The United Arab Emirates’ beauty industry continues to thrive with salons expanding across major cities. This growth is being driven by a high demand for beauty treatments as a lifestyle choice, high disposable incomes, increased focus on wellness and a growing population of expats from around the world.
While this growth is positive for the industry and the region, it has lead to a highly competitive market that is fuelling a price war at the moment. The intense concentration of salons is creating a rivalry where businesses are lowering prices to fight for their customer base.
In the short term this might be good for consumers who can take advantage of the lower prices, but at what cost to quality? In addition, businesses are being hurt in more ways than one including lost profits, smaller market share and not being able to maintain lower prices.
Recently, VR Beauty Consulting saw this trend for itself when doing market research for a startup beauty client and the results were shocking! For one service the price between salons differs from AED 120 to AED 750. This is for a professional service that requires training to be performed correctly.This is a worrying market trend that can undermine the integrity of our industry and damage its reputation greatly.
We believe that a contributing factor is that many salons and home service businesses jump on a popular trend because they see it as a way to keep up with their competitors and to increase their revenue.
While we are the first to applaud businesses for recognising trends and for bringing innovation into their offerings, it is crucial to launch a new service in the right way. This entails having properly trained and experienced professionals that can deliver the service effectively and pricing it according to its true value.
Allowing unqualified staff to perform a new service at a low rate will harm the longevity of your business.
An example of this, was the shift of facials to medical centres and clinics because unprofessional, unqualified therapists were mishandling them in salons.
“Salon owners need to understand that adding a service only because it is trendy and offering it at a low price wil not lead to long-term business success. In fact it may cause more harm than good, so do the right thing, train your staff or hire experienced professionals before launching a new service,” is the advice of VR Beauty Consulting founder Valerie Reynaert.
“By providing specialised services, upholding superior hygiene, and developing skilled professionals, salons can set themselves apart from the competition. When you prioritise expertise and you deliver outstanding customer service not only can you charge fair prices but your business will thrive.”
We are pleased to see that in a step towards ensuring fair competition, protecting consumer interests and promoting long-term economic stability in the region, in July of this year, the UAE government announced a new competition law that prevents businesses from offering excessively low prices that could harm competitors. We look forward to seeing this impact our industry positively. This provides hope for a more stable and fair playing field, enabling businesses to thrive without compromising on integrity.
Until then, pricing in the current market will still remain a challenge. Salons must find a balance between staying competitive and maintaining quality and professionalism. The future of the industry lies in delivering exceptional experiences, valuing expertise, and fostering trust, ensuring that quality and sustainability lead the way.