Foreign companies have been staking claims in Africa’s growing beauty market, valued at $2.1 billion and $1.2 billion for South Africa and Nigeria, respectively.
Of the African Union’s 54 member countries, 13 report penetration from the rising beauty industry, reports Fashinvest.
L’Oreal, Estee Lauder and Unilever are among the global giants who have entered the African beauty market.
Unilever is an Anglo–Dutch multinational consumer goods company producing personal care products among others; L’Oreal is the world’s largest cosmetic and beauty company; and Estee Lauder manufactures and markets skin care, cosmetics, perfume and hair care products.
Behind the strategic move of the beauty-driven companies is the desire to get an early foothold on the continent’s emerging middle class.
Africa’s middle class has grown by 34.3 percent to nearly 326 million people, according to African Development Bank.
MAC, an Estee Lauder-owned company, recently opened a store in Lagos. Karen Buglisi, global brand president of MAC, told Women’s Wear Daily the store’s top-selling product is its $24 Ruby Woo lipstick.
Unilever is increasing spending to build new factories and upgrade existing ones with the goal of doubling its revenue in Africa in the next five years. “I would be disappointed if we haven’t close-to-doubled it in five years,” Frank Braeken, Unilever’s executive vice president for Africa, told Reuters. “If you look at these opportunities, that should certainly be our ambition.”
Population growth is a deciding factor in the beauty market push in Africa. According to a United Nations’ report, Africa’s urban population will increase from 414 million to more than 1.2 billion by 2050, with Nigeria, Africa’s most populous nation, a focus among the beauty companies. The continent’s population is projected to be five times the population of Europe by 2100.
L’Oreal’s recently bought Interconsumer Products Ltd., Kenya’s largest health and beauty products manufacturing company. Geoff Skingsley, L’Oréal executive vice president for Africa and Middle East, told Women’s Wear Daily, “It broadens our product offer with accessible brands, and strengthens the group’s position in the mass market. This acquisition will also accelerate our development in Eastern Africa.”
Ultimately, the acquisition gives L’Oreal access to Interconsumer Products’ distribution network, which is especially beneficial in countries that are experiencing population growth. Expanding distribution falls in line with the company’s desire to gain one billion consumers over the next five to 10 years, Patricia Ithau, managing director of L’Oréal East Africa, told HowWeMadeItInAfrica.