The changing face of the beauty and cosmetics industry in EA

What you need to know:

BIG NAMES

House of Tara: Leading Nigerian beauty brand House of Tara expanded its cosmetics line to Kenya in November. The company plans to sell colour cosmetics, make-up products and accessories like brushes, bags and boxes in East Africa’s leading commercial hub.
Nigerian entrepreneur Tara Durotoye entered the highly competitive industry dominated by multinationals like Unilever, L’Oreal and Proctor and Gamble.
According to Euromonitor International, the Kenyan colour cosmetics market is worth $59.8 million and is projected to grow to $73.7 million by 2018. Tara says the industry is yet to attain its full potential. “We feel the Kenyan market is very important to us. It is growing by five per cent every year; the multinationals are already here and the local brands like Suzie Beauty. But I feel the market is still under-served because the Kenyan consumer is not exploring cosmetics. There are so many who do not wear make-up,” said Tara during an interview in Nairobi.
SuzieBeauty: Suzie Wokabi of SuzieBeauty was trained in the US by MAC Cosmetics.
When she researched the logistics to set up her business in 2009, she found that Kenya had no local cosmetics line and no one was manufacturing colour cosmetics. Lacking the huge capital needed to set up her own factory to manufacture locally, she turned to an Asian white-label manufacturer who could develop and produce her beauty line according to her specifications.
After development of the product line and a year of testing on the market, SuzieBeauty was launched in 2011, and retail operations began in 2012. The brand competes with household names such as Revlon and L’Oreal. SuzieBeauty products are priced well below these brands, which makes them attractive to local consumers.

Makeup, on the face of it, is a language many women don’t speak fluently. But not for want of trying, if you look at the numbers.

Euromonitor International pegs the Kenyan colour cosmetics market as worth Ksh5.4 billion ($59.8 million) with a projected growth of Ksh6.6 billion ($73.7 million) by 2018. The combined Kenyan, Tanzanian and Ugandan market is $152 million, and projected to grow to $231 million by 2018.

According to Forbes, the cosmetics industry worldwide is worth $55 billion. Reuters Johannesburg stated, in 2013, that Estee Lauder planned to invest $1 billion in sub Saharan Africa.

Recent entrants to the Kenyan market include Sleek, Flormar, Revlon, Maybelline, SuzieBeauty Cosmetics and House of Tara. And last month, Estee Lauder brought in their third biggest brand, MAC Cosmetics, to Kenya, the first outlet in East Africa.

The market is familiar with the product. Although referred to as high end, MAC is relatively affordable. Located at the Village Market in Nairobi, the MAC store is a study in black — makeup artistes in black dresses, and a moody, edgy setting.

“When scouting for a location, we look at who else is going into a shopping mall, who is already there, who is planning on going there. We look at the consumers, the demographics, we look at GDP growth. We want to make sure we are in the right place at the right time,” said Sue Fox, the managing director of Estee Lauder Companies, South Africa and sub-Saharan Africa.

Sue said, “Kenya is a very exciting, vibrant, energetic, growing environment.” Nigeria opened its first Estee Lauder outlet in 2013, and now has three shops. South Africa, Botswana and Zambia also have outlets.

Estee Lauder’s 2008 partnership with Lintons brought in Clinique, the company’s second biggest brand, which Sue says is “performing very well.”

Consumer confidence

An important aspect of Estee Lauder is consumer education.

“Part of the whole DNA of MAC is when consumers are given an amazing experience and the confidence to apply makeup for themselves. Wherever we go in Africa, there is a need for education. We are not going to send a beginner out with a look she feels uncomfortable with. The intent is to have them come back and say, ‘I’d like to try a brighter shade of lipstick,’ or ‘I’ve heard of the smoky eye. How can I get that?’ It’s step by step.”

It will be interesting to see which products do well on the East African market. Studio Fix is quite the crowd pleaser, and there’s also Pro LongWear or Mineralize.

“Studio Fix is our top selling product and a great entry into the brand especially through mascara and lipstick, from the new consumers to sophisticates who prefer something super bright like Ruby Woo,” Sue said.

While MAC is looking at store expansion, House of Tara’s business model is the Avon Lady door to door client service with four to five products sold apiece and a glimpse into product use.

Tara Fela-Durotoye already has 14 outlets in Nigeria. Her business model is similar to the newest international cosmetics company Tyra Beauty. Tyra is already a brand name in Kenya. Traditionally, women of colour have, since before Iman’s 1998 launch, struggled to find cosmetics that suit them.

MAC cosmetics have another advantage especially with the youth. Through the Viva Glam campaign with Rihanna, Lady Gaga, Nicki Minaj, Mary J. Blige and Ricky Martin, the company has attached popular personalities to their brand.

In addition, the MAC Aids Fund, started by founder Frank Toskan and Frank Angelo, has remained a key part of the brand to date.

“So far we have raised over $340 million globally through the sale of Viva Glam lipsticks. Off our global fund, we have just given $50,000 to the Mothers to Mothers Campaign, Nairobi. As part of our launch strategy, when we open a new market we support charities that work with HIV/Aids,” Sue said.

All the proceeds from Viva Glam go to local charities. Kenya will be no different. Social media is used as a news platform with a newsfeed every time a new product is launched.

Branding

The look and feel of cosmetics outlets is important for companies. Brands don’t just bring products on board, they “infuse culture.” As a result, they must invest in training makeup artists.

“The launch party and training are an integral partnership between ourselves, Paris and New York. Everybody is involved. What you get in Nairobi is what you get anywhere else in the world. It is that same feel of service and products as you would access in London, New York or Paris. Training is very important. We are driven by trends and fashion so we have to keep updating,” Sue said.

“We have a broad range of products for all kinds of skin tones. People understand there are products that are perfect for them. For Nigerian women, we tailored our assortment and made sure we had the right shades.”

Cost is also an important factor. KPMG disclosed in a survey by SuzieBeauty Cosmetics that Kenyan women are willing to spend up to 20 per cent of their income on beauty products. Sue reaffirms this.

“Wearing makeup gives you confidence that you can’t measure in terms of money, but in terms of how you look and feel great. If you look at how much you spend on a lipstick and how much you get out of it, it is a worthwhile expenditure.”

With a career spanning London, Singapore, New York and South Africa, Sue has learnt that women’s concerns are similar.

“Every woman wants to feel beautiful. That is a consistent message across continents. There are different skin care needs across races. Black women in SA are very concerned about pigmentation. White women are very concerned about lines, wrinkles and ageing. Sub Saharan Africa is all about experimenting and learning. This is a nascent industry.”

With the gaps across markets fast closing via connectivity, you would think there isn’t much left to create.

“The world is so developed. There are few markets where you have the opportunity to build and raise brands, particularly if you come from the West. I am from Britain, and that is a very established market. Bringing in products that are locally relevant and ensuring we have the right trade depth for all consumers has been rewarding.”