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Foreign. Hello and welcome back to the Bare Face Podcast, a beauty business podcast hosted by me. My name is Lily twelve Tree. I'm a beauty analyst, computer science student, and now co founder of Unfiltered, a mobile app that we are developing to be the home of beauty research. So you will eventually be able to filter beyond the marketing noise. But how is everybody? I feel like we are truly in the weeds in the thick of the year and it's just a bit of a, a tricky period, particularly if you're in beauty and in marketing, like winding up towards Black Friday and then the holidays, it's just, it's a bit of a crazy time. So I truly appreciate you spending 445 ish minutes of your downtime, your commute, your walk with me. I am flattered. So in today's episode, we are zooming in on another beauty market because this is, this has become a bit of a series. Two episodes ago we zoomed in on Canada. We've also done two episodes looking at the beauty market in the uk. And now today I wanted to look not at a country, but a region. Historically, when we talk about the regional frontiers of beauty, we refer to Paris, Milan, London, Tokyo. But we're starting to see this new frontier emerge from the east that might be worth taking a glance at or 2. So today what I want to look at, what we're going to dive into is the Gulf Cooperation Council. It's this region known as the gcc and it's a group of six countries in the Middle East. The United Arab Emirates, the UAE, Saudi Arabia, Qatar, Bahrain, Kuwait and Oman. The US's International Trade Administration has flagged the beauty market in the uae, just one of those six countries, as a key growth opportunity. And that was in January of 2024. And I imagine that you've probably overheard some sort of conversations around luxury and Dubai or the UAE in the last decade. So this might not come as a total shock, but there are some fascinating like differences and unique attributes of this region that really worth understanding. The luxury sector in the GCC has a 43% market share of the global luxury market. 43% is wild, especially of course, relative to its pretty small population. And that's because there's this dual force happening here because it's not just the amount of money in the Middle east that is fueling this. Of course, that's a factor which we'll go into, but it's also this idea of luxury tourism which is quite new and really worth having a look at. And then of course, when we zoom in to understand how that trickles down into the beauty landscape. We get another different picture. We know that Dubai and Saudi Arabia are powerful luxury shoppers, but how does that impact prestige beauty or mass beauty? How does that impact their purchasing decisions and behaviors? Specifically, are there market trends that are different here? Like maybe they've adopted K Beauty differently than the West. Spoiler. They have this Yaluranic serum from K Beauty Arabia you can use it for. Or other questions like, are there global brands that have set their eyes on this market? What are they betting on? What does that mean for me? All these types of questions that I want to take a look at today because in a report by the Chalube Group, a company that in just a second I'll explain to you who they are, but they're a bit of a big deal. The Chalube Group stated that in the GCC, the personal luxury market reached us 12.8 billion in 2024. So they grew 6% in the year despite a global decline of the luxury market of 2%. And that is fascinating for several reasons. Firstly, because we know that in the west that there is this massive decline in luxury. The sale of smaller and smaller goods like in beauty, it's body mists and lip balms are trending over the high margin purchases and consumers are spending less and less on brand. The rise of dupes and Korean beauty, alongside the cost of living pressures and tariffs and inflation has meant that price consciousness and highly educated beauty shoppers on the whole are for the most part spending less. Fun fact, there are some categories where we're seeing the average price rise in the favor of more premium products. But I can't reveal too much about that research yet. You'll have to subscribe to Substack for that tidbit to come at a later date. But in very, very short, what we've seen happen in the west is that 10 years ago, millennials were forced out of the housing market, which very ironically left them with more disposable income. So we saw this huge rise in lifestyle brands. But as those cost of living pressures have risen more and more, those lifestyle brands have gotten further and further out of reach again, quite ironically leaving consumers with more money for even smaller goods. Consider little treats. For instance, in Australia, this means the rise of Yochi in New York, Magnolia Bakery in LA, that looks like 30 Air1 smoothies. And then in Dubai, that looks like the really expensive Dubai Chocolate, that viral chocolate bar that I'm sure you've seen a video of someone on some Sort of social media or even Billie Eilish film themselves snapping this bar in half and the crunchy pistachio like oozes out. I didn't nail the sides. Famous Dubai chocolate. Viral Dubai Chocolate. Luxurious Dubai chocolate bar. Absolutely unbelievable. Delicious. All of this to say is that we're seeing an opposite trend happen in the Middle East. That's the fascinating part here because in another Chalube Group report they outlined that although fashion was the largest category of luxury sales in the GCC in 2024, beauty was the fastest growing category at 12% year on year and it was skincare driving the highest growth at 17%. And that again is this first insight of how the beauty market here is in many ways in total oppos position to the West. When I looked at the top 25 highest volume skincare related search terms on Google back in May for a subsack report, 19 of those 25 were experiencing year on year search decline. And that's a trend that I'm sure if you are a skincare user that you felt yourself as a consumer. But that's the crux of what I want to explore today. The crux of this market, why it's worth understanding is because while the west is moving away from luxury beauty, the GCC is moving towards it and it's presenting