The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
When Dina Sidani heard about a skin care start-up that patented the use of compounds from a plant native to the Arabian Desert which is said to harness hydration in one of the harshest climates on the planet, she jumped at the chance to work with the Abu Dhabi-based firm.
As chief innovation officer of Chalhoub, a leading retail conglomerate that partners with global fashion and beauty brands like Louis Vuitton, Dior and Sephora across the Middle East, Sidani had been on the hunt for brands like De L’Arta, founded by a team including Dr Lina Yousef, a Palestinian-American scientist with a background in botany and biology, for the incubator programme she oversees.
Sidani also welcomed MZN, a natural bodycare line produced in an all-women micro-factory in Saudi Arabia, Dubai-based henna art brand Azra, Jordan-based soap brand Sitti and Arabian male grooming brand Diggin’It to Chalhoub’s Beauty Makers incubator. Each brand received financial support for set-up costs, content creation and performance marketing.
“We’d love to help make the next Huda Beauty,” says Sidani, whose team is currently investigating investment opportunities to further the brands in its incubator. Each was chosen for its potential to bring regionally relevant storytelling to the Chalhoub beauty portfolio through community-based marketing. “It’s a lot harder to story-tell as a corporation rather than an individual,” she adds.
An online campaign promoting these incubator brands through Chalhoub’s multi-brand beauty retailer Faces generated seven million impressions, which Sidani says amounts to a return on investment almost double that of the retailer’s campaigns for niche brands. Buoyed by the reception of beauty brands with such a strong Middle Eastern identity, she is hopeful that Chalhoub’s initiatives can replicate the success of the likes of US-based beauty incubator Beach House Group.
But not all of the region’s up-and-coming beauty entrepreneurs are cut from the same cloth. Last month, fine artist-turned-brand founder Mohammed Hindash made a splash with a projection of his brand onto the 828 metre high Burj Khalifa tower in Dubai, to launch his $70 eyes-to-lips Beautopsy palette, the debut product in his namesake brand Hindash Cosmetics.
Meanwhile, global brands are finding ways to localise their offering for the region. At the Dubai Mall, MAC counters have been bustling with mask-wearing customers drawn in by images of Lebanese actress Nadine Nassib Njeim showcasing a Middle Eastern interpretation of the brand’s cherry blossom-inspired spring collection, which was fronted by an East Asian model in other territories.
These and other activations are a far cry from the not-so-distant past when luxury beauty products were seen in the region as the preserve of European or North American heritage brands, with campaigns reflecting an aesthetic often at odds with Middle Eastern instincts. What the rise of local beauty brands and regional ambassadors now seems to reflect is a growing appetite for local relevance and more than just a nod to local culture.
Building culturally relevant brand identities
While patriotism runs high across many countries in the region, it hasn’t always influenced buying behaviour. “There is a national pride and that didn’t necessarily cascade all the way into product,” says Alice Fourquet, head of curation for Chalhoub’s beauty division.
I want to consume brands that get me, that speak my language, that have references to my Arabic culture.
Fourquet, who was previously involved in the launch of Huda Beauty, says “this has [recently] shifted because the quality of national brands has elevated [and because] consumers are more ready to [buy] brands that are local. It becomes really cool [and] a matter of identity [for them to say]… I want to consume brands that get me, that speak my language, that have references to my Arabic culture.”
The movement undoubtedly took root with the launch of Huda Beauty in 2013, kickstarting the stratospheric growth of a Dubai-born brand that was valued in 2017 by Forbes at over $1.2 billion. Now, a flurry of influencers, makeup artists and beauty entrepreneurs are keen to emulate the success of Arab-American founder Huda Kattan.
“Huda is the benchmark in the makeup artist or influencer industry,” says Salem Kaissi, VP of multi-brand beauty retailer Faces, which operates 66 physical stores across Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Bahrain, Egypt and Jordan in addition to five nationally localised e-commerce sites and franchise stores in Lebanon and Morocco. In spite of the pandemic, the business has eight physical store openings planned for 2021 and — with e-commerce growing at triple digits compared to 2019 — Faces aims to make online account for 15 percent of total revenue in the next three years.
While beauty influencers are key to driving sales at Faces, Kaissi cautions that recent entrants have a long way to go to emulate Huda’s success or that of celebrity beauty moguls Rihanna and Kylie Jenner. “Consumers are adopting these products but you need someone as strong as Huda, as strong as Rihanna, to be able to establish a very solid business model. It’s not a me-too option to see if it will gain traction, you need to have a very strong ecosystem behind the brand to drive the innovation of the brand,” he adds.
