Global beauty market resilience 2026: Growth despite challenges

The global beauty and personal care market has shown remarkable resilience despite the ongoing US/Israel-Iran war.

According to market intelligence company, Euromonitor International, the market is projected to grow by 1.8% to 1.9% annually, reaching $590 billion by 2026. While this is slightly below the pre-war forecast of 2.5%, the industry continues to adapt and thrive.

Key drivers of resilience

• Fragrance market growth: Fragrances have emerged as the primary growth driver, particularly in the Middle East. Arabian perfume brands are expected to account for 80% of the region’s top-brand value, estimated at $1.3 billion by 2025.
• Consumer behaviour shifts: Unlike the demand collapse seen during COVID-19, the war has led to inflationary pressures that are reshaping consumer spending habits. Fragrances, positioned as affordable self-care products, provide psychological comfort and wellness benefits.
• Supply chain adaptability: Inventory buffers (4 to 6 months) and continued airline operations in the GCC have helped maintain fragrance supply chains, ensuring market stability.

Challenges facing the industry

• Rising costs of ingredients and packaging due to war-driven inflation.
• Increased risks of counterfeiting and grey-market trade.
• Shifts in retail activity, with spending moving from tourists to local consumers.

Regional insights: Middle East and GCC

The Middle East, particularly the GCC, plays a pivotal role in the beauty market’s resilience. Arabian fragrance brands dominate the region, leveraging cultural preferences and strong brand loyalty. Despite disruptions, the region’s beauty market continues to grow, supported by robust local demand and strategic supply chain management.

Prospects of continued growth

Even with prolonged disruptions in the Strait of Hormuz through 2028, Euromonitor International predicts continued growth in beauty sales. A resolution to the conflict could further improve market forecasts, offering a more optimistic outlook for the industry.

For more information, check the latest report, Building Market Resilience: Applying Crisis Learnings to the Iran War.