this really unique opportunity and potential capture for beauty brands. We're starting to see signals from this region that emulate many of the early signs that we saw from, well, not me, I wasn't born yet. But these early signs that we saw from the Chinese beauty boom in the early 2000s that honestly continued up until the early 2010s that changed the beauty industry forever. Just last episode we looked at how that transformed l'. Occitane. They were the company that played that boom perfectly. I have no doubt that we'll be here year in five years telling the story of a brand that played this shift in this market just as right. So I've made notes for you. Of course the summary of today's episode is already up on Substack. But in all seriousness, this is why beauty professionals really need to understand markets outside their own. As we live in this increasingly global economy and the barriers of being an international brand are becoming fewer and fewer by the day. And we'll explore a couple of the ways that that friction is being reduced. But understanding how different areas of the industry are performing in different markets is just, it's a necessity. So today's episode we're going to give you a crash course in Luxury, beauty and the gcc. Why the GCC and not Dubai? I hear you ask Great question. Admittedly, majority of this episode does look at the UAE and Saudi Arabia because of the coverage that's available with the UAE being the largest driver, they do account for 56% of the luxury market. But that other 44% is pretty significant and worth understanding too. So 18% is driven by Saudi Arabia, 13% by Kuwait, 10% by Qatar, 1% Bahrain and 1% Oman. And what I actually think is more interesting is seeing how these different countries work together to boost the area at large. But as always, the episode is going to be broken down into three main parts. Firstly, we're going to get an understanding of where where this crazy growth has come from. How did this all kick off? Before going into part two, where we're going to look at beauty imports and exports into the region over the last 15 years so we can zoom in on a bit of the beauty history specifically. And then in part three, we're going to look at now we're going to look at the consumer, who is she? What makes her different from the Australian, the British, the American beauty shopper. And then finally within part three, we'll look at the local brands that have really dominated internationally to try and get insight into what they they had forecasted to understand where those brands saw the white space for the Middle Eastern consumer. Where did they think that shopper wasn't being served? And can we try and reverse engineer that? If you've been following beauty news recently, you've probably heard about Ulta opening a dozen stores in the Middle east by the end of next year. So by 2026, with their first store in Dubai in the mall of the Emirate, later this year, Ulta Beauty is coming to Dubai. It's bringing over 600 brands from drugstore to luxury and yes, all your TikTok faves. Interesting, given just two episodes ago when we dove into the Canadian beauty market, we spoke about Ulta's plans to open in Canada pre pandemic, but they ultimately pulled out. So this makes the UAE the first country the retailer will actually be launching into. Of course, Ulta have recently acquired space NK in the uk, but this is the first country that will have an Ulta beauty store outside of America. And they're not alone. Other brands like Ilia, Glossier, Cosas, RMS Beauty and Saie are all launching into the UAE later this year and say chose Dubai as its first international location outside the US and according to their CEO Laney Crowley, it was one of the top two most requested regions for the brand to be stocked in from their own audience. And this shocked me. SE isn't like mega huge. It's extremely popular online and super trendy. But I didn't expect the Middle east to have the same beauty trends as the west, because if you know, say it's quite a particular look, it's very minimal. But this snowballed into me wondering how brands even as big as Gucci become as well known in the region in the first place. Because if they're not available there, then surely they weren't marketing to the region. So I guess my question became, how does a brand become so desired in a market that they don't operate in, which is so far away from home and has such a different culture? So let's walk through a bit of a history lesson because frankly, I knew Dubai was rich, but I had no idea why or anything about the region at large before researching for this episode. So I knew that I had to get a deeper context before I looked into beauty specifically. But what I learned was that until 1971, the UAE was a territory known as the Truchall States. The Trucheul states formed in 1809 after the British invaded the coastal Arab tribes that were protecting the region known as the Al Qaseem. The aftermath of this conflict was Britain citing a treaty with the region's sheikhs to abolish piracy. And essentially they just agreed to no longer fight. The reason the British really wanted this land was to safeguard their sea route to India. But later on, they became interested in economic opportunities of the region too, specifically pearls. Then in the 20th century, the pearl industry crumbled after the Japanese invented the cultured pearl. So these emirates, turns out also Emirates just means land. These Emirates became a pretoriate of the British Empire in 1892. But generally they were left alone to govern themselves. And then 60ish years later, in 1958, there was the first commercial oil discovery in Abu Dhabi. A large part of the world's oil supplies comes from the Persian Gulf. And now a sixth and a new name, Abu Dhabi, is being added to the list of oil fields, which was just before Britain decided that it was too costly for them to maintain their military presence. And they announced that they would be withdrawing their forces. Iran was stoked and they took the opportunity to invade and they took control of some nearby islands in the Persian Sea. But the ruler of Abu Dhabi pushed for the Emirates to unify and. And they did. In 1971, the United Arab Emirates was born and it was made up of six, and then later seven