7 Min Read |
Consumer shopping habits are changing — fast. In the Middle East, dominant beauty incumbents and physical stores are increasingly challenged by the disruptive force of new startups and global social media platforms. A review of statistics collated by startup facilitator Virtuzone shows that beauty tech, Artificial Intelligence (AI) and e-commerce are booming within the industry; and this is reflected in the market, as new brands direct their energy towards these areas.
The result? A dramatic shift in the way consumers browse, choose, purchase, use and review beauty products.
In the UAE, spend by consumers on personal care and beauty products in 2018, was estimated by Euromonitor International to achieve $13.9billion. Fragrances, skin care, men’s grooming, color cosmetics and hair care were the five most popular categories for spending. The value of the market, along with its continued growth, has made the Middle East a viable investment for industry startups in recent years. The most successful startups in the region are those which have embraced a combination of innovative technology and social media influencer marketing.
So who are those brands? Where did they come from and how did they gain traction so rapidly?
We look at six businesses disrupting the way consumers shop in the Middle East. These brands highlight the varying ways in which new technology and broader social trends are shaping customer perspectives and choices in an ongoing manner — so that conventional beauty brands that resist these changes are losing their previously stable place in the market.
Instaglam is an on-demand beauty service based in Dubai, founded and self-funded by Haifa Addas in 2017. The inspiration came, in part, from Addas’s childhood experiences; she points out that beauty is traditionally played out within the home environment among Middle Eastern women and therefore it follows that an on-demand service would be preferable to a salon experience. Her mother was a makeup artist and hair stylist, and her grandmother was the Miss Lebanon of 1924. Her family history along with the influence of living in a number of different countries and cultures as a child and adolescent taught Addas that the demand for beauty exists worldwide.
The brand’s website and recently launched app connects vetted beauty professionals with consumers in the UAE market. It’s a consolidated platform with no need for a middle-man, simplifying the process of booking industry professionals for beauty services at convenient locations.
Beat the heat and let us take care of you at the comfort of your home! With a click of a button, our talented and personally – vetted hair, nails and makeup experts come directly to you 💇💅💄 Download now 👉 (link in bio) #INSTAGLAM #beauty #makeup #makeupjunkie #homeservice #dubaimakeup #dubaibeauty #beautyapp تغلبي على الحرارة ودعينا نعتني بك في راحة منزلك! بضغطة واحدة يأتي إليك فريق منتقى بعناية من خبراء الشعر والمكياج و الأظافر 💇💅💄 تحميل التطبيق (الرابط بالبايو)
A post shared by INSTAGLAM (@instaglam.co) on Jul 3, 2018 at 10:31am PDT
Instaglam and other on-demand startups disrupt the beauty industry by bringing consumers and professionals closer together. It is a disruption of power and monopoly — by vetting and approving service-providers in order to consistently meet the high expectations of its customers, Instaglam gives a more personal experience and enhances consumer freedom and choice.
Disrupting: Business Operations
This fast growing free booking platform is disrupting business operations within the beauty industry by taking over a host of usual administrative tasks — and by making it as easy to book a haircut as it is to book an international flight. Shedul can manage appointment bookings, point-of-sale, customer records, human resources, inventory and even financial reports. The platform has a user base of over 40,000 beauty merchants globally and its bookings are growing at an average rate of 35% each month.
Based in Dubai, Shedul closed a $6 million round of Series-A financing lead by Middle East Venture Partners (MEVP) with the backing of Dubai’s BECO Capital and the San Francisco-based Lumia Capital. Its co-founders, William Zeqiri and Nick Miller, say that management software for salons and spas are often too expensive and too difficult to use — the result of which is that 52% of salons in the United States alone still operate without any digital booking software.
A post shared by Shedul Booking Software (@heyshedul) on Apr 3, 2017 at 7:08am PDT
Dubai and the wider Middle East is taking a new position as a leader in innovative and functional beauty technology with Shedul and other practically-driven, consumer focused brands at the forefront.
In 2018 this e-commerce startup in Kuwait raised $45 million to develop its offerings — 13.6 million in KWD. This substantial funding came from Boubyan Petrochemical Company, a Kuwaiti investor with an interest in several different sectors including petrochemicals, healthcare, education; and now beauty.
