GMR | Apr 2011 by MediaquestCorp.

18 APRIL 2011 - NO 197

SECTOR ANALYSIS REGION’S FRAGRANCES & COSMETICS PROVE RECESSION RESISTANT A MediaquestCorp Publication

Luxury

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GMR Exclusive: Part two of the IAA world chairman and global president’s recent address 42 to the ABG

www.GMR-Online.com APRIL 2011 – Issue No. 197

NEWS

Debut for Arabic Top Chef. ‘Biggest yet’ adidas campaign. Online shopping in the UAE on the up, study reveals. Prime and Toast cultivates a second outlet in Kuwait. Pond’s unveils its “most premium” brand yet, and Clarins debuts a new range. 3M hits the offices with B2B activation. P&G unveils ProGen sustainability initiative in the UAE.

World News

News Plus

Online is the focus for the Dusit 2011 global strategy. Microsoft splits global media to Starcom’s advantage. Online celebrity fans are more likely to follow brands, US study reveals. Tagged from Gulf of Mexico fish to rebuild confidence. Nestlé invests in new Indian plant.

Rising oil and commodity prices could drain short-term sales potential in the homecare category, report finds. Key data from the 2010 ASDA’A Burson-Marsteller Arab Youth Survey on attitudes and trends, including brand preferences.

Q&A

Brad Staples, global development chief of APCO – JiWin’s new owner – calls for greater expertise and transparency in the region’s corporate governance.

Retail View

Connecting brand with consumer is what du’s newest store is all about.

Cover story

As luxury consumers, including über HNWIs, increasingly buy via online or smartphone, we ask if

premium brands are managing to overcome their reservations about digital platforms causing brand-value erosion. The report also looks at clicks-and-mortar retail potential and the role that social media can play in brand engagement and building.

Advertising

Who do you think you’re talking to? “I talk to my uncle or aunt in Egypt, [and] they say that people are volunteering to do everything. Tahrir Square has never looked so clean. Across Cairo people are getting out and doing things. They’ve taken their country back….Whenever someone would ask me, ‘Where are you from?’…I’d say, ‘Fairfax County.’ But a professor walked by my office last week and said, ‘Are you Egyptian?’ And for the first time in my life, I said ‘yes’.” Khalid El-Arini, a doctoral student, Carnegie Mellon. As national pride and confidence blooms in the psychological aftermath of the ‘Arab Revolution,’ do marketers need to change their tone?

Sector Analysis Fragrances & Cosmetics 52 From mass-tige to prestige, the regional fragrance and cosmetics sector appears to have wafted through the economic crisis unscathed. Plus a study by Kaya Skin Clinic and Nielsen into skincare attitudes and usage among women in the UAE and Saudi Arabia – exclusive to GMR. Sekari SEO tracks top searches in the UAE for the category, complemented by a Social Media Sentiment analysis; also includes Parc latest ad stats and analysis, plus Mediastow coverage analysis.

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52 Sector analysis: COSMETICS & FRAGRANCES MediaquestCorp. Dubai Media City Al Thuraya Tower 2, 24th Floor United Arab Emirates Tel: +(971) 4 391 0760 Fax: +(971) 4 390 8737 www.mediaquestcorp.com

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News

Younger consumer behind online shopping surge Airline tickets leading growth in the UAE, but music downloads show sharp drop UAE Online shopping in the UAE is increasing, a study reports. The percentage of respondents in the UAE shopping online increased from 29 per cent in 2009 to 42 per cent in 2010. The fourth MasterCard survey on online shopping shows that consumers aged 25 to 44 years are driving growth, while those aged from 35 to 44 years bought more items, more frequently. Activity increased among women, with 40 per cent shopping online in 2009, compared to 33 per cent in 2010. Categories leading growth are: airline tickets (74 per cent), hotel bookings (66 per cent), home appliances and electronics (32 per cent), clothing and accessories (34 per cent), restaurants/home delivery of food (32 per cent) and supermarkets/superstores (32 per cent).

Teeing off

Finger on the button: More and more consumers are heading online

Convenience shopping, such as dining and supermarket home deliveries, grew to one third from one fifth last year. Spend for cinemas rose to 48 per cent in 2010, from 26 per cent in 2009, and performing arts tickets rose to 61 per cent from 47 per cent. Music downloads, however, fell sharply to 55 per cent from 74 per cent, while online gaming stood at 60 per cent from 74 per cent in 2009.

Some 64 per cent prefer to have a hotline number for enquiries, while 48 per cent said most goods are much cheaper online. However, 45 per cent still feel insecure about shopping online. Turning to mobile shopping, only one in eight bought via their mobile phones in Q1, although 25 per cent are likely to do so during the next six months.

The top three categories bought via mobile are: airline tickets (31 per cent), phone applications/software (24 per cent) and online gaming products/services (18 per cent). Eyad Al-Kourdi, VP and country manager, UAE, MasterCard Worldwide, said: â&#x20AC;&#x153;We are seeing more UAE consumers go online for lifestyle purchases, as well as day-to-day household items.â&#x20AC;? The survey took place from September to October 2010, with 8,500 consumers from 15 markets across APMEA, including the UAE. In separate, but related news, Karen Hargreaves, VP, Brand & Corporate Communications, MasterCard Worldwide, Middle East & Levant, is leaving after 11 years. Hargreaves told GMR she will use her experience in the financial services sector to set up her own specialised marketing consultancy.

For the fourth year running, amateur golfers from the region gathered to participate in the Audi quattro Cup tournament. With national teams competing in Kuwait and Dubai for the first time, both winning national teams will go on to the world final in Mission Hills, Hong Kong, in November. Hosted by Al Nabooda Automobiles and Fouad Alghanim & Sons Automotive, more than 200 golfers competed. With a score of 47 Stableford points, Dubai was represented by Lyndon Dafert and Tyrone Evans. The second team, representing Kuwait, were Bader Al-Turkait and Husni El Azem, (pictured right) with a winning score of 42 Stableford points.

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News

Eco awareness drive launches GCC Procter & Gamble has launched its ‘PRO GEN’ educational campaign across the GCC. The campaign aims to ‘Protect Future Generations’ by raising awareness of the steps individuals can take today to reduce water consumption.

Water worry: Yassin Attas

To mark the launch, the FMCG giant worked with YouGov Siraj on a survey of consumer attitudes toward environmental issues in the UAE. Key findings showed that 25 per cent of parents worry there will not be enough fresh water for their children. Emiratis echo their concern, with 28 per cent worried that limited natural resources will be an issue. The educational aspect includes P&G supporting the INJAZ-UAE’s Community Citizenship Programme for students to learn about good corporate citizenship. Yassin Attas, director of external relations, P&G Gulf, said: “I hope the P&G PRO GEN c a mpa ig n w i l l help turn awareness into action, whether turning off taps while washing up or switching to a more washing powder.”

Arabic Top Chef to launch this month LBC Sat adds to reality portfolio with hit cooking show MENA An Arabic version of reality cooking show and twotime Emmy award winner Top Chef launches exclusively on LBC Sat this month. Launched in 2006 on US cable network Bravo, Top Chef pits professional chefs against each other in various culinary challenges. They are judged by a panel of professional chefs and other figures from the food industry. One or more of the contestants are eliminated in each episode. Arabic Top Chef, owned by Rotana, will feature 17 chefs from across the MENA region, including Saudi Arabia, and is co-hosted by Lebanese chef Joe Barza and publisher and socialite, Siham Tueni. The eventual winner will walk away with a contract from a major hotel or restaurant.

Cultivation

Cutting edge: Arabic Top Chef airs this month for a 13-week run

“We believe that reality and cooking formats are the latest trends and Arabic Top Chef will attract Arab families and housewives,” Rizk Haddad, regional executive director, LBC Sat sales house, Rotana Media Group, told GMR. He added that three sponsors from the food, cooking

appliances and product hygiene sectors have signed up, but could not disclose their names. The weekly show will have one main run, two re-runs, and will last 13 episodes. LBC Sat has a strong track record of adapting international formats that include the popular Star Academy.

Prime and Toast, the restaurant featuring an ‘internal farm,’ has opened a second outlet in its native Kuwait. The restaurant is owned by The Sultan Group. Dubai-based TKI designed the interior and introduced the vertical farming concept to complement the fresh ingredients used in the restaurant’s food. The internal farm is watered by condensation produced from the air-conditioning, and the organic herbs and vegetables grown are used in all recipes. The wood used for the furniture is sourced from sustainable forests in line with the eco-friendly ethos of the restaurant.

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News

Premium skincare ranges launch across region Consumer insight and innovation underpin NPD in skincare category Middle East Unilever’s premium skincare brand has unveiled its most luxurious skin care range to date in the UAE, inviting both media and social media influencers to the launch. “Moving forward, we foresee digital visibility as a vital role within our integrated marketing campaigns and not a challenge,” said Iain Potter, VP of marketing, Unilever. “The Pond’s Gold Radiance product range will be extremely visible within the digital sphere as we are not only targeting our consumer via traditional media. “Our strategy is to reach real women, get them to engage with the product and start an online, continuous conversation.” Pond’s Gold Radiance was created to cater to women’s growing concern for dull skin, Potter explained during the launch. The real gold micro-particles in the range are said to revive “youthful glowing” skin, tackling age spots, wrinkles, excessive pigmentation and dehydrated skin. The collection will be promoted through print and on TV, supplemented by online and social media buzz across the region, as well as through its Pond’s Institute website. It will be one of Unilever’s flagship products for 2011. “As we continue to see solid growth within internet penetration across the region, online interaction is becoming

Going for Gold: New collection will be one of Unilever’s flagship products for 2011

increasingly significant for both luxury brands, as well as FMCG brands. “The next step is to ensure consistency and development of targeted online campaigns that reach out directly to the consumer – luxury or not,” said Potter, when asked about the challenges in extending a premium brand online. “Whether it is through reviews or information posted by the company, consumers will use that information,

which will ideally help increase sales and profit for a brand.” Priced at around $20, it will be available at all major retailers across the UAE. Marketing spend was not disclosed. Unilever generated global sales of $71.2 billion in 2010. Clarins has also debuted its major range, Vital Light, an anti-ageing day-and-night range targeting women aged 40 years and more. The ra nge is ava ilable across the MENA region,

except Egypt, where it will launch later this year. A dual-language print and online marketing campaign supports the launch, complemented by a n instore activation programme. Clarins has harnessed what it describes as the “exceptional revitalising power of Pioneer Plants” to help recapture the luminous firmness of youthful-looking skin despite the years.” A new campaign is slated for Q4.

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It’s business, but not as usual, say Bahrain agencies Agencies battle on despite office closures and curfews with work-at-home ethos

Looking forward: Ziad Zakhem, Tarek Miknas, Jonny khazoum

Bahrain Most agencies in Bahrain managed to maintain a skeleton business throughout the crisis. Despite office closures, some agency heads told GMR their teams continued working on immediate client business from home. MEMAC Ogilvy & Mather W.L.L., Manama, which employees 40 people, was forced to close its office along with its entire business community for two days during the height of the troubles.

Ghassan Boujacli, MD, said those who had laptops continued to work from home to service clients on “urgent matters and especially those who are based outside the kingdom.” Mindshare Bahrain, which employs 11 people, was forced to close twice; initially for a few hours and then for a week. Johnny Khazzoum, MD, reported that the situation was having a huge impact on business, particularly the

cancellation of the F1 opener. “Most of our clients have put their budgets on hold with the exception of telecoms.” Ziad Zakhem, GM, TBWA Bahrain, closed the office for a week, adding that internet and phones had not been working properly. At the time of writing he said the agency was preparing for after the crisis, although a continuation of unrest could force a re-evaluation of scopeof-work for clients.

FP7’s CEO, Tarek Miknas, said: “I feel an awkward mix of pride and guilt when the team in Bahrain call me to talk work, knowing that the friendly island I grew up in was going through internal conflict,” he told GMR. “Times are tough, to say the least, and I cannot think of any business that would not be effected.” On the upside, however, he said briefs were continuing to come through. “On days when people could not come into the office, they would work from home. “Of course, its not business as usual. We did have a couple of hires from abroad that changed their minds about coming. Internet speed is not at full throttle and people working remotely is never ideal for any creative, teamdependent industry.”

du connects the Emirate’s female entrepreneurs UAE du is strengthening its presence in the SME sector through the UAE’s women entrepreneurs. Its latest plan, ‘Her Business Super Plan’ is tailored for business women. Benefits include 400 national minutes, 200 international minutes, a choice between two GB of free national data per month or unlimited BlackBerry, roaming benefits and smart phone bundle. Part of the offering includes a ‘first of its kind’ ‘Her Business Calling Circle’, allowing

Wired: Hala Badri and Nayla Al Khaja

subscribers free calling benefits. Monthly cost is $54. “We understand and value the role of women in the business and corporate world and

recognise the valuable contribution of female entrepreneurs and corporate managers in large enterprises to the UAE’s flourishing business community,’ said Hala Badri, EVP brand and communications, du. Marketing includes a dual language print and online campaigns along with brand ambassadors from among the UAE’s business women: Nayla Al Khaja, the first female film producer/director in the UAE and Founder and CEO

of D-Seven Motion Pictures; Shabana Karim, founder of The Nail Spa and Claire Fenner and Georgie Hearson, Heels & Deals co-founders. “We understand and value the role of women in the business and corporate world and recognise the valuable contribution of female entrepreneurs and corporate managers in large enterprises to the UAE’s flourishing business community,’ said Hala Badri, EVP Brand and Communications, du.

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personal tailoring

News

adidas takes to the field with ‘biggest marketing push’ Social media and TV support brand’s first global umbrella campaign MENA adidas has unveiled its latest global brand campaign – all adidas – and media plans for the MENA region. In what it says is a first for the brand, the company has created a campaign leveraging the adidas Sport Performance, adidas Originals and adidas Sport Style sub-brands. The campaign showcases adidas’ presence across and into different sports, cultures and lifestyles fusing the worlds of sport, music and fashion, said a company press release. Brand ambassadors, from football stars Lionel Messi and David Villa, to NBA star Derrick Rose and pop icon Katy Perry, to the adidas skateboarding team, all feature. The creative concept unites

Teamwork: adidas’ latest campaign fuses sport, music and fashion

all the sub-brands stressing the parent brand’s “credibility,” whether on the court or the catwalk, the stadium or the street.

The campaign is built around the “adidas is all in” hero spot directed by Romain Gavras, featuring the Civilization song by Justice.

There is a 30- and 60second version of the TVC and cinema, as well as an extended two-minute version for online. Viewers and fans can then continue the conversation through social platforms such as its global Facebook page. adidas already engages in excess of 10 million fans of the brand on a regular basis across these platforms. Montreal-based Sid Lee, which was hired as global agency for adidas Originals in 2008, created the campaign. Last year it was named global lead agency for the entire brand. Spend behind the MENA campaign, which is handled by Starcom MediaVest, was not disclosed.

3M sticks with activation for regional B2B campaign

Memo to self: 3M goes direct to the office

Saudi Arabia/Kuwait/UAE This month 3M is taking its Postit and Scotch Raiders campaign directly to its office consumer base in the UAE, Saudi Arabia and Kuwait. The activation focuses on site visits by 3M teams dressed in Post-it notes and Scotch tape to ask the procurement to show any 3M product from their office to receive gift hampers. 3M has also created an invitation-only ‘Privilege Club’. where members can attend social dinners and networking events, and receive complimentary new products.

Members also have the chance to win an airline travel voucher. Runner-ups get gifts such as pocket projectors and specially designed air purifiers. The company is also offering 500 complimentary gift hampers and stationery dispensers through its facebook page.

Erratum In the March issue of GMR we attributed an incorrect designation to Hubert Boulos, head of planning, JWT Dubai. We regret the error and any confusion it may have caused.

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World News

Nestlé increases investment in India India Nestlé has opened a factory in India for the production of sauces, noodles and bouillons, including the Maggi brand. The $79.6 million, 30,000 square-metre factory in Nanjangud, Karnataka, will generate 630 jobs, Nestlé said.

Spoonful: $79.6 million investment

Speaking at the opening last month, CEO Paul Bulcke said: “Our business is growing well in India and we are very optimistic about the country’s growth opportunities over the coming years. “As is true of all of our worldwide operations, we are committed to Creating Shared Value in India, both for shareholders and local communities.” He cited the recently launched ‘Nestlé Healthy Kids Global Programme – Saanjhapan’ as an example. The Saanjhapan scheme in Karnataka, India, forms part of the Nestlé Healthy Kids worldwide initiative to raise the nutrition, health and wellness awareness of school children globally.

Pepsi Co signs government health drive Salt and sugar reductions underline health commitment UK PepsiCo UK & Ireland, the maker of Quaker oats, Tropicana, Copella, Pepsi and Walkers crisps, has signed up to the UK Government’s Public Health Responsibility Deal. The drive specifically focuses on salt reduction, the removal of transfats from products and workplace health. In line with this, Walkers has reduced saturated fat in its crisps by 70 to 80 per cent, and salt by 25 to 55 per cent. The reformulation forms part of PepsiCo UK’s broader ambition – set out in a health report published last year – for its future profit and growth

New formula: Reformulation forms part of Pepsi Co’s wider health initiatives

to be driven by healthier products, read a company statement. Richard Evans, president of PepsiCo UK & Ireland, said: The health goals are integral

to the global Promise of PepsiCo: a commitment to deliver sustainable growth by investing in a healthier future for people and the planet.