UAE-raised Jordanian fine artist Mohammed Hindash pivoted into makeup artistry and photography after being courted by brands and several prominent sheikhas in the Gulf. Following tie-ups with the likes of Make Up Forever and MAC on packaging and product collaborations and a co-created eyeliner with Middle East beauty retailer Faces (which at the time was branded as Woojoo), Hindash has spent the last two years developing his own brand Hindash Cosmetics, which debuted in March.
“My focus is to create one-product drops instead of a big collection that can be overwhelming,” Hindash says. “The market is saturated and people have a lot thrown at them all the time [so] the strategy is to work on a hero product and have that product be an essential in our routine.” The makeup artist, whose customer base extends to the US and Europe and targets men and women, is targeting sales of $8 to $11 million in the first year.
Another new entrant into the market is Noha Nabil, a Kuwaiti influencer with 9 million followers on Instagram whose namesake colour cosmetics collection launched in January 2021. Initially targeting consumers in the region rather than a global audience, Nabil is banking on her proximity to a Middle Eastern audience to answer local needs.
“Beauty routines are different in every part of the world. Consumers have become real beauty experts, so brands need to localise even more; this is challenging and complex for global brands to pursue,” Nabil says. The brand recently staged a pop-up presence in Dubai’s Mirdif City Centre Mall, which it intends to roll out across Gulf Cooperation Council markets (GCC), prioritising cities in Saudi Arabia.
“I firmly believe digital-first brands need physical space; they need to physically express the brand’s universe to provide the consumers with a phygital omnichannel experience. That is really difficult to achieve in a traditional crowded retailer environment; this is why we have built our business to be a direct-to-consumer business both online and offline,” says Nabil.
Is it wise to invest in potential competitors?
While influencer beauty brands are big business globally, they have added resonance in the Middle East. “The social community is so strong, so vibrant and engages at a much higher level than anywhere else in the world,” says MAC’s James Aquilina, international and global commercial senior vice president and general manager, of the region’s social adoption. “You have larger followings in a place like China but the level of engagement in the Middle East is so high.”
The brand launched its MAC Makers programme in 2017, harnessing an international network of influencers, and has since partnered with eight talents across the Arab world to co-create limited edition products and packaging. The MAC Makers 2020 campaign featuring lipsticks created by Jordanian make-up artist Hindash, Kuwaiti influencer Farah Al-Hady, Lebanese model Nour Arida, Kuwaiti content creator Lujain Al-Dhafery, Iraqi blogger Dima Al-Sheikhly and Lebanese YouTuber Maya Ahmad, generated one of the highest rates of influencer coverage received in a MAC Campaign regionally.
MAC groups Middle Eastern cities like Dubai with trend centres such as New York, Los Angeles and Shanghai, as a driver for beauty innovation, notably in the eye and brow categories. “We see this region as an innovation hub for the broader global beauty community…for new categories that we see growing very fast, of how we can move trends from the Middle East to much more diverse markets like the US or UK or even to India or North Asia.”
We see this less from a threat perspective [but] it’s elevated what it is to be a competitor. We take it very seriously.
While MAC’s regional ties to celebrities such as Nadine Njeim, Yasmine Sabri and Cyrine Abdelnour and its crew of regional artists, social influencers and content creators are invaluable for bringing regional relevance to the brand, are MAC — and others like it — simply accelerating the rise of future competitors to its business?
“[Makeup] artist and influencer brands are a huge force in the industry and driving tremendous innovation, and have… raised an incredible amount of funding,” says Aquilina, “We see this less from a threat perspective and more of an inspiration. It’s elevated what it is to be a competitor. We take it very seriously. At the same time we see an evolution of how we work with talent as part of our mission statement.”
Despite Aquilina’s framing of the situation, the success of Huda Beauty must give brand executives pause for thought. Yet for those influencer partners of global brands who don’t go on to launch their own brand, the relationship is indeed symbiotic.
“The brands absolutely need them. Without them it would be very, very difficult,” says Faces’ Salem Kaissi. In Saudi, which accounts for around 80 percent of Faces’ business, even social media stars wearing the niqab face veil such as Amy Roko and Nora Bo Awadh “have a very strong, engaged fanbase” despite their relative anonymity in their own social feeds or videos. Nora Bo Awadh launched her own line of cosmetics and brushes in 2016.