Abdulwahab Alessa, an entrepreneur from Kuwait, founded Boutiqaat in 2015. It is an e-commerce platform that sells beauty and fashion products via its website and mobile apps, with over 700 international brands currently represented. What sets Boutiqaat apart from other e-commerce providers is its virtual boutiques promoted by social media influencers who add their favorite products so that fans can browse and buy the curated selections of their favorite, trusted Instagram stars. Boutiqaat manages all transactions that take place in these online boutique stores but allows influencers to choose what products they promote.
A post shared by بوتيكات (@boutiqaat) on Dec 15, 2018 at 10:55am PST
This taps into two key preferences of beauty consumers in the Middle East and ties them together: online shopping and social media reviews to help them make purchasing decisions.
4. Huda Beauty
Huda Beauty is a Middle Eastern cosmetics brand based in Dubai, which grew from unusual beginnings — disrupting beauty industry marketing conventions from conception to implementation.
It was founded in 2013 by social media influencer Huda Kattan and made around $300 million in revenue in 2018. And it all started in 2010 with a blog on which Kattan shared simple makeup tutorials; a blog which is now the most viewed beauty blog online. Instead of selling her blog and Instagram popularity to build a beauty brand under the umbrella of a larger business, Kattan decided to do it herself; she started the cosmetics line with $10,000 of her own savings and a further $6,000 borrowed from her sister.
A post shared by Huda Kattan (@hudabeauty) on Jan 26, 2019 at 11:21am PST
Huda Kattan is a rarity – a social media influencer who has built a billion dollar business from the ground up. Her ascension marks the potential of profound changes in the way beauty marketing works — because the marketing and consumer trust-building happened before a product line was launched at all.
5. Golden Scent
Disrupting: Sales Channels
Golden Scent is a Saudi e-commerce platform founded by Malik Al-Shehab and Ronny Froehlich in 2014. It sells beauty products to customers within the Kingdom of Saudi Arabia, and has achieved steady growth over the last five years to become one of the leading online shopping platforms in the Kingdom.
A post shared by قولدن سنت (@goldenscentcom) on Jun 23, 2018 at 3:00am PDT
The platform has raised Series A investment and attracts 300,000 customers to its website each month. Golden Scent has noted that accredited its success to the growth of the online beauty market in the GCC region. Its popularity and investor interest demonstrates that Middle Eastern beauty consumers are increasingly turning away from brick-and-mortar stores and embracing the wider choice available to them online.
Disrupting: Salon Services
Finally, mobile haircare brand Blowout&Go is proving itself an able disruptor in the realm of beauty technology, using its intuitive app to offer on-demand services across Dubai and the UAE. The app allows users to browse and book professional hair stylists and makeup artists — all chosen and approved by the company — who attend customer homes, hotels and workplaces. Blowout&Go’s Pro division offers mobile hair styling and makeup for photoshoots, weddings and events.
The brand also has an e-commerce store offering next day delivery within Dubai and the UAE so that customers can buy its salon-quality products for home use.
#tbt to glamming up our STUNNING @lopyrevavika The BRAND AMBASSADOR OF FIFA World Cup 2018 ⚽️ – Hair #blowoutandgo Makeup @samiraolfat – #fifaworldcup2018 #fifa18 #russia #fifarussia2018 #iran #teammelli #fifa #lopyrevavika
A post shared by Blowoutandgo (@blowoutandgo) on Jun 20, 2018 at 9:55pm PDT
This use of technology cuts out overheads, allowing the brand to manage a team of professionals without needing a physical salon to house them. And in doing so, this adds value for consumers who prefer convenience and a personal service. Like Instaglam, Blowout&Go’s success is rooted in the way it embraces the new opportunities that are becoming available as a result of technological development and uptake among the public.
Direct Communication, Influencer Marketing and Online Shopping
These brands are examples of a movement towards a new way of shopping in the Middle East. They are simultaneously shaping and being shaped by market changes; offering products and services in new and innovative ways that respond to changing demands and more culturally intuitive ways of interacting with clients.
As the shopping habits and preferences of Middle Eastern beauty consumers continue to change, we expect to see the region’s beauty market grow as it increasingly welcomes both products and inspiration from elsewhere in the world. Equally, customer satisfaction is enhanced as more brands focus on offering on-demand and personal services.
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