Audi Group posts record 2010 results Germany The Audi Group ended the 2010 fiscal year with record sales. Deliveries of Audi brand automobiles on worldwide markets rose last year by 15 per cent to 1,092,411. Revenue rose to $49,916 million, up 18.8 per cent. Operating profit rose by 108.2 per cent to $4,704 million, while operating return on sales increased by 9.4 per cent. The successful performance was due to product launches: the new models included the flagship A8, A7 Sportback and the Audi A1 – the first Audi premium car in the subcompact segment. In its native Germany, deliveries of cars rose slightly to 229,157, up 0.1 percent.

Overtaking: Audi expects to deliver 1.2 million cars in 2011

In western Europe (including Germany) Audi outpaced the overall market with 611,905 deliveries, up four per cent). In the UK, its secondlargest market in the region behind Germany, deliveries rose to 99,705 cars (up 10.2 per cent. Deliveries in France climbed to 52,520, up 9.4

percent, and in Italy, Audi sold 60,337 cars, up 5.5 per cent. With 227,938 deliveries, up 43.4 per cent, the brand remained leaders in the premium segment in China (including Hong Kong). The company expects to deliver 1.2 million cars in 2011.

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News Plus

crisis draining Homecare sales Multinationals are likely to cap short-term investment, says report.

Tight squeeze: Unrest in the region is likely to effect sales and prices in the region’s homecare sector

The deepening unrest across the region, particularly in Bahrain and Libya, has thrown the homecare category into a short-term crisis, a new study reports. According to Euromonitor International, regional turmoil is likely to apply downward pressure on sales and prices, in line with the hike in oil prices. Multinationals, added the report, are likely to rein in investment for much of the Middle East during the short to medium term. Although the Middle East and Africa accounted for around 6.3 per cent of global homecare in value sales in 2010, predominantly youth populations and strong macroeconomic fundamentals made the region an attractive target for NPD. Saudi Arabia, the UAE and Algeria were among the fastest-growing home

care markets in the world in 2009 and 2010, albeit from comparatively low bases. Pre-crisis, forecasts had indicated Algeria’s homecare market would outpace China’s during the next five years. “The Middle East has seen steady growth in recent years, triggered by the rising westernisation trend, where products that were not in high demand traditionally, such as paper tableware and wipes, are becoming more popular,” says Sana Toukan, research manager, Euromonitor. “Also, many of the big companies, whose manufacturing facilities are located in countries affected by the unrest, such as Egypt, are now thinking of shifting their factories and offices to more stable countries within the region, such as the UAE, and even Saudi Arabia.”

This, she added, could disrupt manufacturing and push prices up, adversely affecting demand, especially for niche, newly developed products, such as wipes and some laundry care products. The report cites Latin America as the most likely benefactor of the crisis. Multinational oil companies, for example, may decide to turn to countries such as Brazil, Mexico, Venezuela and Colombia. In 2010, Latin America’s total homecare sales were almost one-and-a-half times bigger than the Middle East’s, fuelled, in part, by the trillion-dollar economies of Brazil and Mexico. The gap is now likely to widen, as firstand second-tier Latin American markets are comparatively safe opportunities for new investment, the report reveals. In the long term, however, the unrest in the Middle East could ultimately prove beneficial for homecare and FMCG in general. “The region’s largely youthful population is driving the path to change,” says Euromonitor. In Egypt, for example, 33 per cent of the population – totalling 78 million – is under 15 years, compared with 17 per cent in western Europe, or 20 per cent in North America. “These young people comprise the next generation of decision-makers in the Middle East, but their outlook of the world is far less blinkered than that of their parents,” says a Euromonitor spokesperson. “The internet has steered a growing interest in western culture. As the dust starts to settle and new governments form, there is likely to be a significant opening of Middle Eastern consumer goods markets, with people demanding greater choice and increased penetration of modern retail channels.” n

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©Getty/Gallo Images

News Plus

Vote now

Timely survey finds democracy tops Arab youth concerns for second year.

The single greatest priority for young people is to live in a democratic country, according to the 2010 ASDA’A BursonMarsteller Arab Youth Survey. Democracy also came top in the 2009 survey. This is the key finding of the 10-country survey by polling firm Penn Schoen Berland (PSB), which included 2,000 face-to-face interviews with Arab nationals and Arab expatriates aged 18 to 24 years in the GCC, Egypt, Lebanon, Jordan and Iraq. The interviews were conducted in December 2010 and January 2011. In wake of the protests across the region, PSB conducted an additional poll of 500 young people in five countries, including Bahrain, Egypt, Jordan, Lebanon and Iraq. These findings reveal that while the importance of democracy is even more pronounced, it is balanced by a desire for stability. Support for the protests is high among this group, with people believing these movements will have a positive

impact. Young people in these countries are, however, markedly less confident that their countries are moving in the right direction they were just a few months earlier. “During this period of seismic change across much of the Arab world, it is more important than ever that we understand the hopes, fears and aspirations of the region’s youth,” said Mark Penn, worldwide CEO of Burson-Marsteller. “Recent events in Tunisia, Egypt, Libya and elsewhere are the manifestation of this fundamental truth: Arab youth have a deep and enduring desire for democracy.” “In a region where two-thirds of the population is under the age of 30, policymakers, business leaders, marketers and the media need to understand the priorities of our young people,” added Joseph Ghossoub, chairman and CEO of the MENACOM Group, regional parent of ASDA’A Burson-Marsteller.

Key findings include: • The high cost of living is perceived as the most significant challenge, followed by unemployment; in both instances, the level of concern is much higher among youth in non-Gulf states than in Gulf states. • Arab youth are significantly more concerned about the gap between the rich and the poor than they were in 2009, especially in Jordan, Lebanon and Saudi Arabia. • While 63 per cent of GCC youth say they expect to pursue further education, just 14 per cent of non-GCC youth believe the same. • Arab youth prefer to work in the private sector (47 per cent), rather than the public sector (40 per cent), although Saudi youth (79 per cent) strongly prefer to work for government. • More than half of all regional youth say they intend to start their own business in the next five years.

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News Plus

HOW FAVOURABLE ARE YOU TO THE FOLLOWING BRANDS?

36.1

AUTOMOBILE BRANDS

5.4 Renault

12.3

8.1 GM

Honda

Ford

Toyota

Nissan

5.4 Géant

Giordano

8.3

6.2

Anchor

18.7

26.9

36.2 Nike

Damas

39.6

39.1 Louis Vuitton

FASHION BRANDS

Colgate-Palmolive

10.8

9.2 Nestlé

Subway

18.4 Carrefour

12.5 Pepsi

23.8

19.2

McDonald’s

Etisalat 0.6

Most favoured in each market

BlackBerry BlackBerry/Nokia Nokia Microsoft Lenovo

McDonald’s Coca-Cola Subway Pepsi Carrefour

Damas Louis Vuitton Nike Armani

Toyota Nissan Ford

KSA, Bahrain, Lebanon, Iraq UAE Oman, Egypt, Kuwait Qatar Jordan

UAE, Oman, Qatar, Kuwait, Jordan Egypt, KSA Bahrain Lebanon Iraq

What do you like to do for leisure? 66 59 51 49

Surf the net

Clothes/footwear

25 26

10 Among all

30 GCC

40 Non GCC

• Some 80 per cent now use the Internet on a daily basis, up from 56 per cent in 2009; social networking is also expanding dramatically. • TV remains the most popular and trusted source of news among youth in the region. • Arab youth say that traditional values are extremely important to them, especially those in Iraq (94 per cent) and Bahrain (91 per cent). The survey also examined attitudes and behaviour towards leisure time and brands, please see above. n

24 24 23

Watching movies

I save it for myself

49 49 48

Dining out

19 19 20

Relax with friend at home

51 52 50

Fashion & trendy accessories

23 23 22

Visit malls

On mobile calls

28 30

Listen to music

Egypt, KSA, UAE, Oman, Qatar, Kuwait. Jordan Bahrain, Lebanon Iraq

What do you spend your money on?

Watch TV Dine out

UAE, Bahrain, Kuwait, Qatar Lebanon, KSA, Jordan Egypt, Iraq Oman

10 Among all

30 GCC

Non GCC

Lenovo

Samsung

Apple

Sony Ericsson

Microsoft

BlackBerry

Nokia

3.9

10.1

9.6

16.4

19.6

19.2 Sony

XBox

21.2

Coca-Cola

38.2

FMCG BRANDS

35.4

TECHNOLOGY BRANDS

Emporio Armani

Top 10 Findings of the 2010 ASDA’A Burson-Marsteller Arab Youth Survey 1. An enduring desire for democracy 2. Increasing anxiety about the rising cost of living 3. Gap between rich and poor of increasing concern 4. Less optimism about economic recovery and future outlook 5. Education gap widens betweens Gulf states and other Arab countries 6. Increasing preference to work in private sector, eagerness to start own business 7. Internet makes more inroads, with social media growing in importance 8. Television the most popular and trusted source of news 9. Traditional values are paramount, while parents grow in influence 10. Increase in positive perception of global powers, growing sense of global citizenship. www.arabyouthsurvey.com, Source: Asda’a Burson-Marstellar Dec 2010-Jan 2011

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open book

APCO Worldwide’s global development president, Brad Staples, tells Precious de Leon he hopes regional PR will move beyond media relations and more into governance and transparency. Brad Staples, CEO of APCO Worldwide’s EMEA region, is responsible for the development of APCO’s interests in Europe and co-ordination of APCO operations across the region. As head of APCO’s global competition practice team, Staples has co-ordinated public affairs programmes relating to M&As across Europe, plus those with transatlantic as well as global dimensions. Prior to joining APCO, he worked at a European affairs consultancy in London and Brussels. Staples holds a BA in politics and government, and has studied at the University Stendhal, Grenoble. He speaks English, French and Italian. What was the agenda for this visit? It was focused on client relationships,

new business development and integration of the JiWin team into our company. So it was a mix of internal and external activities. We already have a number of significant client relationships, some of which are APCO relationships prior to us incorporating JiWin into the business, while others are JiWin clients who are very important to us. Before we completed the acquisition, I spent a lot of time meeting with JiWin clients to understand how they felt about the business, the team, the quality of service, and what their ambitions are for the relationship in the future. Clearly, with the leading JiWin clients, there was a hunger for more strategic

communications services and greater alignment between business strategy and corporate communications and PR support, as they look at how they can emerge from the global economic downturn. They are looking for a firm that has both strategic and strong tactical delivery support. You specialise in civic engagement, M&As and corporate governance. Is this an indication of the kind of clients APCO is eyeing in the region? JiWin has a strong relationship with the leadership in Dubai, given its history with Dubai Holdings, while we also have a key client relationship in Abu Dhabi, with Masdar.

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One of the things we feel we can offer the region is that we are comfortable with the close proximity between government and business. It’s an area we are familiar with. We do a lot of work in the public sector for governments around the world, working between businesses and governments. That’s very much a sweet spot for us, in terms of our range of services. APCO is a bit unusual compared to many of the communication firms that already exist here. We’re not a typical agency. Our work is equally divided between support for clients in the corporate reputation management positioning area, government relations policy issues management, and corporate advisory area. For the latter, I’m talking about helping companies invest in new markets, find new partners, and navigate political and regulatory problems. One of the opportunities we saw and one of the principle reasons we wanted to set up here is because the market is well represented in terms of corporate PR, but not in terms of strategic corporate advisory and government relation services. There’s a niche there. In 2008 APCO set up shop in Dubai, so why the acquisition? We had a small APCO office, but we could see the opportunity and thought the best way to expand our interest here is through acquisition. The reason for this is because we wanted to have a business of scale and resources with the capacity to deliver as part of a worldwide footprint, and we got to know the JiWin group and thought it had a very capable team. And Dubai, I think, is going to be one of the hub offices for us in the future for the business worldwide. Key business centres for us, at the moment, are our corporate HQ in Washington, DC, New York, London, Brussels and Beijing. They are our principle offices, but we think the next key global centre for growing our business will be

Overarching: Staples says the JiWin acquisition and office will provide an arc from Africa and Southeast Asia

Dubai. And while it will cover the GCC and Arab region, it will also connect us more effectively to the rapidly growing Indian and African markets. The office will provide an arc for us from Africa through the Gulf and then to India and Southeast Asia.

our opinion research capabilities and how we support corporate reputation management through research. We are beginning a familiarisation with clients about the services we offer.

Will these operations be centralised in the 35-strong Dubai office? First and foremost, we want to strengthen the resources of this team and provide training, support and best practice from around the world. We also want to bring new services into the market. We are bringing our online capability and our research capability, as well as several other units of business. And then we’ll look at building our presence across the GCC. Abu Dhabi, for example, would be the next place we’d look to, but we are also developing a Pan-Arab regional strategy.

In 2009 you said about the Middle East: “There should be a stronger lead in corporate transparency and civil engagement.” Have you seen any headway? One of the significant outcomes of the economic downturn has been a need for corporate clients to focus more on governance and transparency issues, particularly in sectors badly affected by the crisis such as banking and finance. Trust has become a critical problem with key stakeholders and consumers and it is central to defining reputation in certain sectors. Many of our clients have had to look closely at their governance procedures and how they demonstrate best practice across the stakeholder community.

When will you launch APCO Insights and online? The chairman of APCO Insight – our global opinion research consultancy – is here with me. All of the client meetings are with him. We are talking about

Any other challenges? To date, PR in the Gulf has been driven by media relations and has been quite tactical. We’ve got a great opportunity to change that dynamic and see this as a

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Q&a

Pastures new: One of APCO’s key clients is Masdar in Abu Dhabi, where the second regional office will most likely open

...PR in the Gulf has been driven by media relations and has been quite tactical. great moment for that paradigm change in business. From a global perspective, we think of Dubai as a gateway for businesses in emerging markets, as more and more of our clients are coming from Asia, particularly China, India and Southeast Asia. Many of these businesses are less well known to the financial markets here and to global stakeholders, so they need to demonstrate best practices in leadership, governance and transparency, and tell their story well if they are to be successful in IPOs and acquisitions.

be defined by the extent of their market share in India and China. And it’s not just in communications. It’s in the way they do business. So communications firms have got to understand the economic imperatives that will shape the future markets of these businesses. It’s not just about localising global messages, but developing messages from within the marketplace. Brands can’t just translate global campaigns or ‘tweak and amend’. The most effective messages resonate because they come from within the place.

Any other trends? Future growth is in emerging markets. Therefore there’s a need to define the way companies do business, how they sell their products and provide their services, given the level of consumer need and the nature of those markets. They also need to refine the way they communicate, so they can be relevant locally while their message stays coherent in a global context. The future scale of global presence for multinational companies will

How do social networks affect your sector? It’s been the biggest change in our business in the 15 years I’ve been with APCO. The revolution in social networking has completely redefined the way we provide services to clients in all areas. It’s not just in branding and corporate, but also in issues, policy, regulatory. Every aspect of our communication has changed because of this new paradigm. And it’s because people are empowered.

In these terms, our worldwide experience and expertise is something we want to bring to Dubai. We have one of our colleagues from the online team based in Abu Dhabi at the moment, embedded as part of Masdar Group. Microsoft is another example where we have had APCO embeds across the world. Any additional thoughts? We’re very confident about this market. We’ve been through a tough period economically in the GCC, but we see huge opportunities for growth, so we’ve made this significant investment because of that confidence in the region. n about the firms APCO’s first office outside the US opened in Moscow in 1989. It now has 29 offices worldwide. In 1991, Grey Group Global acquired a majority stake in APCO, valued then at $3 million. In 2004, APCO revenues were valued at $50 million. Two years later it was officially certified as a women-owned business. JiWin handles Dub ai Ho lding, Johnson & Johnson, Noor Islamic Bank, Merck, the Landmark Group and NASDAQ Dubai.

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r e ta i l v i e w

du, DUBAI MEDIA CITY A touch of humanity adds more life to teleco’s latest outlet. Companies are increasingly focusing on consumer needs, not only in how they relate to business, products and services but, more generally, to life, and how those products and services deliver. In essence, the goal is to humanise the business. du’s new flagship store in their Al Salam Tower offices in Dubai Media City reflects such a shift in their approach. Before reviewing the retail environment, however, one should consider the wider brand context and changes at du. It is in one’s nature to consider, share, understand and learn. This is what inspires people and, in turn, inspires the ‘consumer journey’. To ‘add life to life’ du examined people’s worklife, personal life and social life, using its findings as catalysts to drive its products, services and delivery. This has created real connections and insights into consumer needs, allowing the company to continually reassess learnings in a never-ending cycle of product and service delivery.

It also narrows the gap between business and consumer needs and behaviours, thus maintaining relevance and engagement. du’s holistic approach is evident in its retail environments, which is successfully delivered across a range of touch points. The consumer journey starts outside, where simple visual devices, such as the energetic blue signage at the entrance and the more sedate white office HQ sign, create an intuitive flow into the store. There is also a well-considered balance of product and services information with the broader brand communication to ensure that consumers are aware, but not sold to. On entering one immediately engages with the brand in several meaningful ways. The overall design of white and soft shapes and lines forms a clean, approachable backdrop for an intelligent use of colour and brand tone of voice.