emirates. Qatar and Bahrain chose to be their own countries, which surprised a few people. But a decade before that, they had the first commercial discovery of oil. But they hadn't realized how much oil they actually had access to until the UAE was really formed. And it generated massive amounts of income for the gcc, for the region. And they used it to build buildings and facilities, perhaps most significantly Dubai Airport. Because they wanted to be a destination worth traveling to. Because they knew if they wanted to create this dream that some of the royal family had had for the UAE to reshape their nation's destiny, they needed people to come, they needed to be a place worth traveling to or even marvel at. So they spend the next few years building until this guy named Mohammed Al Abbah then gets appointed as the Director General of the Dubai Department of Economic Development. And Muhammad had previously worked in Singapore where they had this week long Singapore festival event. And it had been really successful in driving a surge into the economy. And I feel like once you realize that the UAE was looking to Singapore and they wanted to like become Singapore, the rest makes a lot of sense. So what they decided to do in Dubai in 19966 was instead of this Singaporean sale event, which lasted a week, they wanted to do a month long shopping and entertainment extravaganza. And the first festival began on 16th February 1966. And it took a total of 45 days to construct before they launched the Dubai Shopping Festival. Initially launched with the objective of boosting local businesses here in Dubai. However, since then it has grown to be one of the longest festivals around the world, one of the most internationally acclaimed festivals, and it really helped elevate Dubai's profile as a shopping and a global shopping and tourism destination. When it was launched in 1966, I repeat, 1966, it attracted 1.6 million shoppers who spent US584 million. They went on to continue hosting this event and just over a decade later, in 2009, they had more than 3 million people attend the festival and over $2 billion being earned at the Dubai Shopping Festival in 2009. I want to know what that figure is today. I can't find a more timely statistic, but 2 billion in 2009 would make. Yeah, you can wander up some crazy stats for what 2025 would be, but the early success of the shopping festival was really a double discovery because it was tourism that was the fuel that they needed. But as a city in the desert with little physical attractions, of course they ended up building some, like the Palm, but it was retail that they could use as leverage to essentially build a travel destination out of thin air. DSF has had a very significant role in raising Dubai's reputation as one of the best cities to live, work and visit. If they could get all the big desirable luxury brands to come and congregate in one place, be a place worth traveling to, then that was how they could fuel this new economy, to fuel this new dream they had for the region. And realizing they were onto something, they went on to set up a retail environment. The idea was to make it too good for big global players to say no to, or they should at least have a crack. For tourists they offered tax free shopping and huge infrastructure like the Dubai Mall, the largest mall in the world. And then for brands they offered several free economic trade zones. Remember, we've spoken about this so many times, that's kind of how China had their big boom too. Because they wanted to attract all of these global trade opportunities. The big one was Jebel Ali. Jebel Ali allowed international companies exemption from corporate tax for 50 years. There was no personal income tax, no import or re export duties, and more. This meant that big brands, in essence, they could launch into the new region with barely any resistance or without needing a local partner. So while companies didn't technically need a local partner, this was very clearly a market that operated very differently to the homeland of these big luxury players. Different rules, different regulations, but more significant different customs and a different culture. Even if they weren't trying to target the Middle Eastern nationals, even if they were trying to target these tourists, the way they operated the business of course had to comply. So enter the luxury distributor, a business model I never knew existed. Think of luxury distributors like a beauty licensee. Think of Coty for example. They license the rights to Gucci from Kering to run and operate the beauty part of of the Gucci business. Effectively the same thing happens, but to entire companies that want to expand to new markets, it makes complete sense that you would rather work with a team experienced in a particular customer than build one from scratch. I'd never considered this, just I think it's the idea of passing the operations of your entire company I find hard to understand. I remember feeling quite similarly when I learned how few startups are profitable, because again, I was confused. That isn't the point of building a business to make money. Like isn't the point of growing an international business that you would grow your team and your company internationally? But clearly not because it does make a Lot of sense that these, these partners know the consumer behavior, the regulations, the logistics. They mitigate supplier risk, they cover the losses and sometimes even offer in house marketing. So I get it. I just never considered that it was a thing. There are several of these distributors operating in the Middle east, such as the Alshaya Group. So that's who Ulta have partnered with. But one of the very, very biggest is the Chalube Group. We work with top global brands and we sell the most exclusive and luxurious products that make people more beautiful, elegant and confident. Interesting, because their biggest area of business and interest is actually fashion. So they operate Maison Margiela, Jill Saunder, Versace, Jimmy Choo, Tom Ford, Jacques Moose, Zimmerman Goazis, Karl Lagerfeld, Lacoste, Tory Burch, Carolina Herrera, Fendi and many, many more. But they also, in the beauty side of the world, they operate Charlotte Tilbury, Jo Malone, Bath and Body Works, La Labo Mac, Estee