Strong demand from the young generation continues to drive sales
Awareness of beauty and personal care products among the young Iranian population continued to grow as a result of better availability of these products and advertising campaigns by key suppliers. A trend away from simple products to more sophisticated items with more features was also observed, which contributed to value growth. Consumers switching from bar soap to liquid soap and double edge blades to systems were examples of how greater awareness resulted in higher value sales over the review period.
The chaotic situation of the Iranian economy, especially the high rate of inflation, is a major threat to volume growth
The Iranian economy was complex in 2013. The elimination of subsidies on key products, such as electricity and fuel, and their replacement with direct payments to individuals resulted in hyperinflation which caused the unit prices of many beauty and personal care products to surge. Price increases of more than 30% were common in many categories, which limited the purchasing power of a large number of consumers. Another major threat in 2013 was international sanctions due to the country’s nuclear ambitions, which caused many issues for multinational suppliers. Transferring money to and from Iran is difficult due to sanctions on Iranian banks and insurance for ships carrying products to the country became a significant problem.
While domestic brands lead in toiletries, such as bath and shower, multinationals are more active in beauty categories, such as skin care
Domestic suppliers, such as Paxan and Pakshoo, were more active in basic products, including bar soap and shampoos, while multinationals preferred to expand their presence in more modern categories, such as skin care, where competition from cheap domestic brands was less severe and potential for growth was more obvious. However, some multinationals, including Unilever, tried to establish their own factories in Iran to produce multinational brands, such as Lux, inside the country, which will mean more affordable unit prices and an ability to compete with less expensive domestic brands, even in basic categories, such as bar soap.
Sales of beauty and personal care products in modern grocery retailers, especially supermarkets and hypermarkets, grows significantly
A trend of rapid growth in supermarkets and hypermarkets was obvious over the review period. The opening of Carrefour’s first branch in Tehran and the rapid expansion of this hypermarket to Shiraz and Isfahan can be regarded as major examples of this. Independent supermarkets also began to grow at a very fast rate which completely changed shopping methods, especially in key urban areas. Shoppers who used to go to small independent grocers or pharmacies and receive personal service from shop owners now had the chance to shop at larger stores and pick products themselves, which meant more opportunity to choose a specific brand.
Forecast period performance is totally dependent on consumer purchasing power
The Iranian economy experienced a very chaotic situation in terms of inflation rates in 2012 and 2013, which seriously damaged consumer purchasing power. Many customers who used to choose products in the higher price ranges had to downgrade to cheaper solutions or even stop purchasing in some of the categories. As the inflation rate is expected to remain high over the forecast period, the decline of purchasing power is likely to continue, which would to negatively affect volume performance, especially in categories with a more luxury nature, such as fragrances and skin care.
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Discover the latest market trends and uncover sources of future market growth for the Beauty and Personal Care industry in Iran with research from Euromonitor's team of in-country analysts.
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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.