Gently pulsing LED lighting creates areas of focus, while brand icons (for products and services) and the use of words, such as ‘hello’ at reception, all add to the brand language and approachability. The store never deviates from delivering the brand message, transitioning effortlessly between areas dedicated to various consumer needs and types. A delicate balance has been struck between supporting the high traffic transactional needs of the business with the more consultative and personal needs of different consumer profiles. This is evident from the simplest of applications such as the ticketing system that support how consumers use products. It is also apparent in the areas for personal and business customers. The personal area includes payment and service counters, a self-discovery area, consulting rooms and a café. The business area includes a business library connected to an informal consulting area

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and formal consulting space. There is also an auditorium for launches or industry seminars, providing du with an opportunity to engage with consumers and non-consumers alike. Moving through the store, the payment area considers types of transactions together with the time to make them, resulting in a functional space with bench seating and easy flow-through. To the right of the transactional space is the café, allowing for informal interaction. Life is, after all, about a healthy balance. Moving beyond the payment area, the self-discovery space allows for the browsing of products and services (eg, active BlackBerry and iPhones) and various payment methods, so consumers can manage their accounts in a way that best suits their needs. This is facilitated through iPads, touch screens and laptops, and supported by customerservice staff. There are also private consulting rooms. The forum area sits between the personal and enterprise areas, providing equal access to both. Seating for upwards of 50 people allows for enough space to hold product launches and

The store never deviates from delivering the brand message discussions, and the stage area is large enough to hold presentations – another demonstration of du’s realisation of what really drives people. Soon there will be seamless touch-screen too, evidence of how du has tapped into current cultural drivers – music, chat and gadgets. This will allow consumers to explore and interact through a needs basis, rather than products or services, making the interaction that much richer and meaningful. Beyond the forum area, and with its own entrance, is the business area. Immediately the space begins to mutate into a business discussion in subtle ways. The overall approachable tone of voice is never lost, but screens displaying the latest business information, from breaking news to stock information, provide an unmistakable reference indicating the change in the area’s use. In the centre there is a casual consulting area supported by laptops and customer service reps.

It’s also easy for consumers to interact. Soon to come is a business library. Overall, the store is a resounding success. du’s attention to detail will ensure that it all comes together and delivers a real, meaningful consumer experience that transcends the functional to create real connections and truly add life to its customers’ lives. n RATING

James Merle, design director, The Brand Union

Matthew Laubscher, executive brand director, The Brand Union

Retail experience Brand definition Design effectiveness

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ÂŠ Getty/Gallo Images

COVER STORY

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A bling ping

Precious de Leon discovers that luxury brands have no choice but to learn the online social language. It’s been said and proven time and again: in the online world, consumers can build you up or break you down. Interactivity online no doubt levels the playing field between brands and their consumers and, in most cases, makes the unattainable attainable and readily accessible – far from what luxury marketing is all about. Right now, with traditional media such as print, high-end brands have so far had the luxury to pick and choose the conversations of which they can be part of. For this article, for example, a number of brands did not contribute, beyond what they shared in press releases. But when it comes to online, luxury brands may not have a choice in the matter. According to a survey from US-based luxury consultants, Unity Marketing, four out of five consumers in the US logged online in the past three months from their desktop or laptop computer to buy, shop for a gift, or research a product or service. The study, Affluent Consumers and How They Use the Internet, Social Media and Mobile Devices: an in-depth profile of the luxury online consumer, also found that

mobile devices are increasingly important for brands to connect with young affluents, aged from 24 to 44 years, who use mobile apps at a rate two-times higher than mature affluents, 45 to 70 years. “Luxury marketers can no longer depend on in-store ambiance to create the experience of shopping for a luxury brand or service. Rather, they need to create the kind of robust, 24/7, mobile experience that reaches the consumer where they are,” says Pam Danziger, president, Unity Marketing. A similar pattern seems to be emerging from youth, 18 to 25 years old, in engaging

Time sensitive: Mac McClelland

Story telling: Nick Whetham

the Middle East. A study of university students in Dubai found that the time they spend on Facebook tapers off as they start their professional life, moving their social media consumption towards more mobile networks such as Twitter. “Activity on Facebook, specifically, tends to peak off after three years of use, after high school and university, when they enter their professional life. The results are counterintuitive to what we had expected,” says Dr Kathy Shen, assistant professor of business and management at University of Wollonggong, Dubai. This insight was uncovered during Dr. Shen’s study on how the evolution of technology is changing people’s characteristics, attitudes and behaviours. “We found that for this group, there is very little social exploration or making new connections and that most respondents do social browsing of their existing network rather than seeking new experiences.” Dr Shen gives two reasons for this drop in activity: they get busier and there are more alternative channels that are more accessible.

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Accessories all areas: Products such as bags are becoming as popular online as they are in store

Customers may not be willing to discuss a bad experience with brand staff, but will do so online. These findings, she says, sheds light on marketing to luxury online. “People are using a combination of different channels online, so even a digital strategy has to use a combination of different channels, instead of just focusing on one, say, Facebook strategy.” Exclusively current Apart from staying exclusive, luxury brands need to stay current. And to do that, they need to create a more dynamic online presence. “HNWIs are just as tech-savvy as consumers and know how to search for information about brands on the web,” says Mac McClelland, president and CEO of the Luxury Marketing Council (Middle East). “Although luxury brands may not sell via the web, they must have marketing and customer service portals at a minimum. Brands such as luxury hotels, private jet rentals, and other time-sensitive products

and services must give customers the option of booking directly on the web, and brands that fail to do so cede customers to the competition. Luxury brands can create a web platform with video clips, newsletters and current news about the brand and its industry, says Maria Hatzistefanis, owner and founder, Dubai-based Rodial Skincare. fashion forward

App-ly: Louis Vuitton iPhone app now attracts celebrity “amblers” from around the world

“We have a lot of regular customers who first experienced our products in a store and now re-order online, as well as some new customers who read about our products and choose to buy online as it is more convenient.” Also key to extending the brand’s positioning online is the maintenance of the unique shopping experience and fulfilment of the product’s promise on the website. The product should be presented the same way it would be instore, and customer support should be available as it would be instore, says Hatzistefanis. This article isn’t just about creating own-brand websites. It’s about engaging people – consumers or otherwise. But this environment poses a new challenge for premium brands, which have built reputations around exclusivity. How do brands maintain their positioning online? There are brands that are already playing heavily in this field. Louis Vuitton, for example, has launched an iPhone app in February. Called Amble, the app allows users to record pictures, notes and videos of places they like around the world, follow celebrity amblers and access the Louis Vuitton city guides.

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COVER STORY

Name in lights: Ralph Lauren used 4D projection on their flagship stores to mark the 10th anniversary of its website

They are worried it may take away from the brand’s overall mystique. In many cases they are right. In fact, the brand’s most recent tech-influenced marketing effort was the digitizing of its fashion show last month. It allowed consumers greater remote access to the show, complete with a panaromic view of the venue. The feed was linked through the brand’s website and through its Facebook page. (Other examples of luxury brand digital campaigns are in the box out in this section.) For luxury brands, it is almost necessary to have a two-fold conversation online. The first dialogue is with existing and potential buyers of the product or service. This could mean a spectrum of online services, from online datamining and exclusive online clubs to online purchasing. The second is about reinforcing the brand’s aspirational value – and in some cases, even make it stronger, bringing it to a larger audience than you could through any other platform.

The story continues “For luxury brands, the most salient element is their ‘story’. The benefit of digital and social media channels for luxury brands is that it provides them with an opportunity to tell their story in a new and engaging way that is not simply one dimensional,” says Nick Whetham, digital strategy director for Havas, talking about the role of digital in marketing luxury brands. “Digital and social media allow luxury brands to get closer to the aficionados o f these brands. The experience has evolved from simply in-store, magazine Story teller

Emotional: Hussein Freijeh

adverts and runway shows to mobile applications, Facebook presences, Twitter handles, fashion blogs and forums through to ecommerce websites.” Hussein Freijeh, commercial director, Yahoo! Middle East, adds that “luxury brands are even more ‘emotional’ than other brands, so the apprehensions are mainly around the “creating emotions” part and exciting the customer.” “In general, no one can tell their brand story in a search engine, you tell a brand story on your own website and through advertising campaigns on other highquality content sites that fit your brand and individual target groups. “For luxury brands, it’s also about positioning on those sites and having exclusive display opportunities which enable a presence that establishes an emotional connection, rather than a tactical or quick-sell approach.“ Social networks Premium or not, a brand remains susceptible to both good ratings and bad reviews from consumers online. In fact, they are more likely to be open about negative feedback on the web and what’s more,

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instead of just going to the brand’s website to make a complaint, they will be more likely to continue that conversation on social networks. “Customers may not be willing to discuss a bad experience with brand staff, but will do so online,” says McClelland. “Seeing what customers are saying about the brand, how the market is reacting to events and brand announcements, and getting the right message out quickly, cost effectively, and to a large audience, can all be accomplished on social networking sites.” Apprehensions Of course, luxury brands have been online for some time now. Ralph Lauren, for example, recently used 4D projection mapping on their Madison Avenue and Bond St stores last year to celebrate the 10th anniversary of ralphlauren.com. The projection created a virtual catwalk and polo game and sprayed the Big Pony fragrance over the closed-off streets where events were also held. But there is still some headway to make. As online breaks the self-contained dialogue brand owners have always had with their audience, transition into a more fluid twoway communication can be difficult and sometime avoided all together. “There is no difference between a luxury brand and any other brand in that both need to create a link and engage with their audience. However, for luxury brands, the ability to have a sense of exclusivity on the right platform that reflects the attributes of the brand is paramount,” says Yahoo!’s Freijeh. Yahoo! Middle East’s female-focused website Helwa.com is a strong selling point towards luxury brands in the region. McClelland adds that brands may be unwilling to sell online as they “may feel they are unable to provide a personalised and bespoke service to their HNWI customers.” “That said, customers may want the convenience of ordering or resolving issues with customer services online, rather than

Measuring impact: Social networking sites feature positive and negative user reviews

going to the store or calling on the phone. Customers know they can speak with a brand representative at any time. They use the web for their own convenience, not for the convenience of the brand,” says McClelland. He uses Kate Spade as an example of how to bring clients closer to the brand and enlist their help in choosing new products and lines. Many of the brand’s announcements are only online, so repeat visits are high from loyal viewers and consumers. Beyond customer service, brands such as Maserati translate the brand’s aspirational values online by allowing visitors to its website to design their own car, try different interior and exterior colours and fabrics, and install optional equipment to build the exact car they want. Extending this option, the brand gives its target customers the option to save the bespoke settings and directly order and pay for the car online, knowing their car will be built to the specifications they chose. Despite a number of opportunities, there is still trepidation to using this medium. From Whetham’s perspective, the two main apprehensions stem from dealing with social media specifically.

“The first is that not all brands want completely open two-way dialogue with their fans. They are worried it may take away from the brand’s overall mystique. In many cases they are right. To quote Coco Chanel, ‘Elegance is Refusal’. The other apprehension is to do with creating digital campaigns on a local level. In most cases key visuals and films for the main brands are handed down from in-house creative departments in Paris or Milan for the above-the-line advertising campaigns.” Whetham hints at similar events to the 4D projection mapping are planned for the “not too distant future” in the region. “With digital we are able to stretch the boundaries, take the idea from the global campaign and create local engagement. There are usually less restrictions both from the brand on a global level and with local media – not as many restrictions on content,” he adds. Opportunities ahead While the online environment provides a unique opportunity to get up close and personal with a wider audience, it also poses a unique challenge. With so many ways to consume content online – from

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behind the scenes

• The launch of Chanel J12 Marine watches on the New York Times iPad app last year was simply a beautiful piece of online advertising, and was the first luxury brand to showcase the potential of iPad. • Dior booked all the videos on Yahoo!’s news section, where ads were in the pre-roll. The ads combine the visual impact of TV and the interactivity of online by making the ads clickable. A behind-the-scenes clip was also available online. • amble i-Phone App by Louis Vuitton, which allows users to record pictures, notes and videos of places they like around the world, follows celebrity amblers and accesses the Louis Vuitton city guides; the app is genius in that it allows Louis Vuitton to own the ‘Luxury Travel’ space. • Traffic from Carolina 212 ads, sub-section sponsorship and special homepage executions on third-party sites such as Helwa.com were directed to a microsite where they entered the “Are you VIP?” competition. Helwa, which is part of Yahoo!’s network, boasts a total of 6.9 million unique users at time of writing. • The Hugo Boss iPhone application allows consumers to browse the current Boss Black, Boss Orange and Hugo collections. The “Videos” tab shows footage from the runway and photo shoots, and a “Store Locator” guides users to local Hugo Boss retailers. • Tiffany is now providing a application featuring a Ring Sizer that lets users determine their size. Users can zoom in to a ring to view details more closely and Users can make an appointment for a diamond consultation via phone, email or in-store.

desktops and laptops to mobile phones and other handheld devices, the challenge is to be able to stay consistent with the message, while keeping in mind the particular way it’s being consumed. As Havas’ Whetham says: “The challenge increasingly for luxury brands in the digital space will be to know, understand, manage and influence content across their

digital touch points to tell a cohesive and engaging story.” “Brands who create robust content plans that weave channels together seamlessly, where each piece of content is a piece of the story, will be able to create a sense of discovery to excite their audience.” Havas launched a regional campaign for L’Occitane Fleur Cherie in December 2010,

where an interactive facebook application, the “L’Occitane Fleur Cherie Game,” was built around the online-only launch of the new fragrance. The campaign is being attributed to the product being sold out in its first few weeks of launching. The agency also ran a digital campaign in the region for Carolina Herrera VIP Women, which was linked to a Facebook app where users could nominate friends to be ‘on the list’ and collect votes. Whetham says that further innovations in technology, such as the launch of more tablets, will create opportunities for luxury brands to create campaigns with even more interactive customer engagement. Some of these technologies include HD Video, in-app advertising and in-app purchasing, and even augmented reality. Whetham also foresees the creation of higher quality user-generated content, along with more powerful browser-based apps. Besides creating websites and apps, brands need to consider picking the right ones on which to advertise. “The challenge for any brand becomes about how to stage their brand in the most exciting, creative, and engaging way,” says Freijeh, citing Yahoo! Maktoob’s customised approach. “We utilise targeting capacities that help brands reach the right audience with the right message at the right time, allowing for high-scale and effective addressing of the right target group. No media can offer this like the internet.” While many global brands already understand the power of online communication, Freijeh expects to see more regional luxury brands realising the potential of this medium and its impact on their brands. “When you compare online advertising with TV or print, the big benefit for online is engagement,” says Freijah, adding that a Yahoo! Maktoob reader spends an average of eight to nine minutes per page, “so they are likely to become engaged with a creative and interactive ad a lot more than, say, someone who is likely to be distracted while watching TV or flipping through a magazine.” n

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China syndrome

Brands looking to expand into other markets may view online as a smarter investment than bricks-and-mortar stores. Mattel closed its Shanghai store, just two years after opening the biggest Barbie outlet in the world there, according to the Financial Times. Along with Home Depot and Best Buy, Mattel failed to crack the local market. Shaun Rein, MD of China Market Research Group, says: “They chose the wrong location for the store and offered sexy clothes when young Chinese women tend to prefer cute designs like Hello Kitty.” Analysts perceived all three companies were seen by consumers as expensive in a very price-sensitive market. In a predigital era these misunderstandings might be vaguely palatable, but not today. With the ability for an “ordinary person” to peer into the desires of digital citizens through the magic of social media and networks, this faux pas is unacceptable. At the other end of the scale, Apple, Nike, LVMH and Estee Lauder have very profitable operations in China. It is widely documented that the mainland is rife with bootleg versions of most brands from Apple iPhones to Louis Vuitton handbags. So what are these companies doing right, that Mattel and company were not? Speaking of high-end fashion, the luxury fashion website 1stdibs.com hosted a very rare sale of garments from by Fortuny, a highly sought after brand. The fact the sale is happening online says a lot about luxury brands and their digital presence, and about consumers’ preference for acquiring such products online. The site attracts 1.75 million visitors a month, and is a subscription-based service, offering stores and dealers a platform for online transactions. This article would not be complete without mentioning the recent acquisition of Bulgari by LVMH.

Changing fashions: Luxury consumers are increasingly tempted by online shopping

Bulgari’s open enthusiasm for this deal is in stark contrast to the stealth purchase of Hermès shares by LVMH last October, which was “neither desirable or required” according to Hermès CEO Patrick Thomas. The group upped its stake in Hermès to more than 20 per cent last month, prompting fears of a possible takeover. LVMH, of course, owns Guerlain, Givenchy, Hennessy, Marc Jacobs, Dior, De Beers and a host of other luxury labels. So, what sort of digital strategy does LVMH have? Originally it had an online store called eluxury.com, but that closed in 2009 due to losing market share to brands offering ecommerce on their own sites. One year ago LVMH launched nowness.com as an information reference and original content repository. Similar to Youtube, the site customises offerings based on historical behaviour. Clickstream data shows that almost a third of visitors visit Nowness.com after

being on Facebook, and 12 per cent visit the site after being on Twitter. After leaving the site, a quarter visit Facebook and just over 12 per cent visit Twitter. This suggests a high impact of “socialness” which is usually implicated with fashion and beauty content online. This behaviour should help generate more traffic. Kamel Ouadi, digital EVP for Nowness, says the site is aiming to be a place to learn, with content that is easy to navigate. He previously worked as VP, managing the ecommerce and CRM functions of L’Oreal, China. n This blog was originally published in ArabNet.com

Alexandra Tohme digital planner/strategy, Leo Burnett

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lured to the web

As more high-end consumers turn to the internet, should luxury brands be more ready to explore social media marketing?

