In an interview with Economy Middle East, Marko Dakovic, president Health & Beauty at GMG, sheds light on the role of digitalization and e-commerce in the company’s overall plan and channel strategy to reach a broader audience. He further discusses the flourishing well-being sector in the region and its potential for future growth. Dakovic also provides valuable insights into emerging health and beauty trends expected to shape the market this year.
Health and beauty products are now increasingly available online. How do digitalization and e-commerce fit into your overall plan? What is your channel’s strategy as you aim to reach a broader audience?
Post-COVID, we’ve observed significant changes in the health and beauty market in the Middle East. Consumer behavior has been shifting towards online purchasing, impacting traditional brick-and-mortar sales. One of the key pillars in our five-year strategy, which is also part of our plan for this year, is growing our omnichannel approach and adapting to new changes happening in consumer behavior.
At the same time, there is an increasing demand for innovative health and beauty products and solutions as more consumers are adopting preventative well-being habits. By leveraging cutting-edge research and technology, GMG has developed a product portfolio. This portfolio showcases the latest advancements in the health and beauty segment, emphasizing natural ingredients.
Read more: Glowing beauty industry: Saudis, top buyers of cosmetic products
GMG’s Chairman and Founder is Abdulaziz Hassan Ali Baker. He opened the first Al Khayam pharmacy in 1978. The sole purpose of the pharmacy was to improve access to medicines in Dubai. Al Khayam was later rebranded to Supercare Pharmacy, and GMG established a full-fledged Health & Beauty division dedicated to promoting 360-degree holistic well-being.
Today, GMG’s Health and Beauty division supports its global customers’ overall well-being through nutrition, skin and body care, vitamins & supplements, and more. It has extensive expertise in retailing and distributing a vast portfolio of brands, including four concepts and distribution rights of over 80 international brands with over 100 retail stores.
We have established a strong brick-and-mortar footprint for our own concepts. These concepts include Supercare, Arabella, and Good Health. They offer a wide range of products, including pharma, sports nutrition, and vitamins and supplements. At the same time, we are growing our distribution arm. A big part of our own brands or the brands we distribute in the market are sold through other retailers. This includes some of the biggest online players in the market.
In addition, our consumers can order products by dialing 800-SUPER and get in touch with the pharmacy assistant. They can also do the same in partnership with major quick commerce (Q-commerce) UAE platforms. This partnership makes our products more accessible to consumers at the end of the day. At the same time, in response to strong consumer demand, we will soon launch our Supercare mobile application. The application aims to create a holistic omnichannel ecosystem. This ecosystem will benefit the consumer, especially for urgent medical needs. It will allow them to receive products within half an hour.
The health and beauty industry continues to show robust performance despite consumers grappling with inflation. What growth prospects are you anticipating this year, given that inflation will be a lingering concern? What are your thoughts on the growing well-being sector in the Middle East?
The health and beauty industry in the Middle East and Africa is expected to continue showing robust performance, with significant growth prospects. According to a report by GlobalData, the Middle East and Africa (MEA) health and beauty market size was $475 billion in 2022. It is expected to record a compound annual growth rate (CAGR) of more than 4 percent during the period of 2022-2027. Euromonitor International also anticipates that the Middle East and Africa beauty market will reach a revenue of $47 billion by 2027. The market is expected to experience an average annual growth rate of 12 percent.
Amongst our consumers in the UAE and other GCC countries that boast a high purchasing power, we are noticing more interest in cost-effectiveness. Consumers’ purchase decisions are also influenced by offers and promotions – they are looking for a bigger bang for their buck. Across categories like beauty, personal care, and fitness and nutrition, consumers are looking for promotions more than ever before. They are actively shopping for the best prices among all the different players in the retail market.
At GMG, we have the advantage of having a robust portfolio of high-quality, innovative products for holistic well-being. We also have strong long-term brand partnerships and an omnichannel strategy. Additionally, we have a time-tested distribution backbone. We are also working closely with our suppliers to ensure competitive pricing in response to consumer demands.
You developed and launched your own health and beauty concepts. Why did you adopt this approach, and how have your own concepts contributed to the growth of your business?
