The Professional Hair Care Market Saudi Arabia 2010

Diagonal Reports, April 2010, Pages: 75

The Saudi Arabian professional haircare market is outperforming the sector, with its impressive growth rates

A still conservative market it is fast becoming more demanding in terms of quality, standards and products

Saudi salons and their clients, restricted by regulations, are highly innovative in their use of client referrals and social networking sites to promote their business or communicate.

The Saudi hair salon market – now worth billions of Riyals - exploded over the last decade with salons registering double digit growth rates annually. Consumer spending benefited from the strong performance of the Saudi Arabian economy which is the largest in the Middle East. Women of all ages are spending more on their personal appearance. Saudi women are entering the workforce in ever larger numbers while, even more crucially, girls are continuing at second-level and going on to third-level education. Salons in Jeddah and Riyadh report that university students and graduates now account for the largest consumer segment, second only to working women.

There is a very strict dress code for women in the kingdom. But, despite, or perhaps because of, those restrictions, women transforming their appearance is driving salon business in Saudi Arabia as it does elsewhere. Stylists note that their clients can change their look with a new and more modern hair color and style up to four times a year. This desire for a new image peaks seasonally (eg, Islamic Eid festivities) or marks life-changing events such as starting college. As in most countries, haircolouring – the most cost and time effective transformation - accounts for just under 50% of salons' revenues.

Unusually for the salon sector, hairsalons in Saudi Arabia actually register as dress making businesses because no women's hair salon category as such exists for licensing purposes. The relatively small number of official salons is, in reality, dwarfed by the many unregistered or hidden salons actually doing business across the country. It can be difficult for women to get to salons - as they cannot drive or travel alone in Saudi Arabia - so many freelance hairdressers and casual stylists fill that market niche.

Different interpretations of the laws governing the taking of photographs or displaying images of women make it more challenging for hair or beauty care services and products to be promoted. Salons cannot have street windows or use images of women as promotional tools to the public. Therefore, mega salons showcase (inside the salon) photos of their foreign staff with their coloured or styled hair as tangible proof of the quality haircare services offered. New media which allows for direct promotion and communication between salons and their clients plays a crucial role in the salon market. Social networking sites – which cover topics such as make up and hair care and other issues – can attract over a million Saudi women. Client referrals are also an effective marketing tool for Saudi Arabian salons.

The Saudi Arabian market is conservative and this is reflected in the relatively restricted range of brands and products used in salons. Stylists maintain that their clients are unwilling to take risks with new products. Brand-wise, it is a two horse race between L'Oreal and Wella. However, launches of new salon brands are doing well so the top brands' dominance of the Saudi Arabian professional channel will be challenged.

Looking ahead, all haircare experts consulted by Diagonal Reports are confident that strong growth will continue in the Saudi market. The number of women in paid employment will increase from its current low of 6% of the workforce. Saudi Arabian women's increased exposure via the internet and media to beauty trends outside of the KSA is making them more sophisticated and demanding as consumers. They now want more than the local fashions and standards.

This new research determines the value of the Saudi Arabian professional haircare market in (SAR) Riyals. It segments salons operating in Saudi Arabia by categories of mega salons, medium, small and the home hairdresser categories. It identifies the companies and brands used in salons. It also determines the value of the main hairsalon service categories of colouring, straightening and styling. The research also explains how salons market to their clients given the restrictions on salons, use of women's images and movements.

Findings are based on in-depth discussions conducted in Arabic with salon experts across Saudi Arabia (including Riyadh, Jeddah, Dammam/Al-Khobar and Abha) during January-March 2010

Key words: Kingdom of Saudi Arabia, hair care, styling, colouring, straightening, perming, repair treatments, beauty, cosmetology, salon, day spa.)