Easy access The elite nature of luxury doesn’t have to preclude populist social media

Traditionally, luxury brand owners have been hesitant to explore the world of social media marketing. Some feel the accessibility of the internet might undermine a luxury brand’s promise of exclusivity. However, as the percentage of High Income Internet Users steadily increases – reaching 71.08 per cent in 2008, according to Trading Economics – luxury brands cannot afford to ignore ecommerce and online advertising. Moreover, per capita, online shopping in the UAE reached $1,193 in Q4 2008, the highest in the Asia/Pacific, MEA region, and has been growing ever since. For those who worry that a move to the web will affect the experience that luxury brand shopping offers consumers, Alex Bolen, CEO of Oscar de la Renta, says the company’s staple product – close-fitting, $4,000 cocktail dresses – did very well when sold online.

Previously he thought these could only be sold in a boutique. In such a case, it becomes important to invest in digital platforms for both visual and textual information and forums online. Brands such as Mercedes-Benz has successfully used digital platforms to boost its image as an elite, high-fashion brand that evokes desire, aspiration and an awareness of cultural exclusivity. Combining information about the latest products with popular activities, such as gaming, for example, these brands have drawn in the Gen V high-income consumers, who are fervent users of new media and digital social networking platforms. Dubai-based luxury lifestyle firm Irony Home has also prolifically used web-based tools such as Twitter and Facebook to inform and attract clientele. The power of interactive audio and visual tools online can be tapped by the same storytelling tactics that mar-

keting strategies use to construct the aspirational lifestyle luxury products and brands represent. The thought capital based on exclusiveness – central to such brand identities – should be accessible to everyone for the value of such products to be recognised. Since social media initiatives revolve around accessibility, there is no better platform to indulge the Gen V’s desire for an exclusive access to luxury. Another aspect of targeted marketing where social media can be useful rests on its potential to allow brands to recognise influencers on the rise. Through careful community monitoring and management, such social authorities and arbitrators of trends can be identified and engaged as mediators of brand values. Engaging their online and offline social networks can also be profitable in amplifying brand awareness. Grey Goose, the French luxury distiller, is an example of a company that integrated the digital platform to support touch points like events, campaigns and customer service. Luxury brands can walk the thin line between being exclusive, as well as accessible through careful social media strategising and successful integration of these new media forays into the existing offline marketing policies. After all, luxury brands must, by definition, be exclusive. However, their value must be recognised and desired even by those for whom it will only remain an aspiration. n

Akanksha Goel chief enthusiast, Socialize, Dubai

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74% of our readers have lived in the UAE for five years or more Over half of our readers (55%) earn more that the national average monthly household income of AED 18,200* 50% of our readers have investments products within and outside the UAE 64% of our readers enjoy the theatre and going to live music concerts Almost half of our readers (45%) visit cultural, heritage sites and museums Almost half of our readers (44%) have enrolled in an educational course or learned something in the last year A third of our readers (34%) have enrolled in self improvement courses over the last year Source: YouGov Siraj, December 2010: The National Reader Profiling Survey conducted amongst (sample size) of The Nationalâ&#x20AC;&#x2122;s readers *UAE Ministry of Economy, 2009

Time well spent

Client Servicing

GMR exclusive: measure of a man In part two of our report on Global IAA chief Alan Rutherford’s address to the ABG, he recalls his days as global head of media at Unilever, where he helped bring “creative thinking and media closer than I’ve seen in any other agency or client relationship.” “One of the things that Unilever taught me was to be very process-driven in what we do with marketing services. We had a very disciplined planning process. I was lucky enough to start my work-life there with Niall Fitzgerald, my chairman. [Fitzgerald joined Unilever in 1973. He left in 2004 having spent the past eight years as chairman.] He is an accountant by background, but was actually a surrogate advertising and marketing man. “We wrote a three-stage plan and set about implementing it, getting the structure right. We put in place the resources, the policies, or ways-of-working – the global consistency to enable management to move forward. “Secondly was organisation: To create the right environment for the capability

Alan Rutherford Alan Rutherford is chairman and world president of the IAA. He is also chairman and non executive director for a number of companies, including Axiology, which specialises in performance management and financial compliancy of marketing services companies, and UK-based digital marketing company, Volume. Previously he was CEO of Digital Global, worldwide head of media at Unilever and media director of Ogilvy & Mather. During a short visit to the UAE late last year, he spoke to the Advertisers Business Group. What follows is an edited version of his presentation.

and get the buy-in of the key stakeholders, show early wins and remove the barriers. There was an information and education role as well. “The third was to use Unilever’s scale to achieve real advantage in the market. “I remember Niall asking me how long it would take to do all this. I said what I thought was a relatively pessimistic two years. He said five. It took seven because, to be honest, we underestimated the scale of the task, the amount of markets, the amount of global agendas. “So what did we do? “Well, the first point was that everything we did was endorsed and sponsored by the executive committee. Senior management endorsement is fundamental to achieve any change in marketing services. We put in place what I call

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‘The Policy’. Unilever had 12 policies. “Policies were things that had to happen, had to be done. If you were a chairman of a company and you failed the order of your policy, well that was serious stuff, almost a dismissable offence. “We had a media policy to ensure that certain things that we thought important happened in every country around the world. They included having media and financial audits. That was instilled early on to make sure the right process, the right compliance, was in place. “We had key principles about how the discipline had to be operated – the role of planning, how to budget. There was a charter – which was subscribed to by both Unilever and agencies – about how people had to operate, had to respect each other. It was a real relationship builder. We identified who should be on the agency roster. It seems simple these days, but it wasn’t necessarily so then. We also defined what a standard agency remuneration should be. I think there were 16 different remuneration levels, and some agencies getting excessive amounts, and they didn’t even do media. “Media planning was to be consolidated everywhere around the world. “So stage one [was] the structure. “Stage two was organisation. This is where we started bringing more discipline into the overall media and marketing service management. We made sure that each marketing services manager, each agency, each country, had their set of KPIs, targets they had throughout that year. It allowed us to put some consistency in place. “We rolled out what we called CCP – Communication Channel Planning – which I think was one of the first 360 planning processes. We supported that by giving the tools to each of the countries and the agencies so they could operate that. For example, there was a budgeting tool, each brand, each agency had to use that budgeting tool. It allowed us to ensure brands in countries and

Reach: Leveraging its global scale helped Unilver reduce marketing services costs

…often you will find things happen a few months down the line, which meant that you shouldn’t have paid that incentive… global categories were in alignment. They had the same information, the same tools, same process. There was a clear definition of marketing objectives and communication objectives. “Everybody had set definitions that they could work with. We had a tool that helped people choose the communication channels they needed to deliver against objectives. We enabled thinking by helping people, helping our agencies and the marketing teams to deliver against that CCP. It wasn’t perfect, but it was innovative at the time and significantly changed how Unilever went to market with brands. “The biggest win was that it brought creative and media closer together than I’ve seen in virtually any other agency or client relationship unless, of course, it’s one overall assignment with a fullservice shop. “And then the final part was scale. How could we use the Unilever weight to achieve more? We ran a simple process

known as Project 40, which was basically a European pitch for all the media planning/buying business. And actually it went beyond Europe eventually. “The thinking was, ‘we’ve already consolidated in each country, so how could we further use our scale’? Funnily enough, every local agency that we used in Europe and every local Unilever media manager or marketing director said we couldn’t do any more, we couldn’t improve our media buying at all. But you know what? If you increase the scale, increase the prize, you get people focused on stuff and you can do it. We significantly improved the value we achieved and significantly improved the media pricing we achieved. It was called 40 because the target was a 40odd million euro saving, and it was easily over-delivered. “We bought in hard measures for the agencies, however. Throughout we employed consultants and auditors to really measure, to drill down

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Client Servicing

Savings: Communication channel planning helped generate significant savings

… most of the audit companies audit the companies anyway, so how can they work on behalf of the client...? really deeply into those results. We also took another angle and strengthened our own relationship with media owners. We entered into some long-term deals with media owners that we identified as being clearly strategic for Unilever. So we had a long-term deal with ITV in the UK, with Video international in Russia etc. “On another project we looked at production. We called this Project Spielberg, because when we started to look at TV production, every TV production quote was like a Spielberg film. So we took a close look at that, bringing management in-house, we looked at de-coupling the agency/production house relationship. “Finally – I think back in 2006 – we looked at digital and tried to work out

how to integrate the digital agencies onto the roster of creative agencies and the media agencies. “That all brings me to my top-10 learnings drawn from Unilever, Publicis Group, from being at the IAA. “The first is the contract. Everyone says ‘My contract is just about perfect,’ but I bet there are gaps in each and every contract that each and every one of you has. “I bet none of you actually has the right to audit the media holding company, not the media company, the media holding company. That’s a very difficult clause to insert. And I bet none of you have the right to audit across the holding company a WPP, not just a Group M. Because it’s interesting how the hold-

ing company can use the breadth of the companies that it has to manage business in the way it wants to manage that business. “Number two is dig deep on remuneration. Be very clear on the detail. If you are fee-based, you really have to start asking what goes into direct cost, what goes into overheads etc. And again, the old tricks remain, having the database staff bonus built into salary cost. It often gets missed by advertisers. “Number three, be very, very clear on the KPIs for your agency. Keep them simple. Make sure they can be measured. “Incentives. Again simplicity is key. Know how you are going to measure the incentives. Don’t be rushed into signing off payment of the incentive too quickly, because often you will find things happen a few months down the line which meant that you shouldn’t have paid that incentive. Once you’ve paid it, it’s very difficult to get it back. “There will always be an excuse as to why there aren’t rebates in this

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Client Servicing

Take your time: Don’t be rushed into signing off payment of the incentive too quickly, warns Rutherford

Everyone says ‘My contract is just about perfect’ but I bet there are gaps in each and every contract that each and everyone of you has market. ‘We’ve taken the rebates and we’ve built them into the new media prices because we don’t get rebates any more’. Just think about it. Rebates tend to get paid at the end of the year or the year after. Why would a media owner do that? Why would he pull it into the pricing and not do that at the end of the year or the year after? Remember, media owners need the cash, as well as the agencies. “Beyond that, look at audit rights. You’ll often hear that the agency says you can audit the agency, but it has the right to choose the auditors. Or you can only use the big four audit companies. “Now that has two interesting things there. One is that the big four audit companies don’t have the industry expertise, they don’t have the specialists in-house to be able to do the audit properly.

“Secondly most of the audit companies audit the agency groups anyway, so how can they work on behalf of the client as well as work on behalf of the holding company? There’s something wrong there. “Make sure you have the right to audit the group. Remember the old story called ‘the million dollar pencil story’ where a media owner buys from one part of the group, from stationery, and pays a million dollars for it. Actually all it is doing is paying the rebate to a part of the group. You may be auditing your media agency, but the rebate is being paid somewhere over there. You have to find a way of really protecting yourself from that. “In any production work, there’s always reserve. The amount of times the reserve doesn’t get paid back or isn’t

even asked for by the marketing teams is beyond a joke. Check for that. Media credits “This really is a common one. This is where an agency invoices the client for space, but hasn’t been billed or paid the media owner. So that then goes into what’s then called a media credit and out into a media credit balance account. It sits there for two years. After two years, generally you don’t have the right to audit. It just goes into the agency accounts. That’s worthwhile checking. And again, always check the conditions of some of the small media. “As I say, don’t change your agencies, change the way you manage them. As most of the big agencies work in the same way, It’s much more about the teams you have on your business. It’s about keeping them motivated, incentivised. Keeping them honest. “Keep your bosses on board, particularly if you are into a serious discussion with the agency about remuneration or pitching or whatever. You need ‘air cover’ as they call it. Make sure that top management knows what’s happening.

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C l i en t S e r v ic i n g

Multitasking: It takes a lot to manage all the relationships within marketing services says Rutherford

…when we started to look at TV production, every TV production quote was like a Spielberg film. “Continuous and relevant KPIs; make sure you can measure those. Often you’ll need a resource to help you do that. Embrace procurement through that. “Be prepared to challenge the agency and change your agency if the challenge doesn’t work … but only as a last resort. “One of the other major things that I learnt is it’s very easy to get close to the agency, but that isn’t necessarily a good thing. It can make life very difficult for you down the line, if you have to challenge the agency. “I used to say that there are two lots of marketing services: Core marketing services, which were all about brand building – creative agencies, media agencies etc. But you also hire noncore marketing services on an ad-hoc basis to ensure that the core marketing services are doing the right job. You need auditors to check that the

media pricing is right, financial auditors to make sure their compliance is correct, remuneration specialists to help you negotiate etc. This was actually quite an investment in time. It took a lot to manage all those relationships, as well as the core marketing service relationships. “Anyway, my company, Axiology, has pulled four of those together. These are the four companies. “Fairbrother Lenz Eley is a media benchmarking company, media auditing company. Beekman Associates is an agency remuneration and benchmarking company. It has data from 70 countries around the world from most agencies. It can tell you the cost of a creative director in San Francisco vs New York vs Buenos Aires vs Shanghai. “It can also tell you the average commission rates by most markets.

“Firm Decisions is the financial auditor. It is made up of independent specialists, most of them qualified accountants, qualified auditors, who also have worked in agencies. And finally Mavis & Co, a production cost consultant. “Interestingly Fairbrother and the others call themselves media auditors. They are not auditors. “They are benchmarkers. They look at the prices, benchmark them into either what you’ve been promised or into databases or whatever. They’re not financial auditors. “Firm decisions are financial auditors. When those guys go in and do a financial audit and compare it to a media audit report, you’ll often find there is a discrepancy. “Actually, we had an example from the GCC. We did a financial compliance with a media report informing the audit, and there were millions, literally millions of loss/value and cash returns because of that audit. So it’s a very complex area, and the specialists are far better than any of us generalists in this. “Thank you for listening.” n

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Advertising

Who do you think you’re talking to? With many Arabs today asserting national pride, do marketing communications need to change their tone? Tarek El Jundi reports.

“Whenever someone would ask me, ‘Where are you from?’…I’d say, ‘Fairfax County’. But a professor walked by my office last week and said, ‘Are you Egyptian?’ And, for the first time in my life, I said ‘yes’.” Khalid El-Arini, a doctoral student, Carnegie Mellon, February, 2011. As national pride and self empowerment is asserted across the Arab world, has the time come for brands to revolutionise marketing communications too? “I never ever bought the argument that great creative work was only suited for western markets. The latest Arab revolutions just confirmed that exact same point when it comes to government,” says Hubert Boulos, head of strategic planning, JWT Dubai. “However,” he adds, “we have learned new things by observing events. Compared to the rest of the world, Arabs seem to be bolder these days and communications have to take that into account. Shouldn’t we

address these consumers who risked their lives for change, in a manner that better recognizes such boldness and courage, as opposed to delivering bland messages?” Marketers must now talk to the consumers in a less collective tone “as it is best for brands to engage in the conversation,” adds Kamil Kuran, CD, Leo Burnett Beirut. Dimitri Metaxas, executive regional director, Omnicom, inserts a note of caution. “These moments in history should not be hijacked for commercial purpose. people power

Bolder JWT Dubai Hubert Boulos

Caution: CD of Leo Burnett Beirut Kamil Kuran

“A blatant commercial message would backfire, and quite rightly so.” Perhaps the most iconic example of effective communication during times of turmoil came during the 2006 war on Lebanon – Leo Burnett Beirut’s Broken Bridge Johnnie Walker billboard. This campaign assured people that their brands “believe in their country as much as they do,” recalls Kuran. “We managed to convey messages of hope, via a couple of prominent brands, that Lebanon will survive no matter what happens. “It was not a message to try and sell something, more a message by the respective brands to engage with people and tell them that the brands they love are part of the fabric of their society and believe in their country as much as they do. “Brands today need to interact with people as people and not as consumers.” A recent example comes from Memac Ogilvy Tunisia – see GMR, March, page

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8 – which, sensing a post-revolutionary anti climax – created a virtual world where consumers could imagine their ideal country. “We needed to find a way to encourage the people to get back to work and start rebuilding the country we had all fought for,” said Nicolas Courant, creative director. “To do so, we strongly believed that we all had to focus on what we want for Tunisia, rather than look back nor complain about the present.” The saliency of campaigns such as this, at this particular time, is amply illustrated through the Third Annual ASDA’a BursonMarsteller Arab Youth Survey, released last month. (See News Plus, page 20) The attitudinal survey canvassed 2000 18 to 24 year olds in the GCC, Lebanon, Jordan, Egypt and Iraq. It revealed the single greatest priority for youth in the Middle East is living in a democratic country. And it can be no co-incidence that the IAA Kuwait Chapter’s Young Creative Challenger is themed ‘democracy’. When asked about how optimistic they are domestically and financially, 66 per cent of survey respondents said their country is headed in the wrong direction. National mood then, for the time being at least, has taken a much more serious turn, but will advertising complement that? Egyptian ads, for example, have traditionally often relied on goofy humour – typically the angry man being the archetypal Egyptian citizen and the kid being silly, insecure and overweight, such as in the Coke Zero campaign. Then there’s the phenomenally successful viral Panda ads; or the Melody Hits ad depicting Egyptians singing western songs using anything but rhythm, followed by a caption using bad English to amplify the humour. Funny? Yes. Butis that type of humour appropriate at this time? Now that the mood has changed in Egypt, “the current situation requires marketers to fine-tune their marketing activities and be more tactful in their tone. Communica-

