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As competition in beauty retailing in the Middle East intensifies with the development of new malls and the imminent arrival of international heavyweights like Singapore’s Robinsons or Macy’s from the US, perfumery players Sephora and Wojooh are moving to solidify their places in the market.
Owned by French luxury conglomerate LVMH, Sephora first entered the Middle East some 10 years ago (through a joint venture with the region’s key luxury and beauty retail and distribution company Chalhoub Group) with ambitious plans to open up to 100 outlets in the region.
Today, the chain operates 48 stores in five markets, including 17 stores in the UAE and 21 in Saudi Arabia, and has a presence in Qatar, Bahrain and Kuwait. The chain commands a 17% market share in the GCC and has reported double-digit growth every year for the past three years. Industry sources say that growth in the region’s beauty market last year was largely driven by Sephora and the strong performance of make-up. The chain is also reported to be eyeing an entry into Iran this year, and is in advanced talks with a local partner to open up to seven doors in the region’s second largest market, according to Reuters.
“Like Starbucks, you’ll find one (Wojooh) in every mall, on every corner” – Saudi Beauty Blog
The market’s other key perfumery chain, local player Wojooh (formerly Faces), operated by Chalhoub Group, has developed a strong presence in Saudi Arabia, the region’s largest market, where it has some 44 stores out of a total 80 in nine markets. In contrast to Sephora, it operates just 11 stores in the UAE, nine in Egypt, seven in Kuwait, with the rest scattered across Qatar, Jordan, Lebanon, Bahrain and Iraq. It too plans to enter Iran through a franchise agreement this year. Traditionally anchored in the fragrance category, the retailer has seen success with the 2014 launch of its private-label make-up line Wow by Wojooh, which is made in Europe but specifically developed with Middle East consumers in mind.
The Lure of New Brands
Observers say Sephora, with its focus on make-up and exclusive brands, is set to increase its market share in the region. The retailer is expected to focus on expanding its private-label brand but is also more likely than Wojooh to take on niche, exclusive and new brands. It has recently added Huda Beauty, the new brand from Middle East social media sensation Huda Kattan to its offer. However, not every brand makes it in Sephora here as in other markets – as one insider notes “you have to do the numbers in Sephora to warrant being in the store”. The chain is also well placed to capitalize on the healthly appetite in the Middle East for connected beauty trends, with its strong offering of digital features such as Skin IQ and Lip IQ, and skin diagnosis capability from local brand Shiffa.
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Sephora may focus on the latest new brands and innovative digital features, but Wojooh’s advantage lies in being locally grown. Saudi Beauty Blog describes the retailer as “like Starbucks, you’ll find one in every mall, on every corner” and raves about the quality of Wow by Wojooh products with their claims to ‘beat the heat’ and ‘stay matte’. A comparison of the two retailers’ rewards programs also reveals a local advantage, according to Saudi Beauty Blog: Wojooh staff are able to tell customers at point of sale how many points have been accrued, but Sephora Middle East loyalty customers have to go online to check points, unlike at Sephora stores internationally.