Retail

Gaza boycotts fuel sales spike for Gulf beauty brands

August 30, 2024, 9:35 AM

Beautyworld Middle East said there had been an 8.4% increase in participation from UAE and GCC brands for this year’s Dubai event

L’Oreal blames downturn on boycotts
Rise in sales for local brands
‘Huge shift’ in consumer behaviour

Homegrown beauty brands in the Middle East are benefiting from boycotts of international companies as a result of the Israel-Gaza conflict.

The cosmetics giant L’Oreal said the boycotts had a two-percentage-point drag on its growth in the first half of the year, as consumers turned their backs on the Paris-based company which also owns the Maybelline and Lancome brands.

AGBI repeatedly reached out to L’Oreal Middle East for comment.

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At the same time, local brands from the region are experiencing a lift in sales.

Subha Rajesh, founder and CEO of the UAE-based Magically Holistic, said there had been a 23 percent increase in sales in the past two quarters.

“We definitely see an upturn in consumers looking for both ethical and locally created brands and products,” she said.

Xenab Tahreem Riaz, founder and CEO of the Dubai-based Peach Consulting, which has worked with the beauty brands Sephora, LVMH and L’Oreal, said she had seen a huge shift in consumer behaviour, specifically in beauty, fashion and lifestyle brands.

“A lot of high spenders are shifting towards local brands with no ties to either big conglomerates or distributors,” she said.

Consumers have been encouraged by an online campaign to boycott international brands with any links to Israel.

Mona Gulaid, co-founder of Dubai brand Black Flamingo Beauty (now based in the UK), said: “It’s clear that people are becoming more thoughtful about their purchasing choices, and there’s been a noticeable trend towards supporting local, homegrown brands over international ones.”

Data from a YouGov survey showed that two thirds of UAE and Saudi consumers claim they have boycotted a brand, either temporarily or permanently. Two in five had snubbed beauty, hygiene and personal care brands.

Ravi Ramchandni, show manager at Beautyworld Middle East, said there had been an 8.4 percent increase in participation from UAE and GCC brands for this year’s event, which is set to run in Dubai from October 28-30.

“It is clear that global interest in the Middle East beauty industry is certainly growing,” he said.

Boycotts have hit the food and beverage industry particularly hard. Americana Restaurants, owned by Saudi Arabia’s Public Investment Fund and the Dubai businessman Mohamed Alabbar, revealed its second quarter profits for 2024 were down 40 percent year on year, despite adding 81 new restaurants to its portfolio this year.

Kuwait’s Alshaya Group, which operates Starbucks stores across the Gulf and broader Middle East region, announced job cuts in March caused by challenging trading conditions.

Starbucks has faced boycott threats over its perceived pro-Israel stance, a claim it denies, since the war began in October last year.