Walk tall: Brands need to show they believe in the people’s country, says Leo Burnett’s Kamil Kuran

…these moments in history should not be hijacked for commercial purposes… tion must be inspirational. It must instill national pride,” says Karim Khouri, MD, Impact BBDO Cairo. (An Egyptian journalist, speaking on condition of anonymity, is contributing to an investigation into the best way to launch campaigns to promote social activism, for example.) Despite all this Leo Burnett’s Kuran does not subscribe to the theory that revolution necessitates an overthrow of the marketing status quo as well. “I wouldn’t say marketers need to new voice

Opinion: Memac Ogilvy Tunisia’s Nicolas Courant

Fine-tune: Impact BBDO Cairo’s Karim Khouri

change their tone, but marketers need to engage with people as people, given any situation.” What is beyond dispute is that Arab society is changing radically. As Boulos points out: “Agencies never act on their own, they always act on behalf of their clients. Any communication strategy has to be specific to a brand’s needs. There is no way one can set up a rule on how to communicate during and after revolutionary times for a brand. The only kind of communication I can think of is more related to crisis management if a brand has been too much associated with a failed regime.” There is, however, one area in which agencies should play a crucial role, he adds. “They have to help countries emerging from a revolution get back on their feet. That means reassuring foreign investors and businesses and attracting back tourism, which in many cases is a vital part of the economy. “I truly believe that no other industry is better equipped to do that.” n

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Style

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S e c T O r a n a LY S I S

fragranceS anD cOSMeTIcS scenting a change in the fragrance and cosmetic sector for the better, GMr sources the factors behind the healthy outlook. Positively glowing Looking good Under the skin On the scent camera ready Parc analysis Parc data

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A rosy glow

The fragrance and cosmetic sector has weathered the economic storm to emerge relatively unscathed. The fragrance and cosmetic industry remained stable in the GCC last year as the impact of the global financial crisis started to subside. A number of countries in the region appeared unbowed by the economic slow down, namely Saudi Arabia, which remained “very high and dynamic,” says Sana Toukan, senior research analyst at Euromonitor International. According to Toukan, leading suppliers in the kingdom appeared unfazed by the downturn in 2009 and instead continued aggressively with their marketing activities into 2010, including product launches, innovation and advertising and promotional activities. “International companies such as Unilever, Procter & Gamble, Beiersdorf, Colgate-Palmolive Arabia, ChesebroughPond’s, Dabur India and Gillette, as well as leading local suppliers such as Arabian Oud Co, led these activities, while the number of newcomers continued to invade this market of high potential,” says Toukan. The UAE also saw healthy growth in 2010, fuelled by several factors. The most important is the high per capita income that most Emirati consumers enjoy, which had seen a notable decline in 2009. “Furthermore aggressive company activities conducted by several multinationals present in this environment contributed to performance, as did the healthy socio-demographic factors and continual development and modernisation of distribution,” concludes Toukan. For market heavyweight Estée Lauder, all GCC markets showed growth, “even the UAE,” says Stefan Herzog, VP and GM, Estée Lauder Companies in the Middle East and India. “Dubai as a

The glossies: Cosmetics and fragrances in the UAE saw healthy growth in 2010, says Euromonitor

city was challenged due to consumers being more careful in their spending, but other emirates more then made up for this,” he says. While low consumer confidence impacted volume and value growth rates in 2009, Euromonitor estimates that sales in colour cosmetics in the region’s two largest markets – the UAE and Saudi Arabia – will have reached $116.1 million, and $279.5 million respectively by the end of 2010. facing facts

Masstige: Peter Widmann, Max Factor, Procter & Gamble

Definitive figures are yet to be released, but Euromonitor also expects full-year figures in Qatar and Kuwait to reach $14.7 million and $20.3 million respectively. Sales in Oman are expected to reach $36.4 million, and in Bahrain $10.1 million. The region’s fragrance sector, too, will report similar growth rates for last year. Total sales in Saudi Arabia are estimated to reach $783.6m, in the Emirates $202.3 million, and in Oman $39.89 million. Kuwait, Qatar and Bahrain are also expected to post increases in total sales to $32.8 million, $11.9 million and $6.9 million for 2010. Purchasing power appeared steady last year, with a shift in sales from prestige to “masstige” cosmetic brands. Representing a halfway point between mass and class, masstige products managed to deliver successful results across the

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S EC T O R ANA L Y S I S

Making scents of it all: Consumer awareness increased last year, with many becoming well informed about their products

In Kuwait … the proliferation of music channels and increasing popularity of pop stars has affected consumer preferences region as more consumers looked for value for money. Mass products are expected to account for 54 per cent of total cosmetic sales during 2010, Euromonitor data estimates, with premium brands claiming 46 per cent. “Due to the crisis, consumers definitely shifted their purchasing decisions from prestige to masstige cosmetics brands,” says Peter Widmann, marketing manager for colour cosmetics at Max Factor, Procter & Gamble. “Consumers in the Gulf have very high standards for quality and innovation, but they have also realised during the crisis that they don’t need to spend a fortune to get great quality and innovation.” Max Factor reported continued growth across the Middle East last year, with rates across all segments – face, eyes, lips and nails – increasing by five to 10 per cent. While a country-specific breakdown is unavailable, latest figures from P&G show net sales in Eastern

Europe, the Middle East and Asia accounted for 42 per cent of the group’s total sales last year ($33.14 billion), which reached $78.9 billion. Value-added features, such as long-lasting effects, natural ingredients and packaging innovation, also formed a key part of the happy anniversary

Beiersdorf is realigning the Nivea brand in its 100th anniversary year. With the strategy, it will focus on its core competence on skin care, placing Nivea at its centre. A comprehensive activation package supporting the NIVEA realignment will begin its implementation phase in May.

decision-making process for consumers last year. “Value-added benefits were very important to consumers this year and last year,” adds Widmann. “A woman with a high standard of beauty will not sacrifice on the quality of her cosmetics. The Arab woman is a very demanding cosmetics consumer as well, and her look needs to withstand the harsh elements of the desert – heat, sand and dust. Brands that offer high quality performance at a reasonable price are very much in demand.” For Estée Lauder’s Herzog, added benefits was an important factor for consumers both last year and “one we continue to drive this year”. Consumer awareness also increased last year, with many becoming more sophisticated, savvy and well informed about their products. The influence of celebrities also impacted sales. In Kuwait, for example, the proliferation of music channels and increasing popularity of pop stars has affected consumer preferences and attitudes. In a bid to claw greater market share, multi-nationals and regional players continually use them as brand ambassadors. Similarly, in Qatar, women prefer international brands that are advertised by famous celebrities.

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Montreux, Switzerland 8-10 May 2011

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S EC T O R ANA L Y S I S

Chart-topper: The influence of celebrities impacted sales positively

…in Qatar, women prefer international brands that are advertised by famous celebrities. Price points varied between luxury and mass brands over the course of the year. For mass brands, such as Max Factor, the colour cosmetics market sustained price points, “though we did see an increase in promotional activities, such as gifts or products with purchase,” says Widmann. “In the masstige segment, taking prices down as a response to the crisis can erode category value – value-added consumer offers are a great way to drive brand equity and brand trial without eroding the category value.” Meanwhile, Estée Lauder Companies – owner of Clinique, Jo Malone, M.A.C makeup, and Bobbi Brown – increased some prices for select product categories due to “increased operating costs, shipping, manufacturing, market standard and inflation,” says Herzog. Product distribution remained relatively unchanged with beauty specialist retailers and supermarkets leading on all fronts.

“Both channels played a significant role in boosting sales of many products, particularly fragrances, colour cosmetics and men’s grooming,” says Euromonitor’s Toukan. The strong development of these channels across the region, both in terms of the number of outlets and selling area, is expected to continue boosting sales across the Middle East this year and next. Supermarkets account for more than 60 per cent of cosmetic sales in the UAE and 31.5 per cent of fragrances. Health and beauty retailers account for 27.6 per cent and 45.5 per cent in cosmetics and fragrances respectively. Kuwait tells a slightly different story. Fragrances make up 23 per cent of the country’s $134 million toiletries and cosmetics industry and colour cosmetics 15 per cent. Cosmetics are usually bought from independent specialists and mixed retailers such as department stores.

Despite the economic slowdown, many suppliers were also brave enough to maintain their levels of ad spend last year. Spend in the GCC and Levant totalled $115 million last year, according to PARC. Scents and fragrances made up 43 per cent of total ad spend last year, with cosmetics among the top spending product category; L’Oreal, P&G and Unilever being the leading advertisers in the region. “Lebanon is the top spending market in the region on the sector followed by the UAE, Saudi Arabia, Kuwait and Egypt in order of their spending on the category,” says Shaharyar Umar, product manager for PARC. “TV has replaced magazines as the most preferred channel in 2010. The share of TV spending among media type last year was 54 per cent, compared to 33 per cent in magazines. Newspapers enjoy only 12 per cent of the monitored media share. The share of other media is negligible as of now.” So, with all of these factors, – healthy growth, little movement in price and ongoing advertising spend – it seems the region’s fragrance and cosmetic landscape is geared up for a prom ising 2011. n

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S E C TOR A N A L Y S I S

Looking good

The region’s intense predilection for fragrances and cosmetics ensures a healthy outlook for the coming years.

After a buoyant performance in the fragrance and cosmetic industry last year, experts are anticipating a promising 2011. In the GCC alone, total sales are expected to exceed $1.6 billion by year-end, $500 million in colour cosmetics and $1.13 billion in fragrance sales. According to Euromonitor International, by year-end 2014 the sector could increase by 15.1 per cent to reach annual sales of $1.88 billion – $578.5 million in cosmetics and $1.3 billion in fragrances respectively. Growth prospects Saudi Arabia’s F&C sector is set to report the biggest increase in sales this year, with total sales reaching $1.1 billion, of which cosmetic sales will account for $292.3 million this year.

Fragrances, meanwhile, are forecast to jump from $821 million in annual sales this year to $939.2 million by the end of 2014. The UAE, too, will report strong sales figures, with the fragrance sector reaching $213 million this year and $248.2 strong performers

Roots: David Crickmore, CEO Amouage

Increase: Kamal Osman Jamjoom, Mikyajy

million in 2014. Oman and Kuwait will see total market sales reach $79.6 million and $55.5 million respectively in 2011, increasing to $91.1 million and $63.4 million annually by the end of 2014. Total sales in Bahrain and Qatar are expected to reach $23.9 million and 23.3 million this year, and $29.9 million $25.9 million by 2014. Products expected to experience most movement in 2011 are eyes and nails “as younger women start challenging make-up brands with more interesting and trendy looks,” says Peter Widmann, marketing manager, colour cosmetics at Max Factor, Procter & Gamble. “Most of the countries in the Arab world show strong promise for 2011, especially in the GCC, but also in North

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Africa, despite recent events. The most promising product areas will be those that introduce strong innovation.” With growth, however, comes challenges. Competition across colour cosmetics is expected to intensify due to the expanding retail landscape and strong economic recovery. For mass brands such as Max Factor, Widmann says challenges include “sustaining category value in the face of increasing competition, a changing retail environment moving from traditional trade to big retailers, and shifting consumer habits as a younger population of more informed and engaged consumers enters the category.” Retail landscape The colour cosmetics segment continues to be dominated by international brands and manufacturers. However, in the UAE domestic players have proved themselves highly capable of grabbing a portion of sales, with Kamal Osman Jamjoom – owner of the Mikyajy brand – increasing its value share from three per cent in 2005 to more than five per cent by the end of 2009. Similarly, Saudi Arabia, albeit a little slower, has experienced a rapid expansion in terms of the number of outlets and product variety offered by retailers active in private label offerings – such as Mikyajy, Faces, Paris Gallery and Gazzaz. Domestic manufacturers are notably present in fragrances as a result of increased demand for Arabian perfumes. This heightened interest in Middle Eastern-inspired fragrances has presented domestic players with a greater opportunity on their home turf, and in overseas markets. In May 2010, Omani House of Amouage opened its first stand-alone store in the UAE, followed by the opening of its first branch in Europe in July. While the firm already sells its products within high-end retailers across Europe, the US and Russia, the opening of the London store marked the first step in Amouage’s plans to go global.

Tips and toes: Total sales of mass brands are forecast to exceed $1.6 billion by year-end

Products expected to experience most movement in 2011 are eyes and nails… David Crickmore, CEO, Amouage, says both openings are a key step in the firm’s “expansion strategy to open mono brand stores in key opinion-forming cities throughout the Gulf, Europe and the US.” He adds: “What sets us apart is longevity. We have always remained true to our roots with an aim to be timeless, not trendy. We never compromise on quality or creative integrity.” Saudi-based Arabian Oud, which already has a strong international presence, accounts for more than 30 per cent of fragrance sales in Saudi Arabia, boasting a 35 per cent market share at the end of 2009. In the UAE, major domestic manufacturers Ajmal, Rasasi and Designer Shaik, together accounted for 21 per cent of total fragrance value sales in 2009, with Ajmal holding a retail share

of nine per cent, the second largest in fragrances after L’Oreal Middle East FZE. And like its international counterparts, Ajmal remains one of the most prolific fragrance houses, regularly promoting limited-edition line extensions. Market trends Impetus is building behind the latest marketing concept, Arabian oud. While the fragrance sector typically welcomes thousands of new launches every year, it seems more manufacturers are incorporating Middle Eastern scents into their products, such as amber and oud. Christian Dior, Guerlain, Tom Ford and L’Artisan have all followed this fragrance direction by adding oud to their prestige list of ingredients. Most recently, Georgio Armani launched a Prive Oud Collection and Jo Malone

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S E C TOR A N A L Y S I S

Local hero: Oman’s Amouage has always remained true to its Middle East roots, despite its international expansion

unveiled its Oud and Bergamot scent, part of its Intense Cologne Collection. Local and faith-based tourism will also favour the ‘oud movement’ as many visitors prefer to purchase gift perfumes due to the huge variety in terms of both fragrance and price. Changes are also taking place in the halal cosmetic industry. Latest figures show halal beauty products account for $500 million of the $2 trillion global halal market. And while western brands are seeking to prove their commitment to the Muslim consumer, the market is facing tougher scrutiny to meet buyers’ expectations. “Being pork- and alcohol-free is no longer satisfactory for the discerning consumer,” says Dr Mah Hussain-Gambles, founder of Saaf Pure Skincare, A UKbased halal cosmetics brand. “Like the west, there is a green movement going on in the halal industry where consumers are starting to look beyond ‘halal-washing’ and at the quality of ingredients used in so-called halal products. They also want ingredients which do not harm the body in their halal consumables. Natural or organic is the next development in halal.”

Premium vs mass While a shift from premium to masstige is expected, markets such as Saudi Arabia are likely to experience greater sales in prestige fragrance brands. According to Euromonitor, premium fragrance sales are forecast to reach $714 million this year and increase to $818.7 million by 2014. Sales in mass brands are expected to reach $107 million this year and $120.3 million in 2014. And while most TV-advertised brands in Saudi Arabia have included mainly mass offerings over the years, thus supporting a shift to mass products, the impact on luxury brands was marginal. brighter future

Halal: Dr Mah Hussain-Gambles, Saaf Pure Skincare

Dynamic: Sana Toukan, Euromonitor

This indicates that a large proportion of wealthy Saudi females are still willing to spend lavishly on having premium brands – either for prestige or brand loyalty. The cosmetics industry in the kingdom differs slightly. Figures up to 2009 show that the gap between premium cosmetics and mass products is closing, with the market split 55 per and 45 per cent respectively, compared to a 62.5 per cent and 37.5 per cent split in 2004. “Mass remains the larger share in the sector for skincare and cosmetics, but it’s not clear whether this is a new shift for consumers or remnants from the downturn,” says Stefan Herzog, VP and GM of Estée Lauder Companies in the Middle East and India. But for this year, he adds: “As everywhere else in the world, the consumer is expecting the best products at the best price, delivered with the best service. We and our retail partners need to assure that we can match this expectation.” For Sana Toukan, senior research analyst, Euromonitor, demand for mass products will remain very high in 2011, while premium offerings remain profound in the market “as people across the region, especially in Saudi Arabia and the UAE, continue to enjoy a high disposable income.” n

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S ECT O R A N A L Y S I S

GMR Exclusive: Skin deep

Performance trumps price in the UAE and Saudi Arabia where skincare is a major priority, says new study from Kaya Skin Clinic.

