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article imageIt's worth it: Beauty firms chase Africa cosmetics boom

By Ben Simon (AFP)     Apr 1, 2014 in Business

Nigeria's Kuddy Cosmetics began as a one-woman business run out of a suitcase, with Kudirat Fashola bringing beauty products back from the United States in her luggage.

More than 20 years later, her daughter Zainob helps run the company which now wholesales leading beauty brands and is flooded with requests from companies anxious to crack the fast-growing cosmetics market in Africa's most populous country.

"They love Nigeria. Every week I get emails... (international) brands see it as a large, growing market," the 26-year-old told AFP.

The trend applies across sub-Saharan Africa, where global companies see a region poised for sustained economic growth over the next decade and a potential middle class boom.

The world's top cosmetic producer L'Oreal, for example, is looking to boost both sales and production across the region as it battles for a larger share of a developing market.

A model is prepared backstage by make-up artist Tom Pecheux at the "Made in Africa: By Arise Ma...
A model is prepared backstage by make-up artist Tom Pecheux at the "Made in Africa: By Arise Magazine" fashion show on September 15, 2011 in New York
Jemal Countess, Getty Images/AFP

But industry experts say that winning the loyalty of Africans in the cosmetics sector poses unique challenges.

Unlike a bottle of beer or a flat screen television, products that aim to dominate must be designed specifically for local consumers -- especially their hair and skin.

- A growing opportunity -

Sub-Saharan Africa currently accounts for just three percent of global beauty products sales but that share is expected to grow at double the rate of the market, L'Oreal said earlier this month.

In 2013, the French firm posted a 52-percent rise on 2012 sales in the region.

"This market is going to become very significant," L'Oreal's director for the Middle East and Africa, Geoff Skingsley, said in a statement.

To reach its stated goal of overtaking Unilever as the highest-selling brand in sub-Saharan Africa, L'Oreal has begun reinforcing its existing commercial hubs in Kenya, Nigeria and South Africa.

In addition to its existing production plants in Kenya and South Africa, the group is also looking at the feasibility of opening a third facility in west Africa, although Nigeria would be an unlikely choice given its woeful electricity supply.

- Adapt to local market -

Models get their hair done backstage ahead of the "Darkie" show on August 15  2008 during ...
Models get their hair done backstage ahead of the "Darkie" show on August 15, 2008 during Cape Town fashion week
Gianluigi Guercia, AFP/File

For L'Oreal, research is crucial to growing its African market share, including at a facility in South Africa which the company said "enables the group to evaluate formulas for the specific needs of consumers in the region" particularly hair and skin.

The company said that 60 percent of its sales in sub-Saharan Africa were from products designed specifically for Africans, priced anywhere from a few cents to under $10 per unit.

Bestsellers include "Dark and Lovely", which has become the world's top-selling hair straightener kit, according to the group.

A 2012 study of the colour cosmetics market in South Africa by the Euromonitor group lent support to the notion that offering innovative products tailored to local demands had far more influence on sales than brand loyalty.

A prominent example was the success of a daily hydration cream that offered built-in sun protection.

Describing South African customers as "fickle" and with "weak brand loyalty", Euromonitor predicted products that increasingly offer a combination of benefits will likely become bestsellers.

- Flexibility key -

Fashola said that description could easily apply to Nigerian consumers as well.

While wholesale generates the bulk of Kuddy Cosmetics' revenue, the company also has a small retail shop.

Emloyees at Nigerian job-finder site Jobberman are seen at work on June 17  2013 in the upmarket Lag...
Emloyees at Nigerian job-finder site Jobberman are seen at work on June 17, 2013 in the upmarket Lagos suburb of Lekki
Pius Utomi Ekpei, AFP/File

The outlet is in the sprawling Ikota shopping complex in Lagos's rapidly expanding Lekki neighbourhood, which resembles the suburban US in places and is home to many members of Nigeria's new upper-middle class.

Customers entering the shop often voice interest in purchasing big name US brands like Olay and Black Opal but can be persuaded to buy a lesser known brand if it promises some key value-added criteria.

She specifically cited a well-documented preference among some black African woman for skin-lightening products.

"With skin care, it has always been about lightening... This is not a new thing," she said.

Any producer who is flexible and willing to cater to Nigerians can succeed in the country, she said, explaining that sales had increased dramatically for the Turkish cosmetics Bio Balance.

She attributed that to her Turkish partners also being based in an emerging market, which meant they understand some of the challenges Nigerian businesses face.

As a result, they were "very easy to work with", she added.

Customers may like the sound of a product 'Made in France' but they will happily buy Turkish.

It just "requires having to push them a little bit," Fashola said.

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