Beauty Product Sales Strong In Africa

Beauty Product Sales Strong In Africa

The African beauty product market is expected to grow by 5.2 percent between through 2017, marginally trailing Latin America’s 5.6 percent growth, according to market research firm Euromonitor.

South Africa is the continent’s largest market for beauty products, valued at $2.1 billion, according to a report in Trefis.com. This is followed by the Nigerian beauty product market, valued at $1.2 billion.

While these market sizes are a far cry from India and China, impressive long-term prospects in Africa and feeble Asian economies seem to be driving investments into the region, the report said.

Global sales for most beauty product players have been tepid due to the currency headwinds in the past year. Sales in the Asia-Pacific region are expected to be subdued due to weakness in region’s economies and currency volatility. Despite a recovery in the North American and Eurozone economies in the last few months strengthening sales, high growth markets like Asia-Pacific, Latin America and Middle East and Africa continue to be a priority for beauty product players.

The recent acquisition of Kenyan beauty product manufacturer Interconsumer Products (ICP) by L’Oréal suggests that global players are looking to expand into the African continent given its growth potential.

The diversity in consumer tastes between North Africa and sub-Saharan Africa would generally require a company to have a research and development division specifically for the region. However, ICP is a widely recognized beauty player in East Africa with sales in Kenya, Uganda and Tanzania.

The acquisition of ICP gives L’Oréal a chance to leverage the existing ICP distributional network and utilize its new Egypt manufacturing facility to manufacture locally relevant products without any additional capital expenditures into an R&D facility.

L’Oréal has had only hair care product such as SoftSheen-Carson and Mizani to cater to African consumers. The ICP acquisition will strengthen its skin care and hair care product portfolio.