With rising exchange rate over the past months, people buy more local cosmetic products. Iran has the second largest cosmetics market in MENA region (Middle East and North Africa), after Saudi Arabia.
Iran’s cosmetics market value is estimated to have been around $4 billion in 2016. Although the market is expected to grow further, latest economic turbulences can affect it to a great extent.
Not only the import of foreign brands has become more difficult these days, the import of raw material for local production is also suffering from tight foreign currency policies introduced by the government.
“Most of our raw materials, particularly Polymer products, have experienced a rise of 300% in prices”,says Alireza Kiani, a member of Tehran Chamber of Commerce. “However, the government does not permit us to increase prices by more than 15 percent”.
Cosmetics producers in Iran admits that the demand for local products has increased significantly, however, if their production costs do not meet a balance with prices, it is questionable to be able to keep production alive.
“Although the demand for Iranian products has increased by 50 percent, due to long bureaucratic procedures, our production capacity has decreased by 25 percent over the past few months”, adds Mr Kiani.
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