In 2021, GMG embarked on a new corporate strategy with a new brand identity and purpose-centric vision to inspire people to win in ways that make the world better. We are staunchly committed to improving people’s lives through active living, nutritious food, and good health. Today, GMG is a global well-being company. We specialize in retailing, distributing, and manufacturing a portfolio of leading international and home-grown brands. Our focus is on sectors such as sport, food, and health.
As a part of our corporate strategy, we prioritized adopting a 360-degree, holistic approach to health and beauty. Our aim is to support overall well-being through various means. These include nutrition, skin and body care, vitamins, supplements, and more. While we partner with the best brands in the well-being sector, we also introduced specialized concepts to fulfill our vision. We leverage our own distribution arm to better cater to the well-being needs of our communities.
We have four owned concepts in the Health and Beauty division at GMG: Supercare Pharmacy, Arabella, Good Health, and Glu. Supercare is our family well-being destination. Good Health focuses on supporting an active lifestyle through sports nutrition, food, and more. Arabella specializes in natural and organic products aimed at preventative care. Lastly, Glu offers clean, sustainable, and cruelty-free beauty products.
These concepts meet different consumer well-being needs and very often complement each other. For example, during the COVID period, our pharmacy business played an important role in supporting our community by supplying health-related products. However, today, we see major growth coming from categories related to beauty, fitness and nutrition. We continuously strive to cater to these consumer demands and provide options that align with consumer preferences through our owned concepts.
What health and beauty trends do you see emerging this year?
An increasing number of consumers are taking steps to improve their overall health and well-being, focusing on aspects such as sleep, nutrition, fitness, mental and physical health, appearance, and healthy aging. According to a new report from the Global Wellness Institute, a leading industry group, the global wellness economy is forecast to reach $8.5 trillion by 2027.
Gen Z and millennial consumers are driving the demand for wellness products and services, surpassing older generations, as revealed by a recent McKinsey survey. This survey also highlighted efficacy and scientific credibility as the two most important factors influencing purchase decisions for wellness products.
As individuals become more conscious of their well-being, they are increasingly seeking products that benefit both themselves and the environment. Therefore, we prioritize and highlight the unique selling propositions of our products. These include being organic, vegan, cruelty-free, and ethically and sustainably sourced. We do this to align with consumer preferences and current trends. This dedication to quality and sustainability extends across various brands in different categories, including Sigma Beauty, Bluebonnet Nutrition, The Organic Pharmacy, and many others. Additionally, in response to the holistic nature of the wellness movement, we have introduced our own beauty concept, GLU, which offers consumer products designed to provide these benefits, creating a one-stop holistic destination for all their needs.
Is there a gender divide among consumers of your products? Or are men and women equally active and conscious when making health and beauty purchase decisions? Who spends more and on which types of products?
With COVID-19 evolving from a global pandemic into an endemic disease, consumers are increasingly focusing on wellness. Consumers are approaching well-being with a more holistic mindset, focusing on nutrition, physical activity, mental health, sleep, and general self-care.
With the increased presence of the self-proclaimed health experts on social media, some consumers are growing skeptical of potential “healthwashing”, which McKinsey defines as “deceptive marketing that positions a product as healthier than it really is”. So, recommendations from certified doctors and pharmacists continue to influence purchase decisions. Additionally, recommendations from a consumer’s circle of family and friends also play a significant role.
GMG’s Health and Beauty division caters to assorted family needs; therefore, we have various categories to meet the demands of different genders and age groups. We noticed that across our brands, female consumers predominately visit stores or indirectly impact decision-making within the family. We can see this trend in UAE or GCC and many global markets. But well-being remains a priority for all our customers, and we are noticing more and more males taking a stronger interest in their personal and overall family’s wellness.
About Marko Dakovic
Marko Dakovic, the current president Health & Beauty at GMG, brings a wealth of experience to his role. Before joining GMG, he held a senior position as the Senior Director of Private Label and Overseas Buying at Nahdi Medical Company, a prominent Saudi-based organization. Prior to that, Dakovic served as the Private Brand Marketing and Strategy Manager at Serbia’s Dehaize Group. With his diverse background in the industry, Dakovic is a seasoned professional with a deep understanding of the Health & Beauty sector.
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