Iran has become the second-largest cosmetics market in West Asia in terms of revenue, despite it being a society where women are required to cover up their hair and body when outdoors.
The skin care market in particular is booming which will ultimately place the category at a value of IRR4.6 billion by 2015, according to market researcher Euromonitor.
Drivers are being indicated as a growing youth population, changes in consumer patterns, and a shift in advertising activities which has seen both international and domestic cosmetic brands successfully expand in the country by encouraging awareness of specific skin care routines by targeting pharmacologists and dermatologists.
According to market analysts, the majority of branded colour cosmetics sold in Iran are contraband counterfeit products imported from China, South Korea or Turkey.
To date, local brand owner of the Nivea and Max Factor brands 'Shekofa Kish' has remained the leading player in the highly fragmented category of colour cosmetics in Iran.
The company continues to benefit from its' very strong distribution network and the high levels consumer awareness about its brand
Cosmetics demand is seeing influx in counterfeit products however...
Euromonitor also suggests that conditions are likely to improve as a result of the $7bn in sanctions relief announced by the US. With sanction relief from the US, and those from the EU likely to be reduced by early 2014, trade will become easier and consumer spending is predicted to rebound.
The improved relationship between Iran and the West, combined with the anticipated relaxing of sanctions, is likely to make it far easier to transfer money to and from Iran, thus greatly improving trade.
However, the market researcher also says this has led to an increase in smuggling: when Procter & Gamble pulled out of the country, the gap in the market left by its Gillette and Razor brands was almost instantly filled by illicit goods.
While there are no official numbers regarding the percentage of cosmetic usage for the country, some unofficial statistics show that Iranian women are the biggest consumers of counterfeit cosmetics; these products bear famous European and US brand names but are produced in China and other countries.