Major players in the global beauty and cosmetics industry are making the most of the boom projected for the sector in sub-Saharan Africa.
Thanks to a burgeoning population expected to double to 2.4 billion in 2050, the rising middle class and amplified urbanisation have positioned the region as the “next frontier” in the sector, with the beauty market expected to double in size over the next decade.
The cosmetics and personal care industry globally generates an estimated annual turnover of $400 billion. Over the past 20 years, the industry has grown on average 4.5 percent annually.
Sub-Saharan Africa accounts for 3 percent of global beauty product sales, but that share is expected to grow at double the rate of the market.
Nigeria and South Africa, the continent's biggest economies, have emerged as the investment destinations of choice to international firms aiming to capture the beauty and personal care market on the continent.
Research indicates Nigeria and South Africa are the biggest personal care and beauty markets on the continent, valued at $3.4bn and $2bn respectively. Nigeria is the most populous with over 184 million people.
US hair extension company Her Imports has recently expanded to the West African country, where it has set up base in Lagos and plans to enhance its reach before the end of the year. Its products have been used by, and received accolades from, celebrity hair stylists for Nicki Minaj, Rihanna and Kerry Washington.
Patrick Terry, chief executive of Her Imports, said the response had been phenomenal from the local markets.
“The decision to open the store in Lagos was data driven. We receive more hits on our website from Lagos, Africa, than we do in Atlanta,” he said.
“Her Imports products are performing sensationally in Africa. There are no established providers of high-end hair extensions, so we aren't seeing any competition. Our lace front closures are performing particularly well with notable fashionista Linda Ikeji.”
Her Imports projects sales revenue from Africa to reach $10 million by 2018 with a net potential of $100m for human hair extensions and wig pieces.
“It is a large chunk of revenue that many virgin hair providers have been ignoring. We noticed this gap in the market. By simply looking at the numbers, it was obvious that Africa was a booming, untapped market,” said Terry.
In line with the projected growth, leases are now secured in Abuja (also in Nigeria), Accra (Ghana) and Johannesburg (South Africa). Operations in these locations will begin this month; Nairobi (Kenya) and Cairo (Egypt) follow next year.
Freda Francis, chief executive of Her Imports Africa, said the local market was lucrative.
“African women are known for their elegance, unique versatility and style. We are thrilled at our successes and attribute this to the care that we take in sourcing our products,” she said.
Meanwhile, L’Oreal, the French-based global cosmetics company, recently inaugurated its new research and innovation centre in Johannesburg.
The facility will study African hair and skin specificities as well as the beauty routines and expectations of sub-Saharan consumers. It hosts product development, evaluation and advanced research teams, and will employ scientists from the fields of chemistry, chemical engineering, physiology, cosmetology and biochemistry.
Alexandre Popoff, executive vice-president Eastern Europe and Africa, Middle East, said sub-Saharan Africa was one of the fastest-growing regions for L’Oreal.
He said the new research arm in South Africa would enable the company to create the beauty products of the future for African consumers, while drawing inspiration from the diverse beauty rituals and the needs of consumers on the continent.
Laurent Attal, executive vice-president of Research and Innovation, said L’Oreal was showing its determination to go further in innovations for the African beauty market.
“We are starting with hair. Our ambitions are much broader and cover the body, hygiene, skin care and make-up categories,” said Attal.
The chief director of cosmetics, chemicals, plastics and pharmaceuticals at the South African Department of Trade and Industry, Claudy Steyn, said that during job creation it was imperative that local infrastructure, expertise and the devalued currency were leveraged by companies to drive exports, in particular to African markets.
“The job opportunities that exports create are well documented and choosing South Africa as the preferred location will support employment creation. The sourcing of raw materials and services locally will boost reduction of the adverse balance of payments we face,” she said. – CAJ News