REPORT STRUCTURE

SECTION 1 REPORT SUMMARY AND MARKET OPPORTUNITIES
TABLE 1 Professional hair care market in Saudi Arabia at a glance
Market size and trends
Brands
Market opportunities
Country specific
Data issues
Date published
Currency

SECTION 2 MARKET SIZE AND TRENDS
Introduction / summary
TABLE 2 Salon market size, summary data
TABLE 3 Salon market variations, forecast and historical
Saudi market bucks world trend
Growth drivers
Forecast performance varies by salon segment
Consumer move beyond local to international references
Quality improvements as market matures
Forecast performance by geography
Basis of estimates of salon market size
The hidden hair services market
The casual hair services market

SECTION 3 SALON/SPA SEGMENTATION (REGISTERED, UNREGISTERED, PREMISES-BASED, ABCD SEGMENTS)
Introduction / summary
Salons and dressmakers
TABLE 4 Salon segments ABCD, summary description
TABLE 5 Salon segments, benchmarks (spending)
TABLE 6 Distribution of salon segments in large and small cities
Segment A quantified and qualified
Hairdressing by circles of friends
Segment B quantified and qualified
Segment C quantified and qualified
Segment D quantified and qualified
The casual and parallel market
Total numbers of casuals could be large
Fluidity and seasonal peaks in demand/market size

SECTION 4 SALON/SPA DISTRIBUTION (GEOGRAPHY)
Introduction / summary
TABLE 7 Distribution salons (%) by selected cities
TABLE 8 Registered salon numbers in selected cities
Salon operators and staff, countries of origin
SECTION 5 SALONS AND CORE CONSUMER SEGMENTS
Introduction / summary
TABLE 9 Core consumers ranked by occupational status
Core consumer age
TABLE 10 Women’s monthly income, examples
TABLE 11 Salon consumers ranked by nationality
Salon consumers and non-nationals
SECTION 6 SALONS AND HAIR CARE BRANDS
Introduction / summary
TABLE 12 Salon brands market, data summary
TABLE 13 Number of brands handled in salons
TABLE 14 Market share (%) top brands
Two horse race?
TABLE 15 Brands handled in different salon market segments
Brands after market leaders
TABLE 16 Brands handled in salon sample (colour category)
TABLE 17 Brands handled salon sample (styling category)
TABLE 18 Brands handled salon sample (treatment category)
Possible brand inflation and counterfeits?
Parallel market
TABLE 19 Counterfeits share of salon products market, by salon segments
Conflicting views about use of counterfeits
High estimates of counterfeits products
Low quality products a barrier to development
TABLE 20 Salons’ brand purchasing criteria
Quality and salon quotes
Marketing for consumer recognition - but not everywhere
Big brand combines all with salon support
New entrants - quality vs. marketing?
Interest in brand experimentation?
Leading retail (mass market) brands
Arab retail brands
TABLE 21 Number of brands by product category (approximate)
Salon interest in Halal products
Brand/product demands - Halal
Brand/product demands - natural
TABLE 22 Brands handled by distribution groups
Distributor or beauty supplier profiles (3)

SECTION 7 SALON/SPA PRODUCTS MARKET BY CATEGORY
Introduction / summary
TABLE 23 Hair salon products market - summary Saudi Arabia
TABLE 24 Product purchases as % salon revenues, by segment
Large salons’ product purchases
Benchmarks other countries
TABLE 25 Salon revenues (%) from services and product retail
TABLE 26 Distributors’ sales to salons (%) by hair care product category
Limited range of the many product categories are handled
No missing product categories
TABLE 27 Salon product retail categories
Hair extensions
TABLE 28 Supplier sales of beauty products by category

SECTION 8 SALONS’ BUSINESS ACTUALITIES, REVENUES BY SERVICES CATEGORY
Introduction / summary
TABLE 29 Salon services revenues - hair and beauty (%)
Strong demand to change image, frequently
Beauty services increase
TABLE 30 Salon service menus (examples of services provided)
Growth drivers in salons
TABLE 31 Salon services (%) revenues by category
Salon hair colouring - products and services
Salon hair straightening and curling - products and services
Haircuts, hairstyling, and special occasion styles
Special occasions drive styling market
Weddings
Salon hair treatment business, products and services
Hair loss, estimated prevalence
Hair treatments - damage examples and causes
Individual theories

