Africa: the next frontier of cosmetics

beauty black woman put cream on a cheek. closeup portrait. Ideal skin

The modernization of many African countries has attracted the attention of big cosmetics groups, which are already moving in the direction of Africa. A black woman takes, on average, three times more than a white woman, of her own class, to take care of her hair. She consumes nine hair products compared to a white woman, more than seven of make-up and five more of skin-care. Normal, therefore, that the giants of the cosmetics you are overlooking this area, once the prerogative of local companies, that often, work in a traditional way. In Africa, currently, international brands primarily create the distribution subsidiaries. Some countries, such as Benin, Togo, and Cameroon have sought to benefit from this situation, applying heavy taxes to the categories of products related to beauty. This initiative has caused an explosion of illegal imports and imitations, and an absolute lack of control over the products put on the market. You might think that this policy favors local companies, but things are not so. The consumers still prefer the big international brands. Start from the idea that if a product works and is successful in the United States will necessarily of good quality and then buy it even if it involves a sacrifice. The African middle class is growing, which has tripled in size over the last 30 years and the continent is driving the demand for cosmetics. Cosmetic companies are racing on the continent to grab a market share. The big multinational brands dominate the market of Kenya and Uganda, using the local production capacity in outsourcing. While, the current push towards the East African markets is also an indirect consequence of the South African market, the most mature of the continent, due to local economic difficulties observed a slowdown in demand for premium products.

African markets

Africa is a complex continent, as it combines lifestyles, ethnicities and different social and cultural situations. Currently, the continent is more than a billion people, it is expected that population growth will lead to three billion people, by 2065, most of the populations of China and India together, estimated in the same period. Therefore, considering only the estimated size of the consumers, the potential of the African market is immense. This demographic profile is positively correlated with the rise in disposable income, by 2030, the 18 most populated  African cities could have a combined spending power of $ 1.3 trillion, making the continent a target for companies seeking to grow the outside of developed countries. All the major beauty companies have implemented strategies to capture the expected boom for the beauty and personal care, in a market expected to grow to $1.8 billion by 2018. Fast growing economies such as Uganda, the major markets such as Kenya and Ethiopia, a middle class income increasing, population growth and greater urbanization, are driving the markets for cosmetics and personal care products to new heights, especially in the East African region. According to market research firm Euromonitor International, the beauty industry in the Middle East and Africa was estimated at about $25.4 billion, market will grow by 6.4 per cent a year over the next four year, the Middle East and Africa will be the fastest-growing region in beauty and personal care products. For example, the color cosmetics sector, will grow by 6% between 2016 and 2017, rising from $3,570.70 million to $3,786.40 million (the figures are preliminary).

Eastern Africa region

East Africa including Kenya, Uganda, Ethiopia, Mozambique and Tanzania, countries where the rate of development is growing, as well as the per capita income, which has ensured that demand for cosmetics products will increase. One area expansion is hair care sector, clearly the leading cosmetic product of all those sold in all east African markets. The trend among women in East Africa is not to use too many commercial hair products and hair care products, they prefer natural products, less harsh and offer smoothing benefits. Obviously, there is a shortage of such products for hair care and skin care, consumers demand products tailored to meet their needs and requirements, so the demand for “afrocentric cosmetics”. The main players in the industry, noted that they could not take the western or Asian products and sell them in Africa, have introduced new ranges, specifically designed to meet the specific needs of African consumers, with prices of mass products and several brands available. The prerequisite to effectively deliver the right products for African consumers, is to better understand the specificities African skin and hair. For example, L’Oreal has launched the «L’Oréal Institute for Ethnic Hair and Skin Research» in Chicago, and has also set up an assessment center in South Africa dedicated to the study and understanding of consumer development. Another strategy, used by the cosmetic industries operating in East Africa, is to create smaller sized packages to counter the price sensitivity of demand in local markets. In this way the producers are able, given the level of income of the population, to reach more consumers. In recent years, consumers have become more aware of the dangers of counterfeit cosmetic products that have flooded the market. It has been estimated that counterfeit cosmetics, or very poor raw materials, are nearly 30% of all products, on the East African cosmetics market. Consumers have no choice, to buy more expensive products for obtaining a higher quality product. This situation has led consumers to vary the supply markets, have begun to travel in foreign countries, especially to Dubai, which is as privileged point of supply because of geographical proximity and excellent air service offered by airlines. In fact, in recent years there has been an increase in African visitors to Beautyworld Middle East in Dubai.

