Beauty and the online beast: Driving online sales in the Middle East

Beauty and the online beast: Driving online sales in the Middle East
Image courtesy of Shutterstock

Nicolas Bruylants is the co-founder and chief visions officer of UAE-based CNNB Solutions, which helps brands to build, operate and scale direct-to-consumer (D2C) e-commerce operations. 

Long controlled by legacy conglomerates, the beauty industry has turned online. Entrepreneurs rush to greet a new wave of consumers seeking fresh norms and niche products. Once “challenger” brands, digital native beauty brands are now becoming household names — spanning geographies and demographics alike. Why is that? Because in the world of beauty and wellness, a great product no longer cuts it. Brands must now align themselves with consumer values to maintain their market position. 

Regionally, there are extremely high rates of mobile internet usage, which will only become stronger as 5G proliferates. Statista estimates 183 million people in the Middle East and North Africa (Mena) region will have signed up for 5G mobile by 2026. For beauty brands, this represents an opportunity to reach customers where they are spending their time. Research from Bain & Co suggests that online penetration of beauty and personal care in the GCC and Egypt is likely to reach 14 per cent by the end of next year, which is ahead of many global markets like the US or UK. 

While big e-commerce platforms and marketplaces are ideal for fast moving goods where price is king, they are not always well-suited for brands that want to develop close relationships with their customers. Marketplaces provide excellent reach, but it’s difficult to have a meaningful relationship with a customer without interaction, actionable data or the opportunity to guide their experiences. Beauty and wellness brands need to modernise and elevate the customer experience across channels like traditional retail, branded manufacturing, and online marketplaces. But where do brands really control the customer experience? D2C e-commerce!

Let’s take the example of sustainability and how a D2C e-commerce experience provides opportunity for brands. More than one in five customers are willing to pay more for a sustainable product. Sixty-one per cent of all consumers rate a brand’s sustainability efforts as ‘somewhat’ to ‘very important’ when purchasing a beauty/wellness product. Brands that can connect on this level can develop lasting, committed customers.

Optimising digital brand experiences

The recent rise of D2C e-commerce in the Middle East reflects a transformation in the way brands are trying to connect and improve customer experiences. D2C online retail skips out the middleman and forges a connection directly between a business through its ‘brand.com’ website and its customer. It enables a brand to create an experience that mirrors the values and qualities that a customer might have in a brick-and-mortar retail store, offering consistent omnichannel shopping. The ability to control visual presence online and differentiate from rival brands is an important factor. For beauty brands, ensuring a distinction from other similar products is essential, as consumer behaviour research by Ipsos shows a majority of customers (55 per cent) are ‘loyal to the face, body, hair or beauty care items I use.’ This D2C approach of selling directly via brand.com websites is increasingly important for beauty brands in the region, who can use gained insights from centralised customer data to enhance experiences. Understanding how customers are browsing for products, their purchasing patterns, behaviour and product reviews can help optimise sales performance and capture. This data and the opportunity to conduct a two-way dialogue can also be used to cultivate lasting, loyal brand relationships with customers. 

In terms of financing, millennials expressed the highest level of interest in ‘buy now, pay later’ payment options at 36 per cent when shopping online for beauty/wellness products, more than twice as much as those 55 and older (17 per cent).

Another challenge for beauty brands is to try and replicate the in-store experience online. Assistants at beauty counters in retail outlets have a high degree of knowledge and experience, and the ability to ‘try before you buy’ enables a personalised experience that is difficult to reproduce digitally. However, beauty brands have ingeniously developed ways to do this. Virtual make-up try-ons from brands such as L’Oreal, are increasingly popular, allowing customers to upload their own image or use live video functionality to add make-up ‘filters’ that showcase what a particular product might look like. 

Ultimately, the creation of personalised customer experiences through D2C e-commerce helps brands sell more. McKinsey research into online shopping showed that individual customisation is crucial, with 80 per cent of people preferring more personalised retail experiences. The study also discovered that creating a personalised online customer experience can help reduce marketing and sales costs by 10 to 20 per cent, increase customer satisfaction rates by up to 20 per cent and convert 10 to 15 per cent more sales. With such benefits to having a D2C e-commerce model, it’s easy to see why Middle East beauty brands are incorporating this approach as part of their omnichannel strategies.

Younger consumers (18-34) are three times as likely to have shopped regularly from a D2C brand (13 per cent) as those above 55 (3 per cent) –  showing that despite the rapid growth of D2C by branded manufacturers and digitally native brands over the past few years, there is still massive multi-generational opportunity to increase market share.

The influence of influencers

One of the key drivers for online beauty shopping, according to Bain & Co., is the rise of social media influencers who have ‘played a critical role in driving consumer engagement and online sales traction.’ Social stars have commanded the marketing dollars of beauty brands in recent years from simple endorsements to full brand partnerships, and even the establishment of their own ranges and companies. While there is nothing new about people with influence shaping consumer opinion, social media has made famous faces more accessible. 

Huda Beauty, founded in Dubai by make-up artist turned social media influencer/entrepreneur Huda Kattan, has been an important pioneer. The brand has also expanded into China via Tmall Global, the cross-border e-commerce platform owned by the Alibaba Group. When Huda Beauty launched on the platform in 2020, more than 300,000 people are said to have visited the online store on the first day. 

Nearly a quarter of Gen Z (23 per cent) and millennials (24 per cent) would be more confident in making a beauty/wellness purchase online from an influencer, compared to just 5 per cent for those 55 and older. There are new opportunities for the beauty industry to sell more through digital platforms, especially to younger generations. With D2C e-commerce, brands can market and engage customers, interact with sincere brand values and transact with flexible payment options to ensure a holistic and satisfying shopping experience.


Thank you

Please check your email to confirm your subscription.