Gulf economies may be dampened by low oil prices, but consumers are still prepared to splurge on personal care products, as Heba Hashem writes
The oil-producing nations of the Gulf Cooperation Council (GCC) have long been considered a lucrative consumer market for international brands in the beauty and personal care product industries.
According to Euromonitor International, the retail value of the GCC region’s BPC market was US$9.3bn in 2016 – member countries are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE). Sales were 10% higher than in 2015, says the research company, which forecasts strong growth for the market over the next four years, with consumer spending to reach $13.6bn in 2020.
As the global oil price slump endures, however, governments are gradually cutting fuel and other subsidies on goods, and all GCC states will introduce a value-added tax (VAT) by the beginning of 2018. While the end of tax-free living is bound to affect consumer spending, all GCC countries are working on diversifying their sources of income in 2017.
These fiscal reforms could see the region’s economic growth reach an average rate of 3.4% in 2017, up from 2% in 2016, according to the Statistical Centre for the Cooperation Council for the Arab Countries of the Gulf.
Of course, there are some significant variations between GCC national markets. And with some of the most sophisticated malls in the region, an investor-friendly environment and a politically stable economy, the UAE continues to be the preferred gateway for international brands entering the GCC, and to some extent, the wider Middle East and North Africa (MENA) region.
According to Euromonitor, UAE consumers spent $2.2bn on beauty and personal care products in 2016. It predicts that spending will . . .
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