The cosmetics industry in Africa is a burgeoning market that is set for increased interest from international brands as well as added opportunities for local entrepreneurs.
From $400 per weekend to $1 million a month, local business successes form part of the cosmetics narrative in Africa, with opportunities waiting to be tapped.
The growing middle class in Africa provides companies with the ideal market to tap into, and beauty continues to be an important aspect of people’s lives all over the continent.
With brands such as L’Oreal and others considering Africa the new frontier for business, the cosmetics industry on the continent is set for accelerated growth in the near future.
We take a look 12 things you may not know about the cosmetics industry in Africa.
The cosmetics industry is worth $460 billion globally, and will be worth around $675 billion by 2020, according to recent research from BusinessWire. The beauty and personal care market in Africa is expected to be worth $11 billion by the end of 2017, with exponential growth expected in coming years.
The wealthy and middle class segments of the African population continue to grow, leading cosmetics companies to focus on the continent. Africa’s middle-class has tripled in size in the last 30 years and is driving the continent’s demand for cosmetics.
The global cosmetics market is dominated by Asia Pacific, with 36.2% of the market, as well as North America and Western Europe with 24% and 20.2% respectively, while Africa and the Middle East only account for 3% at the moment, setting the region out as a big potential for growth.
The African beauty market is expected to double over the next decade, with a projected annual growth rate of 5-10% in the sales of beauty and personal care products. It is for this reason that global brands such as L’Oreal, Procter & Gamble and Unilever are paying close attention to Africa, and making plans to penetrate the market.
Giant global brands such as Unilever, L’Oreal and Estee Lauder dominate the African cosmetics space, with these big players keen to invest in future success. L’Oreal, for example, has opened up offices throughout Africa, including in South Africa and Ghana, with $9 million invested in West Africa alone.
L’Oreal recently opened their very first research and innovation centre in Africa, with the Johannesburg operation aiming to conduct research and develop products with African consumers in mind.
There are many African cosmetics success stories throughout the continent, such as South African beauty therapist Renchia Droganis’ beauty products brand, Africology. From mixing ingredients in her kitchen and selling to her neighbours, she turned a $400 per weekend business into a brand that now makes $1 million every month from local and international sales to customers in France, Germany, UK, and the United States!
One of the strategies employed by cosmetics companies operating in Africa is to design smaller packaging sizes to address price sensitivity in the local markets. Smaller products are sold at a better price, allowing for a wider market.
Anti-ageing skin care for Africans is primarily focused on dealing with dark spots and uneven complexion, whereas the focus for Western women is typically aimed at tackling wrinkles. This kind of difference is what makes research and development key to understanding a market.
Ingredients specific to Africa are increasingly used in cosmetic products both locally and worldwide for their benefits. Shea butter, for example, with its excellent moisturising properties and origins in the Shea tree that is grown in West Africa is often used in products, as are South African rooibos leaves.
According to Euromonitor research in 2012, South Africa ($3.4 billion) and Nigeria ($2 billion) were the biggest personal care and beauty markets in Africa (including personal care segments such as deodorant and hair-care). The cosmetics growth trend has spread to new burgeoning markets such as Kenya, Ghana and Ethiopia.
Many parts of Africa experience warm temperatures throughout the year, which means that companies need to consider these challenges in the cosmetics products that they produce for African consumers. Make-up, for example, needs to be more resistant to hot and humid weather, which puts locally produced products at somewhat of an advantage in catering for local consumer needs.
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