Beauty markets draw global players……. Published 13 days ago by focus

By Segun focus

Consumer companies are building their beauty and personal care product lines to meet growing African demand
Outside of South Africa, African beauty markets have not held much historical allure to international companies. Shampoo, hair products and hair straighteners have not seen much demand from a continent where many measured their worldly wealth by the few coins in their pockets.
But increasing consumer appetite and income trends are tilting populations towards key price points for goods from shampoo to hair creams and hair relaxers, drawing in the likes of Unilever, Procter & Gamble, Colgate, Palmolive and L Oreal. Some of these companies have been in Africa for a long time, but not at the scale they now want to be.
Market drivers are fast growing economies such as Nigeria, major markets such as South Africa and Egypt, a rising middle income class, population growth? mostly in west Africa ?and increased urbanization, according to Richard Orendo Smith, chemical materials analyst at Frost & Sullivan, the research group.
The market is currently catered for by both imports from other continents and locally produced products, with local production representing about 50 percent of the volume of the total market.
While South Africa and Nigeria personal care and beauty sectors are among the heftiest? valued at $2.1bn and $1.2bn respectively ?the growth story is increasingly Pan African. Formal retail trade channels are expanding across the region, especially via the big South African retailers Shoprite, Pick n Pay, Massmart, Spar and Metcash ?whose own regional growth provides multinationals with a route to market.
Historically, South Africa has been a good market because, even if you aggregate across all ethnicities, there has been spending power there for some time,
says Geoff ?Skingsley, executive vice president for the Africa and Middle East zone at L Oreal. What has changed is an awareness that other parts of Africa now have an emerging middle class, so the opportunity becomes much broader.
L Oreal is looking to these markets to deliver significant growth over the next decade. The company now has regional hubs in South Africa, Kenya and Ghana, touching 15 countries. In particular, it has an eye on the east African market ? currently serving Kenya, Uganda, Tanzania, Rwanda, Burundi and Ethiopia and building on a product range that includes Softsheen Carson, Maybelline, Dark and Lovely, and Garnier.
When pondering which markets to enter, LOreal looks for a decent size population, an emerging middle class, a minimum of infrastructure, and stability, Mr Skingsley says. There are more and more African countries that fall into that basket.
In the Middle East and Africa? the final frontier for LOreal? like for like sales grew at nearly 15 percent in 2012, the highest growth of any of its regions, up from 10.5 percent in December 2011. Mr Skingsley expects LOreal to grow at the twice the rate of the market? because we believe we are bringing new and better products.

When it comes to product selection and innovation, certain international brands can have legs in African markets with minimal change to the product. We are developing libraries of options within our brands on a global scale and then selecting those options and tailoring them to African countries, says Craig Luck, R&D director for skin products at Unilever. It is important for brands to reach across, as far as they can, and speak to consumers in new ways. And there are some surprises along the way. www.hairvillagers.com