It is likely that more influencers, makeup artists and creators will attempt to launch their own beauty lines, begging the question of how global beauty conglomerates like L’Oréal, Unilever and P&G and other potential investors should engage with them to reap some of the potential rewards — or at least stem some of the losses they may later face when some become serious competitors.
So far, apart from TSG Consumer Partners’ minority stake in Huda Beauty in 2017, most brands in the region have been self-financed, including both Hindash and Nabil. How Kattan’s $10 million early-stage female-focused investment fund Huda Beauty Angels intends to play in this space is still not clear; Huda Beauty did not respond to a request for comment.
De L’Arta, which was founded in 2019 and came to market this year, received seed funding from Catalyst, a partnership between energy conglomerates Masdar and BP, a technology start-up accelerator focused on sustainability and clean technology. The company expects to enter Series A funding in the coming months. In the more immediate term, Chalhoub’s Beauty Makers, which was behind the launch of Kuwaiti influencer Fouz Al Fahad’s By Fouz brand, is looking to invest in the brands that show promise within its incubator programme.
Whatever the investor profile, the risks are not insignificant even for the retailers considering whether to stock them. “The industry will see more growth in this category but we as retailers approach it with a bit of caution because we know that not every product or makeup artist or influencer will make it regardless of how big he or she might be,” cautions Kaissi of Faces, which sells the Nora Bo Awadh brand in Saudi and welcomed Bex Beauty by singer Balqees Fathi to its regional portfolio when the brand launched in October 2020.
There’s certainly a lot of potential growth to capture. The beauty and personal care market in the wider Middle East and Africa macro region is estimated to be worth $33.2 billion according to Euromonitor International, which predicts the region to grow between 3 and 4 percent annually, reaching $37.2 billion in 2024. In the MENA region specifically, Saudi Arabia and the UAE command the highest share of revenues at $5.4 and $2.2 billion respectively, with the former already surpassing pre-pandemic levels and the latter expected to return to growth by 2022.
Cornering a niche that’s likely to pay off
Brands slated for success, Fourquet says, will respond to the specific needs of their audiences. Typically, consumers in the Middle East demand high coverage, deep intensity of pigment and products that are long-lasting and non-oxidating in humid weather. Targeted offerings such as Shade M, a range of halal lipsticks which taps female Arab artists for its packaging, Bahraini skin care brand Green Bar and CTZN, a colour cosmetics line targeting local skin tones, founded by three US-born sisters with Pakistani heritage who were raised in the UAE, are gaining traction regionally and beyond.
“There are still opportunities for makeup artists who want to nail a particular segment and really own it. We have consumers that are eventually not that loyal; they will be always looking for the next big thing. [But] if you have a [unique] value proposition… and you do it well and seriously, there is definitely a market,” says Fourquet. As the region’s biggest consumer market, Saudi Arabia, opens up and more women enter the workforce across the region, demand for locally relevant brands will heighten further, she adds.
There are still opportunities for makeup artists who want to nail a particular segment and really own it.
It’s important to remember that the Middle Eastern beauty market isn’t restricted to the geographical confines of the region. Just as Huda Kattan’s aesthetic chimed with that of the Kardashians’ and fuelled the explosive growth of the brand, so too are evolving Middle Eastern beauty ideals finding greater global reach and relevance. “With the Middle Eastern look shifting… it gains a bit more resonance with looks trending in other places in the world. In Europe, in America, Latin America, India there are a lot of opportunities for connection with brands from our region,” says Fourquet.
Faces’ Kaissi believes that the next wave of influencer brand launches will focus on skincare, which was already an under-served category in the region pre-pandemic. Noha Nabil agrees. “[Middle Eastern] consumers will want more and more products with care benefits. Products that are ‘clean’ and free of chemicals as much as possible, while still delivering expected results,” she says.
Just as Huda Kattan has made the cosmetics-to-skin care pivot with the January 2020 launch of Wishful, a generation of eager entrepreneurs is surely not far behind. “We are a region that has a real depth when it comes to the culture of makeup and beauty overall. We are also a very entrepreneurial region [and] people are a lot more daring,” says Fourquet.
“The broader Middle East community is incredibly resilient,” agrees MAC’s Aquilina. In Dubai, the retail hub of the region, stores have been trading without interruption since re-opening post-lockdown at the end of April 2020. “Coming out of the pandemic, we see lots of business bright spots within the region.”
Editor’s Note: A previous version of this article cited Matriskin as part of Chalhoub’s Beauty Makers incubator. That is incorrect.