Cosmetics Companies Testing Waters in Iran
Economy, Domestic Economy

Cosmetics Companies Testing Waters in Iran

Following the removal of western sanctions against Tehran, some of France’s biggest, best-known cosmetics brands are hoping to tap into the huge Iranian market.
While cosmetics were not barred from entering Iran under the sanctions regime, restrictions on banking transactions made it hard to do business there.
“’Made in France’ gives (brands) a real competitive edge” in Iran, said Virginie d’Enfert, economic affairs director at the French Federation of Beauty Companies (FEDEA), adding that cosmetics companies nonetheless have a lot of work to do to win over the country, AFP reported.
In 2014, German company Beiersdorf and Dutch Unilever dominated in Iran, according to London-based market research company Euromonitor.
Other foreign cosmetics brands, mainly from the United States and South Korea, are also vying for space on Iranian shelves, she added.
> Second-Biggest Cosmetics Market
French giant L’Oreal, which owns luxury brands Lancome and Yves Saint Lauren Beauty, ranked seventh in Iran, overshadowed in the rankings by local brands and Procter and Gamble from the United States.
L’Oreal’s CEO Jean-Paul Agon is not discouraged, as he opts for a slowly-but-surely strategy.
“Things are going to be done progressively” in Iran, he said.
Iran’s cosmetics market is the second-biggest in the Middle East after Saudi Arabia, grossing some $3.5 billion in 2014–and that’s without counting perfumes.
Now, as Iran opens up to the world economy, that figure is expected to triple by 2019, Euromonitor says.
“All these big, international cosmetics groups are watching the Iranian market very closely,” said Sahar Jamali, director of Aria Chic, an Iranian distributor of foreign perfumes, makeup and cosmetics at a Paris meeting on Wednesday of Iranian distributors organized by the newly-founded France-Iran Business Club.
Representatives of LVMH-owned Sephora, which operates hundreds of popular cosmetics stores worldwide, “came to Iran several times, where the company is thinking of setting up shop, but nothing has yet been done,” she said.
Iran may also offer interesting opportunities for French small- and medium-size enterprises.
For several years, a specialized skin-care laboratory called Bailly-Creat has been selling its products in pharmacies through two local distributors.
“We make 750,000 euros in Iran, that’s 30% of our cosmetics sales,” said Stephan Bisson, Bailly-Creat’s cosmetics director.
Still, as with any makeover, time and patience are essential.
It takes beauty products some four to eight months to be approved by the Iranian Health Ministry, FABEA’s d’Enfert said.
“Your choice of an exclusive local partner is key because that’s who’ll be taking charge of developing your brand in Iran,” she said.
Learning culturally-sensitive etiquette also plays a role, says Zahra Azmoudeh-Giacomini, founder of the France-Iran Business Club and president of Cosmopolitan agency, which seeks to help French companies operate efficiently in Iran.

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