A recent survey among women in the UAE and Saudi Arabia, commissioned by Kaya Skin Clinic Dubai, examining attitudes and behaviours towards skincare regimes, has revealed some marked differences between the two. The research revealed that while diet and hydration take precedence for maintaining good skin, the mental attitude of the user also plays a key role in achieving beautiful skin, especially among the respondents in Saudi Arabia. More than 80 per cent of the respondents in both the UAE and Saudi Arabia felt diet helps to promote beautiful skin; nearly 68 per cent of consumers in both markets felt hydration was very important, while some 60 per cent of respondents in Saudi Arabia felt mental

health played an important part. This was more subdued in the UAE with 43 per cent. Skin-deep The research also revealed that for westerners beautiful skin is more related to health and a sense of wellness, with 69 per cent reaffirming the importance of a workout for beautiful skin. Hence, quality

Waxing lyrical: Samir Srivastav – executive VP and regional head of Kaya – MENA

the services need to focus on cleansing and smoothening, with an end-effect of freshness and youthfulness. In the UAE, beauty is also strongly attributed to exercise. Similarly, a vast majority of westerners see exercise as an important requirement for beautiful skin, while a little more than one third finds that quality products are paramount. Women aged 41 to 45 years, in particular, see the need for a consultation with a dermatologist necessary for beautiful skin compared to other ages. Women aged 31 to 35 feel that skincare products are more effective in helping the skin look healthy and young. As one reaches 31 years and above, there is a stronger need for skincare

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SKIN CLINICS

Satisfaction drivers

International chain of skin clinics

Good priced promotion

Read in an article

Advertised on TV/radio/online

Advertised in leading magazines

34 8

41 17

Highly recommended by friends/family 3 7 Source: Kaya Skin Clinic Dubai, 2011. All figures in %

Recommended by blogs or forums

9 22

Least satisfied

Code 02

26 40

Code 03

Code 04

Most satisfied

Dermatologist visits 4 3

Recommended by blogs or forums

Read in an article

Advertised on TV/radio/online

Advertised in leading magazines

Highly recommended by friends/family

Source: Kaya Skin Clinic Dubai, 2011. All figures in %

42 16

6 21 21

Least satisfied

Code 02

3 4

Code 03

Code 04

Most satisfied

Beauty habits (top moments requiring extra skin care) UAE

73 73 61

KSA

81 83 77

Locals (UAE/KSA)

72 72

Expat Arabs

70 67 68

55 61

Westerners

83 85

For parties you will attend Marriage When you see the first signs of ageing

Source: Kaya Skin Clinic Dubai, 2011. All figures in %

100

Before you hit your 30s When one is already longing for past youthfulness

Beauty services (influencers) Husband

Parent

10 63

Friends 48

Dermatologist 23

Spa staff 5

Beautician

Others 0

100

Source: Kaya Skin Clinic Dubai, 2011. All figures in %

Sample size: Females, locals, expat Arabs and westerners, aged 20 to 45 years, SEC ABC1, UAE: 300, KSA: 200. Source: 2010 The Neilsen Company

Dermatologist part of a known skin clinic

Trusted peers

products. Nearly 70 per cent of respondents feel that beautiful skin leads to increased confidence. However, the research also pointed out that the spurt of products in the market definitely affects the preferential trends among the target audience. Women, it seems, prefer the latest technologies, but they are also overwhelmed with the number of products in the market – nearly 60 per cent of respondents say product options are confusing. Another noteworthy aspect is the comparatively low levels of knowledge among women of the various skin types, pointing to a need for more education. Nearly 13 per cent of respondents in Saudi Arabia are not satisfied with their skin, particularly younger women. Primarily, skin-based treatments are centred on occasions, the study said, emphasising that the majority of women undergo beauty services before marriage, functions, parties and other celebrations. More than 70 per cent pamper their skin before a party/celebration. Younger women are more inclined towards specific event/celebration skin preparation, while, as they get older, this is coupled with preparation against skin ageing. The research also pointed out that a majority of women in the region identified unwanted facial hair as a major problem, followed by dark circles around the eyes and blackheads. The key take-out is that specialised packages of depilatory as main offering with acne treatment for younger market, while depilatory should be paired with anti-ageing for older respondents, the study inferred. On deciding upon a treatment and brand, quality is seen as the most important factor in the purchasing decision, followed by clinical or brand recommendation. Price is the least dominant factor. “The survey clearly pointed out the need for more anti-ageing and skin peels, as also skin clearing and smoothen-

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S ECT O R A N A L Y S I S

Ever used Facial wash Facial moisturizer Sunscreen cream Hair removal products Cleansing milk Whitening products Cleansing mask/purifying mask Peel off mask Facial scrub Eye contour/eye care Anti-ageing products Toner/astringent Products for acne Oil-free products

94 89 79 78 51 42 42 39 38 32 30 27 25 15

Past 3 months usage 93 86 78 77 47 40 41 37 35 30 29 25 22 13

Past 4 weeks usage 90 85 75 75 42 33 34 29 31 27 28 20 15 9

Past 7 days usage 86 80 68 29 35 26 16 10 12 21 24 17 10 6

Facial wash Facial moisturizer Hair removal products Sunscreen cream Cleansing milk Peel off mask Toner/astringent Cleansing mask/purifying mask Facial scrub Eye contour/eye care Whitening products Anti-ageing products Serum/essence Products for acne Oil-free products

Source: Kaya Skin Clinic Dubai, 2011. All figures in %

Penetration rate

Retention rate

98% 96% 95% 94% 86% 83% 82% 81% 79% 78% 78% 77% 73% 68% 65%

96% 96% 96% 95% 82% 74% 74% 81% 82% 84% 79% 93% 63% 60% 60%

Important considerations Value for money

Affordable

High quality Recommended by friends/family

Recommended by dermatologists

Service from a famous skincare/facial care chain 0

10 UAE

79 80

Source: Kaya Skin Clinic Dubai, 2011. All figures in %

KSA

100

Significant difference

Beauty Products (Top of mind facial care products) 3

Cleansing milk

4 4

Products for acne Anti-aging products

Whitening products

Sunscreen cream

10 12

Facial moisturizer

27 44 44

Facial wash 0 Source: Kaya Skin Clinic Dubai, 2011. All figures in %

10 UAE

KSA

50 Significant difference

Sample size: Females, locals, expat Arabs and westerners, aged 20 to 45 years, SEC ABC1, UAE: 300, KSA: 200. Source: 2010 The Neilsen Company

Beauty products (product usage)

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Attitude in skin care I am embarrassed about excessive hair on my body

2 7

I am concerned about the effects of the sun on my skin

Beautiful skin is for everyone â&#x20AC;&#x201C; not just for models

11 3

I spend time on skin care even if I am busy

I would like to spend more time taking care of my skin compared to what I do today

70 39

15 6

Having beautiful skin gives you confidence

11 3

Strongly disagree

Decision process

38 21

Having beautiful skin makes people take notice of you

Source: Kaya Skin Clinic Dubai, 2011. All figures in %

Who influences? Beautician Friends Dermatologist In-store advisors Family members TV ads Online Mother

9 10

73 Disagree

Neither agree nor disagree

Agree

Strongly agree

Beauty Habits (Satisfaction on oneâ&#x20AC;&#x2122;s skin) Total 65 58 53 46 45 26 15 13

UAE 73 59 46 54 42 18 14 10

Source: Kaya Skin Clinic Dubai, 2011. All figures in %

KSA 53 58 65 32 51 37 16 19

41-45 years 36-40 years

14 15

31-35 years

26-30 years

20-25 years

Westerners

Expat Arabs

Locals

KSA

9 15

10 10 9

13 2

UAE

Extremely satisfied Somewhat satisfied Somewhat dissatisfied Dissatisfied

11 5

Total Source: Kaya Skin Clinic Dubai, 2011. All figures in %

10 46

2 2

10 1

Neither satisfied nor dissatisfied

Sample size: Females, locals, expat Arabs and westerners, aged 20 to 45 years, SEC ABC1, UAE: 300, KSA: 200. Source: 2010 The Neilsen Company

S ECT O R A N A L Y S I S

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27794oc GMR 280x215 11/03/2011 10:55 Page 1

S E C T O R A N A LY S I S

top skin problems

Unwanted facial hair Dark circles Blackheads Pimples/acne Dull/stressed skin Unwanted body hair Age signs/wrinkles Enlarged pores Excess oiliness Dark spots Redness Pigmentation/uneven skin tones Source: Kaya Skin Clinic Dubai, 2011 All figures in %

Total

UAE

KSA

Locals

Expat Arabs

Westerners

20-25

26-30

31-35

36-40

41-45

55 42 40 39 33 33 31 29 28 27 27 22

60 29 32 38 39 36 37 30 32 28 35 24

47 62 51 41 24 29 23 29 23 25 14 20

61 43 44 44 34 34 24 35 32 27 19 23

60 41 37 32 33 38 36 26 26 26 34 23

10 41 27 41 27 15 51 14 20 27 39 20

52 40 50 64 26 35 7 34 28 30 24 15

56 42 37 50 37 27 18 24 30 22 29 22

57 37 39 38 31 34 34 29 33 29 28 19

56 49 35 15 36 38 52 30 25 23 30 31

49 43 33 21 37 30 59 29 25 30 21 27

Significant difference

BEAUTY HABITS (DESCRIPTIONs OF BEAUTIFUL SKIN)

Clear skin Smooth skin Fresh skin Young skin Healthy looking skin Clean Pure Natural Flawless Wrinkle-free skin Source: Kaya Skin Clinic Dubai, 2011. All figures in %

Total 505%

UAE 305%

KSA 200%

Locals 271%

Expat Arabs 175%

Westerners 59%

20-25 124%

26-30 101%

31-35 100%

36-40 117%

41-45 63%

66 63 56 52 48 47 44 42 42 41

68 60 59 54 56 43 45 41 44 46

63 67 52 50 36 54 42 45 39 35

64 66 65 53 43 49 45 42 42 38

69 55 47 47 45 46 45 38 39 37

66 68 42 63 85 42 32 54 49 71

66 67 56 52 46 55 40 43 40 35

59 67 60 49 44 49 48 53 42 28

70 62 54 56 53 43 43 38 48 55

65 57 55 50 48 38 40 34 37 46

71 57 56 57 54 56 51 44 46 44

Significant difference

…quality was the prime factor shaping the customers’ decision to go for a service … ing, with an end-effect of freshness and youthfulness. “Interestingly, the survey also found that quality was the prime factor shaping the customer’s decision to go for a service or product, with the price being the least important factor,” Samir Srivastav, executive VP and regional head of Kaya, MENA, told GMR. Women in the UAE are most concerned about quality. Other key influencers are beauticians (73 per cent), followed

by friend’s recommendations and then dermatologists. In Saudi Arabia, however, the key influencer is recommendations from dermatologists (65 per cent). Beauty products Top-of-the-mind recall for facial beauty products are: facial wash (44 per cent), followed by hair removal, moisturiser, sunscreen and cleansing milk. Trusted peers and a clinical authority are the

main influencers for facial services, especially in Saudi Arabia, where 53 per cent of respondents would have their facial services at home. In the UAE, however, 39 per cent – the majority of them younger – prefer to visit salons. A further breakdown reveals that majority of Westerners (more than 51 per cent) want to go to salons for facial services, compared to locals/expatriate Arabs, who prefer their homes. Among the services availed are facials (67 per cent) and waxing (68 per cent) – focusing on skin ageing and skin peels. In depilatory services, women in Saudi Arabia

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Beauty Habits (requirements for beautiful skin) 83

Diet 78 68 68

Hydration

Mental health

25 16 20 5 5 2

Home remedies

6 8 33

Skin care products 0

Source: Kaya Skin Clinic Dubai, 2011. All figures in %

44 38

30 UAE

40 KSA

50 Locals

Expat Arabs

100

Significant difference

Westerners

CUSTOMER’S MIX AND REQUESTS For women without major skin problems (%) Use of moisturiser cream 40 40 Sun screen cream Facial 30 10 Enhancement services Cleaner 10 Toner 10 5 Mesoglow 5 Very superficial growing skin Skin maintenance 5 Anti aging 5 5 SPF

Expat Arabs Acne and spot treatment Sun protection Pigmentation Laser hair removal

35 20 10 5

Westerners Anti-aging Botox Fillers Pigmentation Sun protection

Locals More skin conscious /more care for the skin Sun protection Laser hair removal Pigmentation

60 45 35 20 20

25 25 20 15

Source: Kaya Skin Clinic Dubai, 2011.

prefer halawa (88 per cent), while in the UAE more than 40 per cent would opt for waxing. Westerners, in general, are more open to waxing – more than 50 per cent. Product effectiveness, integrity and expertise in skin dryness are the top considerations among women in Saudi Arabia when choosing a dermatologist. Respondents in the UAE, however, not only look for effectiveness, but also need reassurance regarding experience and reputation. In another interesting insight into the role of technology in skin treatments, a massive 94 per cent prefer to use the latest in technology and are pre-

pared to pay a premium as long as they are effective. A majority agree that proper skin care and use of technology can help fight/ reduce/reverse the signs of ageing. “As one gets older, there is a stronger need for more than diet and exercise to achieve beautiful skin, with expertise from dermatologists,” the research said. “This research with Nielsen went a long way in understanding the prevalent trends in skincare, hair removal and anti-ageing and maps our equity across the verticals,” said Dr Mohammad Dallah, specialist dermatologist at Kaya Skin Clinic. “These insights help companies

Sample size: Females, locals, expat Arabs and westerners, aged 20 to 45 years, SEC ABC1, UAE: 300, KSA: 200. Source: 2010 The Neilsen Company

32 31 43

Dermatologist consultation

Exercise

87 85

research and develop products in line with customers’ preferences, tastes and needs,” concluded Srivastav. n About the survey The face-to-face research, conducted for Kaya Skin Clinic, was carried out by Nielsen. Five hundred respondents – 300 in the UAE and 200 in Saudi Arabia including 60 westerners in the UAE – took part. All female respondents spent a minimum $133 (SAR/ AED500) a month on skincare products or procedures. Kaya Skin Clinic operates 13 clinics across the region.

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s e c t o r a n a ly s i s

Scentimentality

‘Perfume’ is a very popular search phrase in the UAE. our analysis of the fragrance market brings together search engine data, as well as comments on blogs, forums, websites and social networks platforms in the UAE. Our market analysis identifies the most commonly searched-for key phrases. The search volume is important because it lets marketers know what consumers are typing in when they are searching for information on fragrances, and is an accurate indication of the potential market, showing the amount of searches in any one month. Fragrance brands whose websites rank high for the key phrase “perfume” get a proportion of the 27,100 searches that occurred last month landing on your website. The top-10 key phrases were all generic, with “perfume” by far the most searched for. Searches for brands such as “Nina Ricci” were also represented in the list of top-20 key phrases – an indication of brands that have a high recognition. Interestingly, local hero Ajmal also showed a relatively high volume of searches, so it was included in our list, although it was quite interesting that Chanel did not show

higher volume; it is the top-selling perfume in the world. Perhaps it’s indicative of different tastes within different markets? We then used the top searched-for key phrases to collect all comments in blogs, forums and social media that included one of those terms in the past 12 months. In total, 4,185 comments were identified on the topic of perfumes, fragrances or any other of those top searched-for terms. Analysis of the mentions showed that “Chanel” was by far the most talked about and had the most amount of buzz, and the average sentiment expressed was positive. Other brands that showed above-average amounts of buzz were D&G, Jean Paul Gaultier and Gucci. Although Gucci showed a slight skew towards negative sentiment expressed, most of the comments were about Gucci Guilty, with quite a few people asking for recommendations, such as “did u guyz try the new fragrance of gucci ‘guilty’ ?!!”, providing an opportunity for brands to get into the conversation. Further evidence of local tastes for Arabian perfumes were seen in some of the comments: “the gucci perfume is 325dhs

for the small one i think...i didn’t buy it though – i bought an arabian perfume”. Finally, brands such as Nina Ricci, Estee Lauder, Davidoff, Prada and Sarah Jessica Parker showed the most positive average sentiment, however these were based on lower volumes. Brand recognition for Nina Ricci seemed very high with so many searches for the brand and product name in the UAE, however the volume of discussion was quite low, albeit with a very positive sentiment. The overall picture was positive, which is perhaps not surprising given that luxury brands such as these should evoke mostly positive emotions. The recognised top-selling scent, however, was the one that consumers talked about the most, but was not the most searched for; Chanel. n

Lee Mancini head of Sekari SEO Dubai

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Search & Social Market Analysis Fragrances Top 20 keywords fragrance market # 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Keyword (UAE) Perfume Perfumes Fragrance Essence Perfume for Men perfume Perfume for men Perfume men Parfum Scent Nina Ricci Nina Ricci Nina Nina by Nina Ricci Fragrances Ajmal Perfumes Perfume for women Perfume women Perfumes for men Men perfumes Perfumes chanel

Top fragrance brands by volume of social media sentiment. Search volume 27,100 12,100 2,400 1,900 1,900 1,300 1,300 1,300 1,300 1,000 720 720 720 720 720 720 720 590 590 590

Search Engine Results Pages (SERPS) Research conducted on Google.ae. Top 20 keywords with the most amount of searches last month based on local results from Google.ae

Brand Chanel D&G Jean Paul Gaultier YSL Gucci Armani Ajmal Calvin Klein Tom Ford Ralph Lauren Prada Dior Vera Wang Bulgari Diesel DKNY Davidoff Issey Miyake Estee Lauder Kenzo Versace Juliette has a Gun Sarah Jessica Parker Nina Ricci Hugo Boss