Lauder Companies, Nyx Professional Makeup, Victoria's Secret and many more. Like, it's really crazy how there's kind of these monopolies in this market, but with brands that they didn't create because there's, there's basically four, maybe five if we include Apparel Group, major players here. But the Chalube group controls almost 50% of the cosmetics and perfume market in the Middle East. Patrick Chalhoub, the chairman of the Chalube Group and former CEO, actually just stepped down in January. But he talks about how the group have market control now in 2025. But there was once a time where they were having to go to incredible lengths to convince brands to expand into the GCC. When we came to Dubai in 1990, the market in luxury was still underdeveloped. And because of the situation of the region with the Iraqi invasion, very little appetite from our partners and from the brands. So it has been long discussion with our partners to see how we could accelerate their implementation in Dubai. Open, if not freestanding stores, open corner shopping shop, making sure that we could bring some of those luxury tastes to Dubai. And from my reading, how I believe and understand that they operate is much like a retail where it's based on margins. Like Mac will partner with Chalube. And of all the sales of Mac in that region, the Shalhoubh Group is getting a cut. And where it's really fascinating about the Chalube Group is because it's kind of like a Sephora with their own incubator, Kendo. When they realized that they could have better margins if they both created the product and retailed the product. So Chalube Group have now started their own brands too and they have gone and made the biggest competitor in the region to Sephora, who they also operate. They've gone and made a beauty retailer called Faces. It's the second largest beauty retailer in the whole region, which is fascinating because the retailer doesn't stock their own products. It's not like it's their own vertical. It's their way of not having to split the costs with Sephora, so they get to take their own margin. Anyway, I thought that was fascinating. So now that we armed with this bird's eye view of the region and we have a very, very minimal but ess understanding of where this money comes from and who's. Who's pulling the puppet strings, really, let's understand the last 15 years of beauty, specifically in the regions like who are the early movers and what does the retail landscape look like? If you're unfamiliar with the geography of this region, fear not and allow me to catch you up to speed. So in financial reports or articles, you've likely scrolled past some sort of title or reference to M E N A or mena, short for Middle East North Africa, which is comprised of three main regions, the Levant, North Africa and the Gulf Peninsula. The Gulf Peninsula, or the Arabian Peninsula, is the world's largest peninsula. What is a peninsula? I hear you ask, ever so quietly. It's a piece of land that is almost entirely surrounded by water, but it remains connected to a larger mass. It's essentially an arm of land extending into a body of water. We have one here in South Australia, so you've got Egypt in North Africa that connects up to Israel. And then you have Jordan and Lebanon and then the countries that connect off of them towards the south east, that is the start of the Arabian Peninsula. And then on the Arabian Peninsula, six out of those seven countries make up the gcc, with Yemen being the only exclusion. So if we zoom into the highest spending country in the gcc, the uae, for just a second, we can extract the beauty imports into the UAE by country from 2014 to 2023 from the observatory of Economic Complexity to get a better picture of the beauty history in this region. And we've converted all of this data to a bar chart race, which is really cool. And it gives you a pretty great, like, visual narrative of all these movements. And that's up on Substack, but I'll chat you through the movements, the big ones at least. So in 2013, we start with some pretty familiar faces. France takes out pole position with the US in second place. But really, surprisingly to me, at least, was India in third place, a country that is by no means known for its beauty products. Well, it is, but in a raw material sense. So as a refresher with beauty import data, what we're looking at here is the import code, which is called hs, and that essentially is the import code for actually import and export code when we're looking at specifically finished goods. So this is the imports into the UAE of products that are ready to hit the shelf from the moment that they arrive. So in 2015, India actually moves up to first place, and for a split second, it drops out of the top 10 altogether by 2018. What the hell? So there's very little documentation around what this drop would have been for Indian beauty imports in particular. But that said, we can assume that it's likely caused by India's major economic crisis that hit that year that caused the rupee to crash against the dollar, and it made Indian products much more expensive for foreign buyers. So once the Indian economy recovered, the UAE went back to being India's number one and fastest growing beauty export destination. But in the bar chart race, we never see India return to the top 10, which at first glance it looks like an error, but in reality, it's actually a pretty crazy capture of the pace of growth of beauty in the UAE, because by 2023, the $75 million that India was exporting to the UAE annually wasn't enough to earn a spot in the top 10. India is really interesting one because they have a particularly close relationship with the UAE as they represent the largest expat community in country with 3.3 million Indians living in the UAE and growing at a rate of 10.7% annually. So while that stat is a pretty neat picture of the pace of growth, it's more broadly that India is a really unique case here. And so Indian brands do understandably, really well in the uae. But another notable character, or un notable character in the beauty imports of the UAE is South Korea. South Korea doesn't make it into the top 10 until 2018, which I thought was really interesting because that's a very decent delay after Korean beauty first started gaining traction