Posted on 26 September, 2014
Cosmetic products have become a basic and daily need across Africa. According to a recent Deloitte report, Africa’s middle class has tripled over the last 30 years, with one in three people now considered to be living above the poverty line, the current trend expects that the African middle class will grow to 1.1 billion by the year 2060.
In Nigeria, one of the world’s ten fastest growing economies, sales in the beauty and personal care sector were valued at $595.8m in 2011, up from $439.8m in 2006. It predicts that by 2016 Nigeria’s young yet increasingly sophisticated population will drive industry sales to $620.2m. Bath and shower gels ($240m in sales in 2011), skin care ($88m) and hair care ($79.9m) products dominate the industry.*
Kudirat Fashola, owner of the popular Nigerian retail chain Kuddy Cosmetics, predicts the country’s color cosmetics market – valued at $26.2m in 2011 – will be a major growth area as people “want to look their best” in urban environments.*
Emmanuel Nwakanma, chair of the Cosmetics Manufacture & Ethics Association of Nigeria, says the sector has been transformed in the last five years. “The cosmetics industry has achieved substantial growth, from a few local manufacturers to increasing participation by foreign brands,”*
The market is poised for huge growth; Beauty Africa could not be better timed.
* Euromonitor International
Most categories in the personal care market, particularly the premium segment, are dominated by international brands and companies are directly imported by third parties other than the manufacturers themselves. But with the opening of possibilities in the mass segment during the economic crisis, local manufacturers have begun to increase their presence, entering categories previously dominated by foreign companies, such as deodorants and colour cosmetics.
The supermarkets/hypermarkets channel, which is dominated by Shoprite, Park ‘N’ Shop, and recently Spar, is a relatively new channel in Nigeria in terms of size, and still holds a small share of the overall category, serving as it does, more middle-to-higher income consumers. However, such channels, which have been increasing their outlet numbers, have a larger number of premium and niche products, thereby helping to encourage the growth of the premium segment in Nigeria. Direct Selling channels are also increasing their presence in the market, particularly through the leading player.
The Nigerian economy is expected to see good growth over the forecast period. Coupled with good population growth, particularly of the young population, the Nigerian market has plenty of scope to grow, particularly in terms of new exciting products. As part of a fast-growing middle class in the country, young people, who are more westernized through media exposure, are expected to drive demand in the beauty and personal care market over the forecast period.
A growing middle class and the rise of non-communicable disease such as stress and cancer, as well as a rising luxury goods culture, are contributing significantly to the growth of the fledgling spa business in the country. Currently, the spa industry in Nigeria is estimated to be worth over N30billion in annual turnover.*
Skincare as an item of service provided by spas accounts significantly for the boom, as more Nigerians backed by a growing wallet size are recognising the importance of taking care of their skin. This has opened up the business for manufacturers of advanced skincare products in Europe to step in.
Nigerians have been at the risk of using fake and or substandard skin creams for so many years, which accounts for the surge in skin cancer, and huge disease burden such as malaria, tuberculosis, typhoid fever etc. in rural communities.
* Beauty Entrepreneur Nigeria