Sentiment 0.30 0.48 0.26 0.27 -0.09 0.37 0.78 0.18 -0.09 0.00 1.00 0.89 0.13 0.13 0.86 0.67 1.00 0.80 1.20 0.50 0.33 0.33 1.00 1.50 0.00

Volume 40 27 23 22 22 19 18 17 11 10 9 9 8 8 7 6 6 5 5 4 4 3 3 2 2

4,185 total number of mentions regarding generic purfume-related phrases Brand mentions over 12-month period from February 2010

Source: Sekari SEO 2011

Social media â&#x20AC;&#x201C; Volume vs sentiment graph 30

HIGH VOLUME NEGATIVE SENTIMENT

Chanel (40 mentions with 0.30 sentiment) D&G

HIGH VOLUME POSITIVE SENTIMENT

25 Jean Paul Gaultier

Gucci 20

Armani

Number of mentions

Ajmal Calvin Klein

15 Tom Ford

Dior Bulgari Diesel Vera Wang DKNY

Ralph Lauren

Versache Juliette has a Gun Hugo Boss

LOW VOLUME NEGATIVE SENTIMENT -2.00

-1.5

Source: Sekari SEO 2011

-1

-0.5

0 Range of sentiment

Prada

Davidoff Estee Lauder Issey Kenzo Miyake Sarah Jessica Nina Ricci LOW VOLUME Parker

POSITIVE SENTIMENT

0.5

1.5

April 2011 Gulf Marketing Review 71

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UAE

SAUDI ARABIA

KUWAIT

OTHERS

GRAPHIC DESIGNER

MEDIA CONSULTANT

GRAPHIC DESIGNER

INTERIOR DESIGNER

Qualification: Degree in relevant discipline Experience: 2+ years Experience Skills: Strong communication skills Strong command of English & Arabic Strong computer skills

Qualification: Degree in Marketing Experience: 2+ years Experience Skills: Strong teamwork skills Excellent communication skills Strong command of English & Arabic

Qualification: Degree in Fine Arts Experience: 2 - 3 years Experience Skills: Strong communication skills Strong command of English & Arabic Strong creative skills

Qualification: Degree in Interior Design Experience: 2 - 3 years Experience Skills: Excellent communication skills Strong interpersonal skills Proﬁcient in Auto CAD, Photoshop & Illustrator

Job Reference:JB1644869

Job Reference:JB1631617

Job Reference:JB1645680

Job Reference:JB1647333

SENIOR GRAPHIC DESIGNER

INTERIOR DESIGNER

ART DIRECTOR

Qualification: Degree in relevant discipline Experience: 3 - 5 years Experience Skills: Excellent creative skills Strong leadership skills Experience in a similar role

Qualification: Degree in relevant discipline Experience: 3+ years Experience Skills: Strong analytical skills Strong command of English & Arabic Ability to work under pressure

Qualification: Degree in relevant discipline Experience: 3+ years Experience Skills: Strong leadership skill Excellent communication skills Excellent creative skills

Qualification: Degree in Advertising Experience: 5+ year Experience Skills: Excellent time management skills Excellent presentation skills Strong photographic skills

Job Reference:JB1300120

Job Reference:JB1629989

Job Reference:JB1617863

Job Reference:JB1463818

INTERACTIVE ART DIRECTOR

DIGITAL ART DIRECTOR

ART DIRECTOR

GRAPHIC DESIGNER

Qualification: Degree in relevant discipline Experience: 1 - 3 years Experience Skills: Strong time management skills Strong communication skills Ability to work under pressure

Qualification: Degree in relevant discipline Experience: 5+ years Experience Skills: Strong leadership skills Strong creative skills Strong experience in a similar role

Qualification: Degree in relevant discipline Experience: 3+ years Experience Skills: Strong presentation skills Strong communication skills Strong experience in a similar role

Qualification: Degree in relevant discipline Experience: 0+ years Experience Skills: Excellent organizational skills Strong communication skills Proﬁcient in Auto CAD, Photoshop &

Job Reference:JB1639263

Job Reference:JB1613904

Job Reference:JB1638530

Job Reference:JB1645682

GRAPHIC DESIGNER

INTERIOR DESIGNER

PHOTOGRAPHER

CREATIVE/ART DIRECTOR

Qualification: Degree in relevant discipline Experience: 2-3 years Experience Skills: Excellent command of English Strong creative thinking skills Strong creative skills

Qualification: Degree in Fine Art Experience: 5+ years Experience Skills: Strong command of English & Arabic Strong computer skills Strong communication skills

Qualification: Degree in relevant discipline Experience: 3+ years Experience Skills: Strong customer relation skills Excellent command of English & Arabic Strong artistic back ground

Qualification: Degree in Art and Design Experience: 10+ years Experience Skills: Strong communication skills Strong organizational skills Strong problem solving skills

Job Reference:JB1640126

Job Reference:JB1622248

Job Reference:JB1617958

Job Reference:JB1623632

COMMUNICATIONS SPECIALIST

GRAPHIC DESIGNER

INTERIOR DESIGNER

TV GRAPHIC DESIGNER

Qualification: Degree in relevant discipline Experience: 3 - 4 years Experience Skills: Strong teamwork skills Strong communication skills Strong organizational skills

Qualification: Degree in relevant discipline Experience: 2+ years Experience Skills: Strong computer skills Strong organizational skills Strong communication skills

Qualification: Degree in Interior Design Experience: 8+ years Experience Skills: Strong planning skills Excellent command of English & Arabic Strong presentation skills

Qualification: Degree in Graphic Design Experience: 3 - 5 years Experience Skills: Ability to work under pressure Strong creative skills Strong communication skills

Job Reference:JB1638714

Job Reference:JB1373722

Job Reference:JB1612657

Graphya

Promate Technologies

Piranha Byte

Client Advertising

Multinational FMCG Company

Job Reference:JB1640194

Siemens

Reservoir

Akeel Saatchi & Saatchi

Alfanar Company

Futures Business Development

Ali Abdulwahab Sons & Co

menahunter2000(Lebanon)

Orangerie

JWT Damascus (Syria)

Intermarkets Kuwait

Lagoon Hotel & Resort (Jordan)

Soroh Bu KHamseen

Al Jazeera Children's Channel (Qatar)

Midas Furniture

Al Madina (Syria)

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UAE

SAUDI ARABIA

KUWAIT

OTHERS

GRAPHIC DESIGNER

MEDIA CONSULTANT

GRAPHIC DESIGNER

INTERIOR DESIGNER

Qualification: Degree in relevant discipline Experience: 2+ years Experience Skills: Strong communication skills Strong command of English & Arabic Strong computer skills

Qualification: Degree in Marketing Experience: 2+ years Experience Skills: Strong teamwork skills Excellent communication skills Strong command of English & Arabic

Qualification: Degree in Fine Arts Experience: 2 - 3 years Experience Skills: Strong communication skills Strong command of English & Arabic Strong creative skills

Qualification: Degree in Interior Design Experience: 2 - 3 years Experience Skills: Excellent communication skills Strong interpersonal skills Proﬁcient in Auto CAD, Photoshop & Illustrator

Job Reference:JB1644869

Job Reference:JB1631617

Job Reference:JB1645680

Job Reference:JB1647333

SENIOR GRAPHIC DESIGNER

INTERIOR DESIGNER

ART DIRECTOR

Qualification: Degree in relevant discipline Experience: 3 - 5 years Experience Skills: Excellent creative skills Strong leadership skills Experience in a similar role

Qualification: Degree in relevant discipline Experience: 3+ years Experience Skills: Strong analytical skills Strong command of English & Arabic Ability to work under pressure

Qualification: Degree in relevant discipline Experience: 3+ years Experience Skills: Strong leadership skill Excellent communication skills Excellent creative skills

Qualification: Degree in Advertising Experience: 5+ year Experience Skills: Excellent time management skills Excellent presentation skills Strong photographic skills

Job Reference:JB1300120

Job Reference:JB1629989

Job Reference:JB1617863

Job Reference:JB1463818

INTERACTIVE ART DIRECTOR

DIGITAL ART DIRECTOR

ART DIRECTOR

GRAPHIC DESIGNER

Qualification: Degree in relevant discipline Experience: 1 - 3 years Experience Skills: Strong time management skills Strong communication skills Ability to work under pressure

Qualification: Degree in relevant discipline Experience: 5+ years Experience Skills: Strong leadership skills Strong creative skills Strong experience in a similar role

Qualification: Degree in relevant discipline Experience: 3+ years Experience Skills: Strong presentation skills Strong communication skills Strong experience in a similar role

Qualification: Degree in relevant discipline Experience: 0+ years Experience Skills: Excellent organizational skills Strong communication skills Proﬁcient in Auto CAD, Photoshop &

Job Reference:JB1639263

Job Reference:JB1613904

Job Reference:JB1638530

Job Reference:JB1645682

GRAPHIC DESIGNER

INTERIOR DESIGNER

PHOTOGRAPHER

CREATIVE/ART DIRECTOR

Qualification: Degree in relevant discipline Experience: 2-3 years Experience Skills: Excellent command of English Strong creative thinking skills Strong creative skills

Qualification: Degree in Fine Art Experience: 5+ years Experience Skills: Strong command of English & Arabic Strong computer skills Strong communication skills

Qualification: Degree in relevant discipline Experience: 3+ years Experience Skills: Strong customer relation skills Excellent command of English & Arabic Strong artistic back ground

Qualification: Degree in Art and Design Experience: 10+ years Experience Skills: Strong communication skills Strong organizational skills Strong problem solving skills

Job Reference:JB1640126

Job Reference:JB1622248

Job Reference:JB1617958

Job Reference:JB1623632

COMMUNICATIONS SPECIALIST

GRAPHIC DESIGNER

INTERIOR DESIGNER

TV GRAPHIC DESIGNER

Qualification: Degree in relevant discipline Experience: 3 - 4 years Experience Skills: Strong teamwork skills Strong communication skills Strong organizational skills

Qualification: Degree in relevant discipline Experience: 2+ years Experience Skills: Strong computer skills Strong organizational skills Strong communication skills

Qualification: Degree in Interior Design Experience: 8+ years Experience Skills: Strong planning skills Excellent command of English & Arabic Strong presentation skills

Qualification: Degree in Graphic Design Experience: 3 - 5 years Experience Skills: Ability to work under pressure Strong creative skills Strong communication skills

Job Reference:JB1638714

Job Reference:JB1373722

Job Reference:JB1612657

Graphya

Promate Technologies

Piranha Byte

Client Advertising

Multinational FMCG Company

Job Reference:JB1640194

Siemens

Reservoir

Akeel Saatchi & Saatchi

Alfanar Company

Futures Business Development

Ali Abdulwahab Sons & Co

menahunter2000(Lebanon)

Orangerie

JWT Damascus (Syria)

Intermarkets Kuwait

Lagoon Hotel & Resort (Jordan)

Soroh Bu KHamseen

Al Jazeera Children's Channel (Qatar)

Midas Furniture

Al Madina (Syria)

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SECTOR ANALYSIS

Camera Ready

The region’s continued fixation on premium beauty brands is reflected in the high volume of media coverage. The Middle East is a key market for retailers across the world, says a January 2011 RNCOS report. Retail has been one of the fastest-growing sectors in the region for the past few years. Favourable government policy frameworks and active participation of a private sector have helped the region become one of the world’s most desirable retail environments. Changing consumer demographics in countries such as Saudi Arabia and the UAE, large expatriate populations, improving purchasing power, and abundance of petro dollars have attracted premium and luxury brands to the region.

Consumers have developed bigger appetites for beauty products, compared with other markets. According to Euromonitor International 2010, the beauty market in the Middle East, worth $7.2 billion in 2008, managed to defray the impact of the global credit crunch, while sales in western countries slowed. The report, published in June 2009, reports that the cosmetics and toiletries sector grew by eight per cent, the highest in the past five years. Saudi Arabia recorded the biggest value of sales in 2008, at $2.2 billion. Beauty experts in the UAE confirm the trend, saying most consumers have not reduced their purchases of creams,

cosmetics and other beauty enhancers, despite the downturn. An article on DubaiBusinessPages.com says that demand in Dubai is growing at a frantic pace. Not only is there a huge pent-up demand for premium products from Europe and North America, but also for the entire range of beauty and personal care products from major manufacturers around the world. The sector is also one of the largest business sectors in Dubai as importers, exporters and retailers of cosmetics and toiletries are not only meeting the demand within the UAE, but supplying several export and re-export markets such as the rest of the GCC, Iran,

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Penetrations – February 2011 Language Arabic English Genre Lifestyle & General Interest Celebrity & Society Fashion & Shopping Women's News & Politics Bridal Magazines Catering & Hospitality Entertainment & Listings Teenage & Children's Men's Students Market UAE Pan Arab Qatar Kuwait Saudi Arabia Bahrain Lebanon Syria Jordan Egypt France International Media Types Magazine Newspaper Website

Bourjois 62 49

Chanel 109 41

Christian Dior 130 36

Clarins 60 39

Lancome 68 28

MAC 82 61

Makeup 63 41

YSL 85 28

84 19 7 4 0 0 0 0 0 0 0

124 12 12 6 1 1 0 0 0 0 0

134 11 17 5 7 0 2 0 0 0 0

84 4 5 3 1 0 0 2 2 0 0

80 7 10 2 1 0 0 0 0 0 0

101 15 19 3 2 2 2 0 0 0 0

71 13 13 8 0 0 0 0 2 0 1

93 13 2 3 4 0 1 1 0 1 0

57 17 5 11 4 6 12 2 0 0 0 0

32 70 1 12 11 6 19 2 1 1 0 1

22 75 4 24 7 7 28 3 2 2 2 0

25 44 1 5 3 4 12 2 4 0 0 1

17 50 1 14 4 1 7 0 4 0 2 0

54 35 5 10 6 14 6 3 7 2 0 0

26 31 0 19 2 9 13 1 3 3 1 0

34 56 1 7 8 1 6 1 2 1 0 1

112 0 2

155 0 1

171 5 0

100 0 1

100 0 0

143 1 0

108 0 0

117 1 0

Source: Mediastow February 2011

the CIS region, Africa and the Indian subcontinent. As a result, Dubai has acquired the status of a leading distribution hub for cosmetics and fragrances in the Middle East.

erage and OTS, but achieved higher MCS (Magazine Coverage Size) figures than Dior, with 44.7 pages relative to 40.2. Bourjois achieved the lowest OTS at 4.2 M, with no NCS. Its MCS of 31.93 pages was the lowest. MAC achieved the highest MCS with 107.44 pages. Penetrations The overall trend saw the breakdown of coverage in terms of languages for all brands, putting Arabic in the lead, followed by English, French and Mandarin. Most of the coverage was from Pan Arab publications,

followed by the UAE, Kuwait and Lebanon. The exception was Bourjois, which had higher UAE coverage then Pan Arab. Chanel and Dior were heavily diversified in terms of market penetration, while Bourjois was the least diversified. ‘Lifestyle and general interest’ publications followed equally by ‘celebrity and society’ and ‘fashion and shopping’ were the most popular publication genres for the eight brands. Other genres had the attention of various brands. YSL dedicated coverage to ‘Men’s’, while Makeup Forever focused on ‘Students’ and ‘Teenage and children’.

Media coverage Facets of coverage We took a close look at eight luxury cosmetics brands’ coverage in February across the MENA region: Bourjois, Chanel, Christian Dior, Clarins, Lancome, MAC, Makeup Forever and YSL. All eight achieved higher coverage than other cosmetics brands. Christian Dior achieved the highest volume of coverage, relative to the other seven brands. Dior also achieved the highest OTS figures with 11.9 M, as well as the highest NCS (Newspaper Coverage Size) figures with 225 cc (column centimetres). Chanel was second in terms of volume of cov-

...the beauty market in the Middle East...managed to defray the impact of the global credit crunch, while sales in western countries slowed.

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SECTOR ANALYSIS

FaCeTs oF CoVeraGe – February 2011 VOC (Volume of Coverage)

OTS (Opportunities to See)

114 156 176 101 100 144 108 118

4,246,183 10,612,747 11,898,716 7,819,805 7,240,245 7,272,974 5,330,519 8,753,296

Bourjois Chanel Chrisitian Dior Clarins Lancome MAC Makeup Forever YSL

NCS (Newspaper Coverage Size) 0 28 225 0 0 95 0 28

MCS (Magazine Coverage Size) 31.93 44.7 46 36.51 40.2 107.44 52.1 36.55

CLiPPinG TyPes breaKDoWn – February 2011 Advertorial

Photo Caption

Product Placement

Press Release

Q&A

46 124 116 84 58 88 104 76

4 40 40 16 32 65 21 36

98 62 48 38 42 12 10 59

0 0 0 0 0 1 8 0

0 2 3 1 1 6 1 0

Bourjois Chanel Christian Dior Clarins Lancome MAC Makeup Forever YSL Source: Mediastow February 2011

Dubai has acquired the status of a leading distribution hub for cosmetics and fragrances in the Middle East. Chanel and MAC dedicated some coverage to bridal magazines. The majority of coverage came from magazines, while websites and newspapers had very little to none in some instances. Dior has the highest newspaper penetration. Content analysis Chanel achieved the highest volume of advertorial coverage (124), while Bourjois achieved the highest product placements. MAC achieved the highest volume of photo captions as well as Q&As, while Makeup Forever achieved the high-

est volume of press release coverage publicising its participation at Cairo Film Festival. Interestingly Makeup Forever, despite its relatively lower ranking in terms of crude media coverage measurements, achieved the highest prominence values (taking into consideration content dedication, tonality and visuals size), relative to the other seven brands. Lancome achieved the lowest prominence value, while YSL, Dior and Chanel were slightly above Lancome. Bourjois, MAC and Clarins achieved relatively high prominence values.