in the US in 2014. ISH, which of course caused the domino effect of this global interest. So in 2014, South Korean beauty imports sat at just 4.9 million, and in 2023, that number reaches 93.8 million. That's more than a 1,000% growth. So what changed? As we know from the South Korean episode of this very podcast. The growth of K beauty in the US was really intentional by the South Koreans as they were forced to diversify their focus away from China after a geopolitical disagreement in 2016. In 2012, however, the Korus Kor US so Korian US FTA deal kicked into gear which enabled free trade between the US and South Korea Korea causing the South Korean beauty market to be able to focus on growth in the US which again caused this domino effect. But since then, Korean beauty hasn't really gone after another market as intentionally as they did with the states until May of 2024 when the UAE and South Korea signed a deal to remove these really high tariffs that they were both paying to both countries. It was reported to be 90% tariffs, which is just insane. Mostly this was with the intention to help South Korean arms exports, which I had no idea countries bought defense uniforms from other countries because to me that feels like a huge conflict of interest. But anyway, of course it was also with the intention of helping the UAE's oil exports. And the only caveat here is that the CEPA, the SIPA agreement will take 10 years to slowly come into fruition. So it's definitely not a 0 to 100 operation. But the byproduct of this either way is that it's had this flow on effect for Korean beauty because as they become this power player, the markets that they're tapping into intentionally off the back of these like tariff agreements and trade agreements is really interesting because there's been a very definite intention that has been set on growing K beauty in the Middle east because of this lack of Korean beauty that is available there. There have been lots of retailers like Watson's for example, that have reported this increasing demand for K beauty, particularly the trendy ones that we all have heard of or know or love, like Cosrx, Skin1004, Beauty of Joseon and Anua. So if you can't buy K beauty, what are you buying and where are you buying it? Where is all of this beauty buying happening? So Beauty Matter created a report in collaboration with Beauty World Middle east and Beauty World Saudi Arabia to try and catch the Western beauty professionals up to speed with the uniqueness of the culture and the consumer in the Middle East. And one takeaway which I just thought was so interesting was how much in person retail is favored here, which more or less is another break from global consumer trends. So we're definitely seeing the pendulum swing away from E. Comm and back towards in person retail, but it's definitely more of an omnichannel situation in markets like the us, Canada, Australia and the uk, where you kind of have to have a pretty presence everywhere your consumer is, rather than in the Middle east, you can really just focus on in person retail. This is owed a lot to those facilities and infrastructures that we spoke about earlier that the Middle east poured their money into developing in the early 2000s, late 90s, for example, Dubai being a shopping tourism destination with this insane mall culture. The Dubai Mall was meant to be something to make your jaw drop and they very much achieved that. So the Dubai mall had just over 111 million visitors in 2024. So the top three biggest beauty retailers in the UAE by store count is Sephora in first place with 84 doors. Then it's a local retailer called Faces with 70 doors and then Arisha with 70 doors as well. So Sephora is Sephora, the one that we all know. Then Faces is the Middle Eastern answer to Sephora, a local competitor that is owned and operated by the Chalube Group, who also are the distributors of Sephora, which is wild to me. And then are is a high end luxury retailer. So in contrast to Sephora and Faces are is not one for e commerce at all. Omnichannel and all of that is clearly not a focus or of interest to them because their website has only luxury brand listings, no products. And again further highlights this preference for in person retail to the point that they've chosen to skip it altogether. In fact, there was a study done that found that the percentage of people in the UAE that actually shop online is only 63% which is considerably smaller than the UK for example, which is at 89%. So beauty matter seem to have reported a lot on this market, which is really interesting. But they published a report using 2023 Nielsen I FMCG data about how the UAE has taken a lot longer to adopt e commerce, but is getting there. As they estimate the UAE is in transition from less than 10% of transactions happening online, moving up towards around 20%. For comparison, South Korea is predicted to be leading the way, followed by China, where both are considered example of seamless integration of online and offline. And in the US is estimated to be heading there but not there at present. So if you can kind of picture the fact that the UAE and the GCC more broadly are trailing behind these regions in terms of like online adoption, which is interesting given everything else there is so kind of futuristic. But on the absolute flip side of this, when we look at the smaller and niche local retailers Most of them are operating online exclusively because of course the cost of retailing is, is really huge. So interestingly, Middle East, North Africa actually has the smallest amount of volume of E commerce sales globally coming in after Latin America. But there are these smaller online retailers that have found their niches in offering nationals of the region products that the big guys aren't selling. Most notably are noon.com, niceone and nicer Nysa. We pulled together a top line view of each of their web traffic so you can get a clearer picture of how, how they compare to each other in a bit of a graph. That's up on Substack, but that's a model that we've seen particularly in the UK when we did the episode on the UK where we saw Look Fantastic and Beauty Bay in offering kind of different types of consumers, smaller brands that couldn't get retailed in your Sephora's or your Space nks. So