Physical stores experienced significant drop across the region due to the Covid-19 restrictions and lockdowns; Prestige Beauty bricks-and-mortar has declined by -23% vs LY and High-end Fashion bricks-and-mortar at -13% vs LY.
Driven by consumer shift to ecommerce (being the only solution for beauty and fashion purchases for parts of the year), online channel has experienced significant growth for both segments: Prestige Beauty online increased + 73% vs LY and High-end Fashion online +61% vs LY.
Travel retail channel has suffered the most, impacted by travel bans and lack of tourists in the region. The estimated drop for Prestige beauty is -68% vs 2019.
High end Fashion has experienced strong polarization, with Absolute luxury segment in Fashion experiencing low digits decline and some players in this segment showing growth. While Affordable and Aspirational segments experienced significant drop. In terms of geographic performance, Saudi Arabia market has been resilient last year with flat performance vs 2019 with Riyadh growing +8% (driven by local consumption). UAE has declined at -21% significantly impacted by the lack of tourists in Dubai while Abu Dhabi remained resilient. Kuwait has picked up positive momentum also fueled by local consumption.
Prestige beauty: ecommerce gained significant share in the beauty segment last year, with Omnichannel retailers, Marketplaces and Monobrand Websites showing strong gain in market share. Skincare and Fragrance categories demonstrated impressive growth in the Total Ecommerce prestige beauty market, while Make-up also demonstrated solid growth.
Physicals stores have been impacted the most with a -23% decline in structured retail, however rebounding in the second half of the year demonstrating a decline of only -3%. Beauty standalone and department stores have been gaining share, while Multibrand chains performing below the regional average.
Overall, in the structured omnichannel market, make–up has suffered the most, while Skincare and Fragrances showed resilience. Saudi Arabia and Oman demonstrated strong results, growing double digit last year thanks to the positive impact of local consumption. UAE remained resilient with low digit decline, while Bahrain experienced significant drop due to the lack of tourists.
Outlook 2021
High-end fashion has been experiencing strong re-bound since the beginning of the year, growing in both Brick and Mortar and Online channels vs 2019. The segment is experiencing strong polarization with absolute luxury brands growing double digit, while lower tier luxury brands are declining.
2021 is expected to close with low digit growth vs 2019, driven by absolute luxury segment, continuous growth Online (particularly brand owned websites) and Saudi market.
Prestige beauty is still on recovery path, showing significant growth Online in Q1 2021 vs 2019, while Brick & Mortar remains below 2019 level. Skincare and Fragrance continue driving the growth, while Makeup is suffering remaining at -25% vs Q1 2019. Online pure players together with Omnichannel department stores continue driving the growth, while Specialty beauty channel is still below 2019 levels.
2021 is expected to close flat/low digit decline in Structure Prestige market, with strong continuous growth in Online and slight decline in Brick and Mortar Travel retail is projected to close to -50% vs 2019 this year, impacted by continuous travel restrictions in the first half of 2021, and potential re-bound in Q4 with the re-opening of the international markets and Expo2020 in UAE. Make-up is projected on continuous decline at -16% vs 2019, while Skincare and Fragrances continue gaining share online and in-store.
