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Don’t Be Late to the $10 Billion African Beauty Party

MAC, Lancôme and L’Oréal Luxe labels are among global brands putting down roots in African megacities from Lagos to Abidjan. Yet most brands miss the mark because pan-African strategies are too blunt in a region needing hyper-localisation.
Model Imade Ogbewi backstage at Gavin Rajah show in Johannesburg by Per-Anders Pettersson | Source: Getty Images
  • Melissa Twigg

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LAGOS, Nigeria – One hot afternoon under the shadow of the gleaming Eko Atlantic skyscrapers, executives from Yves Saint Laurent Beauté invited local power brokers to a special event. On the agenda was Africa's growing clout in the global beauty market but, this being Lagos, the conversation quickly turned to the scale of the opportunity for those brands prepared to invest in Nigeria's megacity.

The event saw American Instagram star Jordyn Woods, who has over 10 million followers and a makeup collaboration with Kylie Jenner, mingle with Nigerian influencers like Idia Aisien, a TV host and philanthropist who happens to be the daughter of a businessman locals referred to as “the champagne magnate."

Lagos-based Marketing Director and Chief Executive Bola Balogun organised the swish event. A beauty connoisseur in vertiginous heels and an array of primary coloured suits, she wields an influence that peers in other emerging markets could only dream of. Global giants such as Lancôme and other L'Oréal Luxe brands come to her firm The Glam Brand Agency to create custom campaigns for the increasingly lucrative African market. These are typically shot in Lagos, using local influencers and ambassadors.

"It is quite unusual, yes," says Balogun, who worked on a supplementary campaign to Lancôme's famous Lupita Nyong'o advert to ensure that it included Nigerian faces and local celebrities. "Normally adverts are made out of Paris or New York or by in-house teams on the ground, but we do the 360 of advertising and marketing here. People need to see [local] African faces if they are going to buy products, and that's what I specialise in."

Data suggests it is worth the investment. Africa currently represents a 3 per cent share of the global beauty industry, according to an Orbis Research study, but that is set to double in the next decade. This year, the estimated value of the African beauty and personal care retail market is more than $10 billion, according to data provided by Euromonitor International.

In Nigeria the forecast for next year sees the sector enjoying double digit growth. In other African countries, 2020 year-on-year growth will amount to more than twice that of the global growth rate, albeit from a comparatively low base.

Yet most beauty brands still aren't plugged into this dynamic market in a meaningful way. Apart from a few pioneers, many haven't fully woken up to this continent. The African beauty market is growing so fast, in fact, that by 2021, just 10 of the biggest 54 African country markets will be worth $13 billion.

Prioritise the Giants on the Continent

While mass consumption is on the rise across the continent, including North African countries like Egypt and Morocco, high-end brands are currently focused on two markets in sub-Saharan Africa: South Africa and Nigeria.

According to Euromonitor International, the Nigerian beauty and personal care market should exceed $2.2 billion next year. No wonder major names are busy integrating the country into their supply chains: chemicals company BASF — an important pigment supplier for the cosmetic industry — has placed such value on Nigeria that it is opening its Application Technology Laboratory for personal care there.

At retail level, beauty bars and multi-brands are flourishing in Lagos and Abuja. The sleek, all-white Montaigne Place on Lagos’ palm-tree-filled Victoria Island offers facials to the city’s elite and sells perfumes by L’Oréal Luxe designer brands and skincare and makeup by Clarins, Elizabeth Arden and BlackUp. Nearby, Essenza is a Sephora-like multi-brand store, filled with major international names. It has eight stores around the country, but the flagship is located in Lagos’ Palms Shopping Mall — and is where Nollywood stars and other famous faces gather for brand launches.

Nigerian consumers are generally brand loyalists so brands [entering now] need to find ways to differentiate themselves.

Stand-alone boutiques have been slower off the mark in Nigeria, due to a shortage of suitable retail infrastructure and many other challenges. But Lagos is home to two MAC stores, L’Occitane and an Yves Rocher boutique.