The west Africa

Nigeria is one of the most populous states of Africa, with over 184 million people. The economy is going through a period of suffering because of low oil prices, which negatively affected the government’s revenues, but today, with moderate growth in oil prices, the situation is improving. Most beauty products are imported and the weakness of the Nigerian currency, against the dollar, led to higher import costs, which in turn led to higher prices and a decline in consumer spending power, so the demand has slowed down in most of the categories. However, sectors of beauty and personal care in Nigeria continued to record positive growth, mainly driven by increasing urbanization, growth of the young population and a greater number of women in the active labor force. There is an increased interest among young consumers, urban and feminine for products with higher added value in a number of categories, including oral care, skin care and cosmetics for makeup. Demographic forecasts indicate the Nigerian population will exceed 200 million people by 2020, it is expected that the beauty and personal care products will record a positive performance thanks to this growth. For this reason, Nigeria is becoming the destination of choice for investment by international companies that aim to capture the beauty and care of the person in the mainland market. The growing competition in the Nigerian market stimulates innovation, companies will use, more massive and aggressive marketing strategies. Social media is becoming increasingly important for young nigerian consumers, their intelligent use in marketing campaigns is likely to become a crucial tool for companies.

The Southern Africa

The Southern Africa is the region with greater cultural diversity in the world, combining different ethnic groups, including hybrid mixtures of different cultures. In addition to the different cultures, there are also social distinctions, as regards income, the connection to infrastructure and access to education and health care. Positive policies adopted by many African governments, have favored the growing demand from the emerging middle class, a rapid evolution of the consumer goods sector, including the growth in demand for cosmetic products, especially in Republic of South Africa. All this has played a significant role in the promotion of Southern Africa as a valuable partner in the global markets. Republic of South Africa is the clearly established capital of African glamor, thanks to the trend of consumers increasingly focused on looking attractive and pleasant smelling. This trend increasing sales in many sectors, such as color cosmetics and fragrances. In addition to the growing demographic pressure, as in other areas, another driving factor is the increase in sales of mass market products through pharmacies and other mass-market channels, while there is a reduction in demand for products of premium sector. Customers are increasingly looking for value products that are natural and that provide a series of combined benefits, normally available in premium products. Companies to meet this requirement of the market have created a category of products called «masstige» who possess the combined benefits, but have a price closer to the mass market than the market premium. The cosmetics market of South Africa take on some challenges to emerge, including high cost of the products, the lack of knowledge, by firms, of market segmentation on the basis of spending patterns and demand.

Conclusion

Africa is one of the markets that is developing more quickly, where the demand for cosmetics is growing at a frantic pace. Consumers want the premium products from Europe and North America, thanks to economic development in some areas are now within their reach. There is also high demand for the full range of beauty treatments and personal care products from major companies around the world. We can say that the demand for cosmetic products in Africa is repressed, waiting to manifest itself when conditions are more favorable. The African continent is an attractive and challenging area for the beauty market, this is proving a promising area that will stimulate the economy in Africa.

 

The gateway to Africa: Dubai

Dubai, with its booming cosmetics market offers to African consumers and importers of an ideal market, thanks to the availability of a wide range of products at competitive prices. Buyers from East Africa can choose from a wide range of commodity and purchase only the amount of need, and then ship the goods to their countries, thanks to a very competitive transport costs. Dubai offers to buyers, cosmetics from around the world, which hardly Africans importers could afford to purchase, around the world, for economic and logistic problems insurmountable for them.

 

The problem of bleaching products for the skin

The comprehensive concept of beauty in the 21st century tends to be dominated by Eurocentric standards, for this reason the treatments to bleach the skin are widespread in several African countries, among them Nigeria, Nigeria, Togo, South Africa and Mali. It is a very profitable business for manufacturers, importers and retailers. These products, because of their formulation, are very dangerous and people ignore the risks to health. Côte d’Ivoire and the Republic of South Africa, have banned these products, but some entrepreneurs saw an opportunity in this situation. Some companies have developed products that help cope with the adverse effects of bleaching products, using formulations that help to heal skin damaged by bleaching.

References

-Euromonitor international. Beauty and Personal Care in Nigeria. http://www.euromonitor.com/beauty-and-personal-care-in-nigeria/report

-Euromonitor international. Beauty and Personal Care in South Africa. http://www.euromonitor.com/beauty-and-personal-care-in-south-africa/report

-Euromonitor international. Colour Cosmetics in South Africa. http://www.euromonitor.com/colour-cosmetics-in-south-africa/report

-The Booming Beauty Market in Africa. http://www.borgenmagazine.com/beauty-market-in-africa/

-Skin bleaching in Africa a growing problem. http://rollingout.com/2015/05/12/skin-bleaching-africa-growing-problem/

-Beauty and personal care industry in Nigeria. http://connectnigeria.com/articles/2016/06/beauty-personal-care-industry-nigeria/

-Why Africa is the next big market for cosmetics and beauty products. http://beauty-africa.com/why-africa-cosmetics-beauty-industry/

-African Market for Beauty Products. http://beauty-africa.com/africa-beauty-market-cosmetics/

by Marco Colombini, Economic Analyst- in collaboration with Euromonitor International

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