it's an interesting model that we're seeing roll out in the Middle east also. But then all of this I think is interesting when we come back to Alter's plan, plan to launch here. Like, how do they picture themselves fitting in into this picture? Also, the big ones at least already operate in the uae. So I wonder how that is going to work. Like are you going to have a situation where brands are stocked everywhere? So as more and more beauty brands want to launch into this market, figuring out what shelf to sit on and how to talk to the consumer I think will become more interesting but also more complicated. So, so let's figure out who this consumer actually is. So who is she? Interestingly, she, the Middle Eastern beauty shopper shops very differently across categories. So in one of the many reports that the Chalube Group have produced, they included this stacked bar graph showing the frequency of consumers visiting different types of purchasing channels across 2023, which of course I will link you on Substack, but I also have no clue how you would actually measure something like that outside of doing a focus group. But anyway, so supermarkets were the most dominant for skincare. Interesting. And then beauty stores were the most popular for makeup and fragrance, although beauty sat around 60% while fragrance was sitting around 30%. Because beauty shoppers in the GCC love their fragrance. So 49% of sales of prestige beauty in the GCC was driven from fragrance, with makeup at 37% and skincare at 14%. And while skincare had the most growth at 17% year on year, fragrance being number one, still managed to grow an additional 11% year on year. And also what I think is kind of the kicker about who she is is that she's not just she. With men spending an average of USD 83amonth on fragrance to women's 74 USD, the fact that this beauty shopper is buying skincare at supermarkets I think is the first pointer that we have towards that. She's not that dissimilar because this market didn't have the purchasing power of other markets throughout the years. I think that we've just had a lot less documentation on the Middle East. So it makes her and her purchasing habits feel a lot more foreign than they actually are. In some of the reports I was reading, the Middle Eastern beauty shopper is. She almost sounds alien. Like she's got these completely different preferences and ways of life. And of course there's differences which we'll go into. But I think the first thing I just want to point out is, is like she's buying her skincare from a supermarket. She's not non understandable. She's not out of your grasp of comprehending and understanding and empathizing with. But anyway, within fragrance, the top performing brands across the region were Guerlain, Parfums, De Marly, Louis Vuitton, like my little accent there, Jean Paul Gaultier and Prada also was emerging as a top performing brand. And the fact that all of these brands are so European is really interesting because beyond the obvious that there's like a preference for luxury and luxury was born in France, there is something here that is worth mentioning that the governments in the GCC region realized was happening was this idea of a leakage problem. Because it became really apparent in Covid that local nationals that people that were living in these regions that had all of this like absurd amounts of wealth were either going to the UAE to spend their money if they lived in any of the other countries rather than injecting it into their local economies because. But then people in the UAE were going away to Paris, Milan, London or New York to make their big luxury purchases because there had been such a strong push for promoting tourism for retail. So I guess they promoted their own citizens in a way to travel, to spend as well. Because this is what all the campaigns were about. This is where they were pouring all of their money was this idea of travel and retail. Retail. But it kind of had this adverse effect for people that were local. I found a lot of references to article and people stating that it was a high priority of solving this leakage problem. But I couldn't find much detail as to how they were planning to do that. I imagine it has to do with the loyalty element. Because whenever I watch TikToks from people that frequent, like your Hermes and the Row, for example, they always reference loving their sales associate with, which is bizarre to me. I've only ever personally experienced this once when I accompanied my mother to Cartier to buy a love ring. And the sales associate, this like friendship dynamic, the champagnes, the chocolates, it is a really bizarre experience. And then that real one to one relationship is really nurtured. They give you their card, you can text them. Mom's ring had a scab on it. So she like called her guy up. Because again, of course when you're spending that amount of money, they're able to afford you that luxury experience. And again, everyone's been talking about the return of retail and those experiences mattering more and more as online becomes hazier and we become more skeptical. But I imagine in the case of trying to get locals to spend more money on luxury in the countries that they're from, that that would be the only way that you could really try and foster that relationship and those purchases. Because I imagine having that relationship with the sales associates, it would be mostly beneficial when you are living locally and you are having frequent purchases, allowing that to evolve from an experience to like a relationship. Almost weird, honestly, a bit weird to me. But I get the point. I get the point that they need to nurture you to spend that amount of cash. But I don't understand because the government recognized that this leakage problem was a problem. But how do they fix it? Like how can the government decide that we need to solve this leakage issue and that not be a pressure on the brands themselves? Themselves, like maybe it was just, I don't know, them highlighting the amount of cash that's being left on the table. So you know, your Gucci's and your Louis V's kick into gear about trying to promote that loyalty. But that to me feels like a brand push over a government push. But I thought it was worth footnoting. What I did want to