While Essenza is still dominated by international names, locally-made brands are growing in popularity. These include House of Tara, which was launched in 1998 by businesswoman Tara Fela-Durotoye and is now sold in other growing markets including Kenya and Ghana, and Zaron – which has SPF-based makeup products tailored to African skin tones.

"In the last couple of years, the beauty and cosmetics industry has grown exponentially," says Zara Odu, the founder of Designers Consociate, a firm that works to create sustainable solutions across the value chain in Nigeria. "But it is important for anyone coming into the market to remember that Nigerian consumers are generally brand loyalists. Brands need to find ways to differentiate themselves."

Hyper-Localisation Often Works Best

Influencer marketing is still in its infancy in some African markets, so campaigns typically feature actresses, television stars and musicians rather than local social media stars growing a dedicated online beauty audience.

Lancome partnered with Powede Awujo - a beauty queen, nurse and pilot who is regularly featured on popular style magazines and sites like Bellanaija. Lancome have also worked with Kehinde Smith, a high-profile American-Nigerian entrepreneur and model, in their 40 Shades campaign that was rolled out around the country. Nollywood actresses such as Annie Idibia, who has more than five million followers on Instagram and is married to Afrobeat superstar 2Baba, regularly attend Lancome launches and post about the brand online.

“Many global companies come into a new market believing their international campaigns can still work but that’s a mistake,” says Ijeoma Balogun (no relation to Bola), the Chief Executive of Lagos-based RedrickPR. “Lancôme has done so well because of who they partnered with. We need to see more brands produce campaigns that are specific to our market.”

In the other giant on the continent, the market is very different. South Africa is where the majority of global beauty companies have their regional African headquarters. L’Oréal, which has seven research centres and labs in the country, describes it as “our gateway to the African continent.” Unilever Group accounts for roughly 13 percent of the market, followed by Procter & Gamble, Avon and L’Oréal, according to a report by Mordor Intelligence.

They are pushing quite hard to get their share of the pie, but where things get difficult is when it becomes clear they still don't really understand the country.

While Nigeria clearly has the most potential, South Africa currently generates the most money in the Sub-Saharan region. According to Euromonitor International, it will earn more than $4 billion in revenue this year — thanks in part to its more developed beauty ecosystem and structured distribution networks.

Glossy, air-conditioned malls dominate the wealthier suburbs of Johannesburg and Cape Town, and inside them, busy department stores such as Edgars — which has 650 branches around southern Africa including Botswana and Zimbabwe — Truworths and Foschini offer a wide range of high-quality beauty bars. Estée Lauder and Elizabeth Arden brands are present in beauty counters across the country, MAC has five stand-alone stores across Johannesburg, Durban and Cape Town, and Dermalogica has 13.

A sharp rise in social media use has helped the beauty industry grow even as the economy has contracted. Beloved brand ambassadors include television presenter K Naomi, who represents Maybelline, and Top Billing star Bonang Matheba, who has a long-standing contract with Revlon and regularly travels to New York to shoot campaigns for them. Their images are plastered on posters around Sandton, Hyde Park and the Waterfront, and they promote the brands eagerly on Instagram.

“While most multinationals base all their lab work out of [non-African] international hubs, if they are operating anywhere on the continent, it’s here — and there is a huge drive to try and penetrate the South African marketplace,” says John Knowlton, the founder of Cosmetic Solutions, which develops products for the African market from Cape Town. “They are pushing quite hard to get their share of the pie, but where things get difficult is when it becomes clear they still don’t really understand the country.”

Reasons he cites include South Africa’s socio-economic structure, complexities born out of a diverse multi-racial society and the fact that the percentage of people able to afford high-end products — particularly given the weak rand — is still very small. However, more than anything, he thinks brands have simply not yet worked out how to sell their products to African consumers.

“While brands have become very good at getting local hair care right, there is a dearth of products for black skin in the high-end sector,” he says. “If you’re a black woman looking for high-end skincare, there is [almost] nothing [marketed to] you, and I think this is a huge opportunity they’re missing out on.”

Avoid Making the Wrong Strategies

Even brands that are focusing primarily on the black market in South Africa make basic missteps that alienate their customer base. "At a recent brand showcase in Joburg, only one of the seven brand managers was black, so they had no understanding of the people they were serving," says Mathahle Stofile, a consultant and former Beauty Editor of the local edition of Marie Claire.