SECTION 9 SALON MARKET - COUNTRY SPECIFIC FACTORS
Introduction / summary
Codes that determine how women reach salons and how salons reach women
Codes and home-based services
Codes and development of mall and mega salons
Social codes create space for new media
Online social media (FaceBook)
Online social networks
Cultural practices and use of visuals in promotions
Effective selling of beauty without infringing codes
Salon marketing - how and where
Clients as salon ambassador
Marketing and business to business
Drivers of salon/beauty market - macro factors
Drivers of salon/beauty market - appearance and the media
Desire to frequently change appearance
Impact – foreign fashions and celebrities
Drivers – female owned and operated salons

SECTION 10 MARKET STRUCTURE, REGULATIONS
Introduction / summary
Salon regulations / requirements for women’s salons
Not salon but dressmaking business (Mashghal)
Salon complaints about regulations
Official policy (Virtue Commission)
Official policy (Saudization of employment)
Salons’ many recruitment problems
Informal education in beauty
Skills could be barrier
Training programmes with government support
Hygiene regulations and concerns

SECTION 11 SALONS/SPAS - NAMES IDENTIFIED (SEGMENTS A & B)
Introduction / summary
TABLE 32 Salons - segment A in Riyadh and Jeddah (names)
TABLE 33 Salons - segment B in Riyadh and Jeddah (names)
TABLE 34 Salons in Dammam, Al Khobar and Makkak ( names)
TABLE 35 Salons in Abha and Hail (names)
Top shopping malls (selected)

SECTION 12 SALON PRICES BY MARKET SEGMENTS
Introduction / summary
Prices, discounts and client loyalty rewards
The never discount salons
Freelance and their prices
TABLE 36 Salon colouring prices in different salon segments (Saudi Arabin Riyals)
TABLE 37 Salon wave and straightening prices by salon segment
TABLE 38 Salon cut and head massage prices by salon segment
TABLE 39 Salon segments, wages
TABLE 40 Prices retail hair products by brand

SECTION 13 SALON/SPA CALENDAR (SEASONALITY, BUSY TIMES, OPENING HOURS)
Introduction / summary
TABLE 41 Salon opening hours and days
Salon at midnight?
TABLE 42 Busiest (and slowest) days and seasons for salons
Quiet times for salons
TABLE 43 Business opening hours and days in Saudi Arabia
TABLE 44 Public holidays in Saudi Arabia

SECTION 14 DATA SOURCES, METHODOLOGY
Introduction / summary
Interviews
Confidentiality
Languages
TABLE 45 Composition of expert sample
Expert sample / criteria for choosing experts
TABLE 46 Experts sampled and cities represented
Breadth of experts’ expertise - geographic
Breadth of experts’ expertise - brands
Data issues relevant to market
Data conflict on beauty market

SECTION 15 GLOSSARY AND ABBREVIATIONS
Abbreviations
Variants spellings
Arab and local terms
Gulf Cooperation Council (GCC)
Moroccan bath described

SECTION 16 MARKET SIZE – WORKSHEETS AND ESTIMATES
TABLE 47 Key cities in the KSA, % of population and salon numbers
TABLE 48 Salons/day spas per population, estimates selected countries
SECTION 17 COUNTRY DATA - SAUDI ARABIA
Introduction / summary
TABLE 49 KSA – population and income
Population, accuracy of data
Population, non-nationals
Population, non nationals – origins, policy
Population, non-national - women
TABLE 50 The top cities by % of the population
TABLE 51 Cities with developed consumer facilities
The top cities for beauty products and services
TABLE 52 Female population, labour, education in the KSA
TABLE 53 Saudi universities and student enrolment (ranked)
Students abroad
Internet access in KSA
KSA value of cosmetics market
Cosmetics market, value of Halal
Beauty retailers names (selected)

INDEX OF COMPANIES, BRANDS, SELECTED PUBLICATIONS, AND ORGANIZATIONS

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