Low volume bases in most beauty and personal care categories result in high growth potential
Iran’s key beauty and personal care categories remain at an incipient stage of development and consumer awareness of many different beauty and care products remains very low. This is the main reason for the high growth potential which remains in beauty and personal care in Iran. Categories such as skin care, sun care, deodorants, depilatories and men’s grooming are the categories with the lowest volume and value bases. Meanwhile, beauty and personal care remains one of the most profitable fmcg industries for Iranian importers. Greater knowledge and higher awareness of these products among Iranian consumers led to considerable growth towards the end of the review period, among the highest growth in the beauty and personal care industry of any country in the middle east north Africa region. At the same time, average unit prices continued to rise towards the end of the review period as a consequence of high inflation and this contributed considerably to current value growth in 2012.
Significant decline in purchasing power has a very negative effect on growth
The Iranian economy continued to suffer from several major issues during 2012. International sanctions were tightened, targeting the country’s vital oil industry and this accelerated the ongoing devaluation of the Iranian rial. The exchange value of the rial declined by more than 70% in just one year, which tripled the unit prices charged for the majority of imported products and brands. Consumers with fixed incomes were suddenly faced with not being able to pay for imported brands anymore, which left them no choice but to sue domestic products, which are now much more affordable. This had a very negative effect on value growth across all beauty and personal care categories in 2012.
Multinational companies face numerous difficulties due to adverse political situation
International sanctions in response to Iran’s research into the development of nuclear reactors and the unexpected hostility of the new Iranian government to multinational companies are becoming serious threats to the activities of the country’s major beauty and personal care suppliers, especially the importers of key brands. One other very important problem is new restrictions on the transfer of foreign currency into Iranian bank accounts, which is stemming from the placing of sanctions on certain Iranian banks. Widespread smuggling and the rising popularity of fake and counterfeit products also represent a threat to the activities of Iran’s best-known multinational beauty and personal care brands during 2012.
Further expansion of supermarkets and hypermarkets plays a key role in the growth of beauty and personal care in Iran
During the review period, supermarkets and hypermarkets became the leading distribution channels for the sale of products in many different categories and fmcg industries, notably packaged food and beauty and personal care, among several other industries. This shift away from traditional grocery retailing channels towards modern grocery retailing represents an important step for Iran’s supermarkets and boosted the performance of beauty and personal care in Iran towards the end of the review period. Due to the expansion of supermarkets and hypermarkets, retail shelves have became an excellent showcase for products in terms of visibility and availability as new products can be introduced to end consumers without the huge cost involved with media advertising.
Further Growth in future is totally dependent on political situation of the country
Growth in beauty and personal care during the forecast period is set to remain entirely dependent on Iran’s political situation as well as the general state of the country’s economy. If International sanctions continue to tighten, many multinational companies can be expected to withdraw from Iran and consumers will be forced to switch to the basic offerings of domestic brands. Consumer purchasing power, meanwhile, is set to come under immense pressure because of the country’s high inflation rate. As inflation in the country is expected to increase at a very rapid rate, a significant proportion of Iran’s middle-income consumers are unlikely to be able to spend money on sophisticated and expensive beauty and personal care items. However, in case of any agreement being struck between Iran and the countries which are behind the international sanctions in response to Iran’s nuclear ambitions, a completely different and much more favourable situation would likely emerge.
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The Beauty and Personal Care in Iran market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volumes and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
- What is the market size of Beauty and Personal Care in Iran?
- What are the major brands in Iran?
- How are sales of mass versus premium beauty products evolving?
- What are the key shifts in retail channel distribution?
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This industry report originates from Passport, our Beauty and Personal Care market research database.