Conclusion To properly evaluate effective reach, one has to consider a host of variables, from content, prominence, penetrations’ breakdown, high volume of coverage and OTS figures, coupled with press release coverage as further diversification. Overall, market analysis indicates a booming sector and the coverage indicates high competition and high media presence. It would take a considerable boost in the variables mentioned above to truly stand out as the industry leader from the print/web media perspective. ■

Hisham Elzubeir, research director, Mediastow, Dubai

76 Gulf Marketing Review April 2011

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ÂŠ arabianEye.com

s e c t o r a n a ly s i s

Scent of victory In the battle between oriental and international brands Saudi males are leading the charge ... but for how long? This region holds the unique distinction of having four markets â&#x20AC;&#x201C; Lebanon, the UAE, Qatar and Saudi Arabia â&#x20AC;&#x201C; within the top 10 markets for women perfume/ body fragrance among 60 global markets, says Target Group Index (TGI) surveys. The survey, which took place in the MENA region and conducted by PARC during March 2011, found significantly higher consumption of male fragrances for both the oriental and international brands. In Saudi Arabia, where 38 per cent of the total adult population perceive skincare products to be for women only, a 2010 PARC/TGI survey found a staggering 95.2 per cent of males use fragrance.

Between 2009 and 2011 there has been a paradigm shift towards international brands in Saudi Arabia. Consumption of oriental fragrances among Saudi adult males dropped from 78 per cent in 2009 to 75 per cent in 2011. By comparison, international brands surged from 65 per cent in 2009 to 82.5 per cent in 2011. Not only is the consumption of international brands now higher in Saudi Arabia, frequency of usage is higher too. Some 55 per cent of total adult males in the UAE use international brands at least four times a week, versus 41 per cent who use oriental brands at the same rate. Meanwhile, 26 per cent of total adult males in Saudi Arabia use international

brands more than up to three times a week and are classified as medium users. Consumption in the oriental category is higher at 32 per cent. Heavy users are defined as those whose usage exceeds four times a week. For medium users it is between three times a week and twice a month. However, loyalty among oriental users, ie consumers sticking to any one brand in the category, is higher at eight per cent than that of international brands, at 5.3 per cent. Consumption in the UAE among adult males for international fragrances in 2009 was 55 per cent. For oriental brands it was 22 per cent. Around 45 per cent of users of international male brands in the UAE

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Higher oriental male fragrances, higher international male fragrances

International fragrances

120

100

120

Oriental fragrances

Higher oriental male perfumery, higher international male perfumery Working in semi-private sector Non Arab expats Level 1 (top 10%) upper class

Higher oriental male fragrances, higher international male fragrances

Heavy television viewers Arab expats Level 3 (next 30%) middle class

Working in private sector Working in government sector Heavy internet users

Heavy radio listening Heavy print readers Level 2 (next 20%) upper middle class

Not doing a paid job Nationals/locals Self employed

are aged 30 to 44 years, while oriental fragrance users are mainly 45 years-plus, and significantly more loyal to those brands than those who use international male fragrances and like to experiment with brands. The average credit card spend among men in Saudi Arabia preferring oriental that those preferring global brands. This group consumes both types of brands. And, as can be seen from the quadrant map above, Saudi nationals have more affinity towards regional brands, while non-Arab expats display a positive affinity towards international brands and very low affinity towards oriental brands. High consumers of regional brands are locals, self employed or not doing a paid job. They also exhibit positive affinity towards print, internet and radio. Affinity and likelihood are not, however, necessarily related to size of consumption. International brand users may exhibit higher affinity for internet than newspapers, but it is also likely that the total number

Saudi nationals have more afﬁnity towards oriental perfume… of readers using international brands are greater; 15 to 17 year olds, for example, have very high affinity towards internet, but their size is less when compared to the 29- to 45-year-age group reading newspapers. Around 21 per cent of the total adult males consuming international male brands use internet on mobiles, compared to 16 per cent for oriental perfume. Similarly, 21 per cent of male users of international brands are more likely than the average male to use mobile TV, while 31 per cent of adult male users of oriental perfume are less likely than the average adult male to use mobile TV. The most popular oriental fragrances by type, and consumption, in Saudi Arabia are, in descending order: Dahn Al Oudh, Mukallats French Attar and French Spray.

The top three brands in Saudi Arabia are: Al Arabian Oud, Abed Samad Al Quraishi and Mamoud Saeed. In the near future, it is likely that the male personal care market will grow and be led by international players and a further strengthening of retail sector. The above table refers to all adult (15 years and over) males in Saudi Arabia, including Arab nationals, Arab expats and non-Arab expats, excluding unskilled workers. The total sample size is 7,000. ■

shaharyar Umar analyst, Pan Arab research centre (PArc). the views expressed in the article are those of the author, and not necessarily those of PArc.

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s e c t o r a n a ly s i s

The comeback trail

Regional ad spend on fragrances hit a top note in 2010, reaching a record $165 million. Beauty brands are beginning to spend again. Spend on fragrances peaked at an all-time high of $165 million in the region, gaining 37 per cent in 2010, and witnessing a sharp recovery after an 18 per cent fall in 2009. Pan Arab media dominates spend with a 69 per cent share in the sector after surging 44 per cent year-on-year in 2010. Saudi Arabia tops the league having increased its spend by 14 per cent. The UAE follows closely with an uptick of 42 per cent last year. Kuwait is third having increased its spend by 13 per cent. Lebanon is ahead of other markets and ranks as the fourth biggest spender in the category, with a 22 per cent increase in spend. Other market variations are Oman (+38 per cent), Qatar(+150 per cent), Bahrain (-13 per cent). Egypt and Jordan bucked the trend, however, dropping by 39 per cent and 37

per cent respectively. Major advertisers continue to invest heavily in TV, where share has increased to 72 per cent in 2010, up from 66 per cent in 2009, as spend on fragrances surged by 49 per cent. Magazines lost four per cent and their share plummeted to 16 per cent in 2010, down from 22 per cent in 2009. Newspapers share six per cent of the spend among measured media. The share of male fragrances is around 29 per cent, while the share of female fragrance is around 45 per cent. The rest of the category spend, ie 26 per cent, is targeted at both genders. The top five spenders, in order, are: Gucci Guilty, The One, Hugo Boss, Armani Code and Flora-Gucci. The top TV spenders are: The One, Hugo Boss and Gucci Guilty. Top spending brands in magazines are: Idylle, Burberry Sport and Gucci Guilty, while the top spenders in newspapers are: Play, Gazzaz and Burberry Sport.

The top five male brands are: Euphoria, Armani Code, Play, Hugo Boss and Allure Home Special. The top five female brands being: Parisienne, Gucci Guilty, Coco Mademoisele and Turquoise. According to a recent TGI survey in Saudi Arabia, around 93 per cent of the adult population uses either an international or oriental perfume or fragrance. Higher spending, rather than costcutting, may indicate that the sector is regaining its confidence. Spend is calculated on the media rate cards and does not account for incentives and discounts that advertisers may avail from media owners. n

Shaharyar Umar analyst Pan Arab Research Centre, UAE

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CATEGORY: FRAGRANCE & COSMETICS Millions US$425

Markets Ranking & Media Split (000 US$) Television Rank Market Name & Abbreviation 2008 1 2 3 4 5 6 7 8 9 10 11

Pan Arab Media Lebanon United Arab Emirates Kindom of Saudi Arabia Kuwait Egypt Oman Qatar Bahrain Jordan Other Markets** Total All Markets

PAN LEB UAE KSA KWT EGY OMN QTR BAH JOR OTH

2009

%Var’n 2010 YTD

207,300 244,196 304,554 28,112 29,505 39,659 27,476 21,710 27,202 25,915 20,790 23,847 14,251 17,395 15,773 2,827 2,768 3,570 2,663 1,697 2,169 1,326 1,056 1,529 1,062 899 636 468 380 424 5,269 4,617 5,556 316,669 345,013 424,919

25 34 25 15 -9 29 28 45 -29 12 20 23

%Var’n YTD

2010

290,432 26 36,548 38 6,956 27 1,176 -28 8,562 -2 1,881 180 0 -100 290 28900 0 -100 0 4,217 28 350,062 27

Newspapers 2010 0 270 1,880 5,163 1,760 384 1,914 534 146 250 317 12,618

Magazines

%Var’n YTD -100 79 23 5 -12 27 45 80 -25 46 -9 12

Radio

%Var’n YTD

2010 14,122 2,171 12,293 11,585 5,350 521 255 514 455 174 956 48,396

2010

-1 -2 9 10 -9 -32 -2 3 0 -16 0 2

0 0 11 3 40 469 0 0 0 0 66 589

Outdoor

%Var’n YTD -100 -92 100 49 -100 340 19

Cinema

%Var’n YTD

2010 0 670 5,644 5,920 61 315 0 191 3 0 0 12,804

+23%

2010

%Var’n YTD

0 0 418 0 0 0 0 0 32 0 0 450

39 87 61 -92 -56 -26 50 -100 43

-84

-21

**Other markets: Combined - Syria, Yemen & Arasian

Ranking of markets and media split (000US$) 100%

Category split by market 1% 1% 1% 4%

75% 50%

Pan Arab Lebanon UAE KSA Kuwait Egypt Oman Others

6% 9% 72% 6%

25% 0%

Total GCC LEV PAN LEB UAE KSA KWT EGY OMN QTR 424919 380943 43976 304564 39659 27202 23847 15773 3570 2169 1529

Television

Newspapers

Magazines

Radio

BAH 636

Outdoor

JOR OTH 424 5556

Cinema

SPLIT BY PRODUCTS – 2010 All Markets 39%

30%

1% 3%

Pan Arab Media 27%

37%

GCC Markets 41%

31%

Facial wash Skin care male

Scents & fragrances Skin care cream Cosmetics A

Facial wash Skin care male

Levant Markets 28% 26%

27%

Scents & fragrances Cosmetics A Skin care cream

Scents & fragrances Skin care cream Cosmetics A

Facial wash Skin care male

59%

Cosmetics A Skin care cream Scents & fragrances

16% 19%

Facial wash Sun screen

TOP BRANDS – ALL MEDIA (000 US$) – 2010 Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Brand Pond’s Olay Fair & Lovely Max Factor Vaseline L`Oréal Dermo Maybelline Nivea Garnier Skin Nat Lancome Gucci Guilty The One Rimmel Hugo Boss Clearasil Vichy Dove L`Oréal Clean & Clear Armani Code

Pan Arab Media Value 33,862 27,382 26,540 17,351 15,625 15,009 14,809 14,216 12,156 6,534 6,514 6,486 6,206 6,191 6,001 5,695 5,328 4,890 4,791 4,473

Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Brand Pond’s Fair & Lovely Olay Vaseline Max Factor Maybelline Nivea L`Oréal Dermo Garnier Skin Nat Clearasil The One Rimmel Hugo Boss Gucci Guilty Dove Clean & Clear Lancome Flora Gucci Armani Code Gucci Sport

GCC Value 30,853 24,226 23,338 13,900 12,569 11,341 10,211 9,536 8,406 6,001 5,890 5,754 5,623 5,594 4,831 4,608 3,734 3,653 3,446 3,289

Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Levant Brand Pond’s Olay Fair & Lovely Vaseline Max Factor Nivea Maybelline L`Oréal Dermo Garnier Skin Nat Gucci Guilty The One Hugo Boss Rimmel Clearasil Dove Lancome Clean & Clear Flora Gucci Euphoria Gucci Sport

Value 33,862 27,380 26,223 15,625 15,052 13,034 11,401 10,233 8,824 6,510 6,486 6,175 6,052 6,001 5,328 4,821 4,681 4,367 3,714 3,685

Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Brand Vichy L`Oréal Dermo Maybelline Garnier Skin Nat Mohsense Zein Al Atat Garnier Max Factor Lancome L`Oréal Parisienne Nivea Armani Code Neutrogena Red Pearl Coco Mademoisele B-white Clipp Johnson Fair & Lovely

Value 5,429 4,776 3,408 3,332 2,665 2,430 2,398 2,299 1,713 1,453 1,398 1,182 832 640 528 481 457 380 319 317

Source: PARC

All market

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DIARY

GMR Event: Marketing to Women

Women 24/7: So, where’s your brand when she needs it? Whether she’s young, older, married, single, professional or housewife, local or expat, female consumers are more pre-occupied than ever in today’s always-on era. Nowhere is this more evident than in the Middle East where advances in socio-economic status, along with the seismic impact of digital media, are reshaping women’s personal agendas, the structure of their daily lives, their brand relationships, and profoundly altering their need-states. Understanding core needs is key to effective, sustainable marketing communications. The 5th annual GMR Marketing to Women Conference will deconstruct conventional marketing wisdom to help unearth fresh insights, new attitudes and behaviour as part of a deeper drill into what women really need from your brand…and chances are it’s not what you think. This one-day conference will highlight emerging global trends, provide the latest tools and techniques to help marketers connect more deeply with one of the region’s most influential consumer bases. Promising exclusive research, packed with insights, thoughtleadership and case studies, Women 24/7 will help regional and global brands communicate more effectively and create deeper and longer-lasting relationships with the region’s female consumers. 5th Annual Marketing to Women Mediaquest Corp Date: May 31 Location: The Address Hotel, Downtown Dubai, UAE T: +971 4 3910760 W: gmr-online.com/m2w.php

April 3-day MBA in Social Media Terrapinn Date: April 3-5 Location: Dubai T: +44 (20) 76087068 W: theMBATraining Company.com The 5th Annual Wedding Show 2010 Events Unlimited Date: April 8-10 Venue: Zara Expo, Amman, Jordan T/F: +962 6 5656550 Mobile: +962 79 5742492 W: eventsunlimited.com.jo Developing and implementing a successful CSR strategy IIR ME Date: April 10-13 Venue: JWT Marriott, Dubai T: +971 4 3352437 W: iirme.com/csr Strategic Marketing Planning IIR ME Date: April 17-20 Venue: JW Marriott, Dubai T: +971 4 3352437 W: iirme.com/mktg planning Planet of the Apps Arabia 2011 Terrapinn Date: April 18-20 Venue: One & Only Royal Mirage, Dubai T: +971 4 4402500 W: terrapin.com/2011/ mobappsarabia/index.stm Middle East Film & Comic Con ExtraCake PRA Date: April 29-30 Venue: Abu Dhabi National Exhibition Centre

T: +971 4 2293311 F: +971 4 2293321 W: http://www.mefilmandcomiccon.com/ May Project Qatar IFP Expo Date: May 2-5 Venue: Doha Exhibitions Center T: +961 5 959111 W: ifpexpo.com Successfully Managing Marketing Teams IIR ME Date: May 29-June 1 Venue: Pullman Hotel, Mall of the Emirates, Dubai T: +971 4 3352437 W: iirme.com/mktgteams June The Middle East Event Show IIR ME Date: June 1-2 Venue: Dubai Intl Convention & Exh Ctr T: +971 4 3365161 W: me-events.com ICSC/MECSC John T. Riordan Global School for Professional Development (for retail real estate) MECSC Date: June 5 – 9, 2011 Location: Dubai, UAE T: +971 4 3597909 W: mecsc.org July Project Management for Special Events IIR ME Date: July 3-6 Venue: Kempinski Hotel, Mall of the Emirates, Dubai T: +971 4 3352437 W: iirme.com/eventmgt

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cartier.com

calibre de cartier 1904 MC MANUFACTURE MOVEMENT

AS ITS NAME SUGGESTS, THE CALIBRE 1904 MC IS THE EMBODIMENT OF A CENTURY OF CARTIER’S PASSION FOR TECHNICAL EXCELLENCE. FEATURING AN AUTOMATIC MOVEMENT CREATED, DEVELOPED AND MANUFACTURED BY CARTIER, THE CALIBRE DE CARTIER WATCH TAKES THE GREATEST WATCHMAKING TRADITIONS TO MORE STYLISH AND SOPHISTICATED HEIGHTS. STEEL 42 MM CASE. MANUFACTURE SELF-WINDING MECHANICAL MOVEMENT, CARTIER CALIBRE 1904 MC (27 JEWELS, 28,800 VIBRATIONS PER HOUR, DOUBLE-BARREL, BIDIRECTIONAL WINDING SYSTEM), SUBSIDIARY SECOND, DATE APERTURE. STEEL HEPTAGONAL CROWN. SILVERED OPALINE SNAILED DIAL. SCRATCHPROOF SAPPHIRE CRYSTAL.

FROM UAE: 800 CARTIER (800-2278437) OUTSIDE UAE: +971 4 236 8345 7 DAYS A WEEK – 11 AM TILL 8 PM

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3/30/11 10:33 AM