“That’s why they keep on showing us products aimed at white skin. When I was a beauty editor, I used to raise my hand at press launches and ask, ‘Would you launch dark brown foundations in Sweden to see how the market performs before you bring in the lighter beiges? So why do we do this in Africa?’ The answers were never satisfactory.”

The brands that do offer a wide range of shades tend to flourish. Estée Lauder Double Wear Foundation has been South Africa’s best-selling foundation within the premium segment for years, largely because they have over 55 shades to choose from. Fenty, Lancôme, Maybelline and MAC all have in excess of 40 shades, and the retail and R&D teams that came to South Africa were instrumental in forcing that change.

At a recent brand showcase in Joburg, only one of the seven brand managers was black, so they had no understanding of the people they were serving.

South Africa also has a growing manufacturing sector of its own, with a number of new local brands using the country’s unique botanicals from the extraordinary Cape Floral Region as the basis for their products. Products by Skoon and African Extracts fall in line with the global trend for sustainability and natural ingredients, although they will face an uphill struggle if they want to crack the costly and complex international market.

“We have so many untapped ingredients and centuries of heritage — and so much knowledge is still being held by rural herbalists and traditional healers – that I really feel it is the time to turn the spotlight on South Africa, although it has yet to happen,” says Margaux Knuppe, founder of Afari, a newly launched botanical skincare collection.

But while South Africa has traditionally been the focus of the continental spotlight, a one-size-fits-all approach doesn’t work for 54 countries, and teams based out of Johannesburg are arguably as removed from the reality of the central, west and east African markets as those in Paris or New York.

Learn the Regional Market Differences

Some beauty brands appear to finally be waking up to the fragmented nature of the continent — not only the significant differences between anglophone, francophone and lusophone consumer markets in Africa but also the nuances in strategy needed for each individual culture within individual countries.

MAC has successfully penetrated the Ivorian market, with a stand-alone store in Abidjan, while Inglot, L’Oréal and Maybelline all sell their products out of Zino, a fashion and beauty emporium in the business district. The same brands operate in Senegal, selling from e-commerce sites such as Fabellashop and its brick and mortar store in central Dakar. Luxury beauty products abound in Luanda’s niche beauty scene as wealthy Angolans keep demand buoyant.

Counterfeits, however, do continue to pose a challenge in Africa, despite government efforts to stop the sale of products that are packaged to resemble those of high-end brands.

Due east across continent in Nairobi, the ecosystem is not dissimilar — and government crackdowns on counterfeits also hit the news in Kenya earlier this year. The biggest emporium in the city is SuzieBeauty, which sells a range of products including Maybelline, Inglot and BlackUp, and delivers online in some of the more difficult to reach parts of the country.

Unlike Nigerians and other West African consumers, “Kenyans are very conservative,” says Nairobi-based style icon and editor Carol Odero, who bucks the conservative trend with her signature scarlet hair and bold wardrobe choices. “They are not huge fans of experimentation and constantly harp on about natural beauty. But while the industry is small, it is growing.”

In Cote d’Ivoire, blogger Fanta’ Styck has worked on campaigns for Maybelline and Dior – and last year flew to South Africa to shoot a video for L’Oréal that was later released around francophone Africa. “There has been a huge evolution of the beauty industry here since 2017, mostly because brands have finally started making foundations and concealers dark enough for our skin,” says Styck, in French, on the phone from Abidjan.

The current activity in African markets presents beauty executives with several lessons, one of which stands out among the rest. While pan-African strategies can certainly help brands gain a foothold, the big payoff will come only when brands pursue national markets and cater their demographic approach accordingly.

The scale of the opportunity should already be enough to incentivise brands to make products and that better serve African consumers on the individual country level. But they need to adapt that local approach to distribution, R&D, marketing and every other aspect of the business.

Or as Bola Balogun explains the mindset, “In Nigeria, we love ourselves enough that we would like to see ourselves represented properly.”

Additional reporting by Tobi Idowu.


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