understand though is what does capture this consumer here? So I spent some time looking at the biggest tiktokers in the region and I believe they were all from the region as well because all the content was in Arabic. More just to say that it wasn't a selection of British influences that relocated to Dubai, but of the tiktokers that I did look at, there's a very common thread of this documenting of wealth, particularly in a way that felt Quite Kardashian esque. That's quite flashy and again to me is the antithesis of Aussie culture. So it feels more like Instagram 1.0 where it's like highly polished rather than what I know TikTok as, which is this uncut, carefree. And of course it's not real and it's still selective, but it feels closer to being real than Instagram. But that just wasn't the case for these big Middle Eastern tiktokers, which I thought was interesting. But then beyond this, like I mentioned before, when you try and look at trends here, it gets a bit blurry because firstly you get reports that detail the rich history and cultural relationships with fragrance in the region. And then on the flip side, you see so many big international social media trends present here too, like they're completely opposing claims. Is she. Is she deep rooted in her culture to the point of having a completely different and unique perspective on buying fragrance, or is she buying buzzy TikTok products? Both can be true, of course, and they're likely true, but the commentary on the data that we have available feels quite superficial. So I'm trying to make sure that I don't do that here because something I think I've seen seen a lot of is this commentary around our social media feeds being hyper personalized. They know us better than we know ourselves. But if you scroll through your liked videos, I imagine most of the videos that you have liked have half a million views or more. So really it's closer to AB testing at scale, where you're pulled into the testing vortex of broader industries. Like maybe you're really interested in like the sciency side of TikTok, so you've fallen into that stream. Or maybe you're really interested in learning the artistry of makeup, so you fall into the makeup artistry stream. But beyond that, the content that we consume doesn't seem to be hyper nationalized, even when it is in different languages. The creators themselves are nationalized and local, but the trends that they're jumping in on and are reflecting don't seem to be as much. I'm not sure if I'm articulating myself here, but I think what's really happening is that there seems to be this mob mentality at play where part of the fun of trends is their sheer scale. And seeing thousands of people trying the same product at once can only really happen when it's a global trend. And that dynamic I have my own gripes about because it really homogenizes the beauty landscape when in reality there are these cultural nuances. But my point, more or less again about the Middle east is that the beauty trends here don't seem that different or that foreign. Despite this deep cultural difference, the preferences of the Middle Eastern consumer and the difference in behavior, I think is best reflected in the local brands that have done really, really well, not only in the region, but internationally, because they are the ones that we can at least assume have identified something that wasn't being addressed, that was wasn't speaking to the needs and the preferences of this consumer directly. So they had to create something to fix that. Like, I think that's more or less what always happens when a brand is born, is that you're addressing something that hasn't been addressed yet. So if we zoom into the big brands that have been born out of this area, we can try and reverse engineer their success to better understand this consumer. So the first brand I really want to dive into is this fragrance brand called amouage. So in 1983, at the request of the Sultan of Oman, fragrance brand Homage was established to fulfill the Sultan's desire to bring Oman's luxurious delights and gifts to the world. Basically, they wanted to sell Oman to the world, so they wanted to bottle it more or less very similar to the way that LVMH sells France and this world of European luxury. With Oman long being an exporter of Frankenstein, Frankincense and myrrh. The fragrances that Homage have developed have been described in a myriad of terms, but particularly I found references online to grand, intense, overwhelming, sultry and intoxicating by niche fragrance redditors. So at the center of this brand's more recent popularity, particularly in the gcc, is one one Christopher Chong. Untrained in chemistry and coming from an academics, arts and fashion background, Chong was unlikely candidate when he was hired by homage in 2004 as creative director. He produced almost 50 fragrances during his 15 years there, some of which now are classics for the brand. And the fragrances are sold in 66 countries around the world, with Amman being their biggest market in 2022. So they reported an annual growth of 24%, which is driven by their strongest performing markets, which are oman in number one, the UAE, United States and China, which altogether account for 40% of their total revenue, which really speaks to how international this brand is. But what's most interesting about this brand and why I really wanted to point them out, is if you look at some of their content and their visuals and the way they build out these fragrance worlds, which of course fragrance brands are known for is this balancing act between legacy and heritage. But then also like modernity again, much the same way as French fashion houses. How they have to balance that they are so old as a way to legitimize their price points. But they also have to adapt to trends and culture enough to be desirable. From fire to form, form, from silence to shape. Each crystal carries the weight of patience, precision and rejection. Nothing leaves the workshop by accident. What survives the heat, the gaze, the verdict becomes more than just an object. It becomes a piece of the ritual. And what I took away from learning about Homage was that the Middle east doesn't seem to be much different. But we can look to another internationally recognised brand born