beauty and Personal Care Research at
Euromonitor International

Growing from a small base, significant marketing
and advertising activities have had a
major influence on world-beating growth rates in Iran's skin care market, which
grew by 24% in 2010 to reach IRR3.2 billion (US$0.3 billion). This rise was
also helped by the fact that higher oil prices – one of the country's leading
industries – have contributed significantly to an increase in average national

Both international and domestic skin care
have expanded their footprints in Iran by targeting pharmacologists and
dermatologists, encouraging awareness in consumers who were invariably not
accustomed to specific skin care routines.

Nourishers/anti-agers achieved the strongest
growth, expanding by 26% in 2010 to reach a total of IRR195 million, a rate
that is expected to be sustained over the forecast period. This growth is being
driven by women who are becoming increasingly aware of facial care thanks
to greater familiarity with product offerings.

The Iranian
skin care
market remains dominated by mass products, which account for 62% of total
sales, although premium products are gaining ground, particularly in the facial
care category where women are more
inclined to opt for better quality products if they are affordable.

Currently, the market is dominated by domestic
player Shekofa Kish, which held an 18% share in 2010, while Nivea remains the
single most popular brand. Other significant
domestic players include ACT Cosmetics and Poober, which both gained in 2010 to
reach an 8% share each.

Looking ahead, a growing youth population and
changes in consumer patterns in Iran
are likely to fuel further growth in this market
over the forecast period, prompting a 7% CAGR, which should give the skin care
category a value of IRR4.6 billion by 2015.

Facial care dominates in the United Arab Emirates

Skin care
in the United Arab Emirates
remains a small and fragmented market. Strong
growth of 11% in 2009 gave the market a value of AED401 million (US$0.11
billion), offering small-scale opportunities. This was a weaker performance
than the CAGR of almost 17% before the recession hit, reflecting lower consumer
confidence that is only now being restored in the country and throughout the
Middle East region.

An expanding retail landscape, combined with a
great deal of product innovation, are the main driving forces behind market
expansion, which is mainly being fuelled by gains in facial care, specifically anti-ageing and skin whitening products.

Facial care
achieved the highest growth rate, expanding by 12% in 2009 to reach AED227
million – being the largest category in the market with a 57% value share. This
is because facial care is very
important to women, a factor that is reflected by an array of targeted
products, with facial moisturisers and nourishers/anti-agers dominating,
necessitated by the harsh weather.

Currently, the market is led by Beiersdorf Middle
East, with a 15% share, a figure that also underlines the fragmented state of
the market. Overall, skin care is dominated by international players,
with both Unilever and L'Oréal also commanding low but increasing shares.

Looking ahead, market growth should be maintained
with a forecast 5% CAGR, indicating an overall market value of AED520.3 million
by 2015. The biggest gains should continue to be seen in the all-important
facial care category, which is expected
to grow at a 6% CAGR to reach AED307 million by 2015.

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