out of the GCC Dubai specifically to see a young, younger perspective. And that is of course Huda Beauty. It's hard to talk about Middle Eastern beauty and not mention Huda Beauty. It's a brand that was born in 2010, one of the first influencer brands ever. It was born out of Huda Katan's blog and Instagram presence. And what's craziest to me about this brand is that she launched her first product, False Eyelashes, into Sephora in Dubai by 2011. And please tell us about these amazing fabulous lashes that you are launching today. Hey, we're very excited. We did just launch the Huda Beauty Lash collection in Sephora Dubai mall and we really wanted to kind of give women the tools to create like their favorite celebrity look. And one of the things I noticed was really kind of a lack of really natural, beautiful lashes that you can kind of customize and make them look as beautiful as possible. I could talk at extreme lengths about Huda's impact on beauty globally, but her impact on Middle Eastern beauty is particularly fascinating because because the brand is known for high coverage makeup, a look that was very common in Western culture, specifically the US, the UK and Australia in 2016 and 2017. But now for the most part, it's fallen out of favor. While Huda has stayed in that lane, while everyone else is pivoting towards this more minimal look. And through researching about this region, I've now come up with my own theory is that that it's less of a stylistic choice for Middle Eastern women to have this stereotype or trend of opting for a bolder brow or more foundation because it seems to be out of necessity due to these extreme weather conditions. Because it's not just Huda that is sporting this increased coverage. There is also a tie here back to Homage, as they are known for these stronger or even harsher scents. I think this is actually a deeper need for, for longevity again because of the weather condition. And what's funny about Huda Beauty because she's known for high impact pigments and higher coverage, that her products are becoming really trendy again in the West. But what's really interesting about high coverage and high impact pigment brands like Huda Beauty is that if you're into a more minimal look, you can use those high impact products and use them sparingly. So that can trickle down. The same thing can't work up the other way. You can't have a glossier or a satin say that is going to be enjoyed by people that love more full coverage. So really Huda Beauty has a versatility that a lot of other brands don't. And I think it's interesting because in the west we're seeing this idea of expecting more from beauty products. It's something I spoke a lot about in the 500 skincare devices episode, which was like episode 3 ish of this very podcast. But people are increasingly expecting more out of their beauty products. They want their beauty products they use at home to be able to replicate the results of a needle or a knife. As we, we see cosmetic interventions become increasingly normalized, this is most obvious in skincare with like red light LED masks. But we also see it in makeup where we don't just want a lipstick anymore to adjust the color of our lips, we want a lip tint to actually tint our lips. So we're seeing girls that don't like to wear a lot of makeup love Huda Beauty's products because they are so high impact. I guess this is just more a bit of a commentary around the versatility of Huda's products that she creates. Because when you go online and you go on TikTok and see these viral lip stains, everyone from makeup artists to teenage girls were posting about them with this really strong through line of how long it lasts again, that Middle Eastern necessity because of the extremities of weather. But what I think both Amaj and Huda show us actually is like this reflection of how GCC born brands can succeed globally by leaning into their own context and heritage. Because some of these reports I was reading, again, they simplify the trends of this region to such a degree that it makes the Middle east and the Middle Eastern consumer feel like they're on another planet. But largely I think there's these really strong through lines of a unique take on longevity, efficacy and storytelling. Three threads that are becoming increasingly important as beauty just gets more and more noisy and more and more saturated. And that brings brings us to the end of today's episode. If you enjoyed today's episode, please do me a favor and share it with a friend or someone from your work if you want to sound smart. And then pretty please join the Subsack as well. If you head to bareface.subsack.com you can get access to the full breakdown of all the keynotes from today's episode. We pull together a lot of visual references and build out a couple graphs to support the less audible parts of these stories to try and make them as valuable as possible. And on Substack you will get these episodes sent to you when they go live every other Wednesday. And on alternative weeks you'll also get a substack report that breaks down a trend or discussion happening in the beauty industry. And we set out to write several pieces of code to self source data that you can't find anywhere else. And we then deliver all the key takeaways and outline exactly how it impacts you right into your inbox. And if you're confused as to why I'm saying we, it's because it's not just me anymore. We're slowly but surely Bareface is becoming a little power team. Massive shout out to Doer who assisted in researching today's episode and has very much been the reason that these episodes are actually able to hit your ears twice monthly now. Something that I was never able to accomplish on my own. So also a huge thank you to our producer Kelsey for elevating these 40 minutes that we spend together from a boring audio clip to a true audio story. And finally, thank you to Florence who cuts down the several hours of me rambling into a microphone into some something that can actually be finessed. It truly takes a village. So if you'd like to support us by rating the show, that would be appreciated greatly. But other than that, we have another big beauty business deep dive coming to you next time. So I'll see you in two weeks for that one. Have a great week. Bye now.