info.afrindex.com
China-Africa Trade Information Service
info.afrindex.com
China-Africa Trade Information Service
Image from Pinch Africa Ltd
Africa is one of the fastest growing markets in the world, and demand for cosmetics is growing at a frantic pace.
The Nigerian beauty industry, employing over a million people and contributing billions to the economy. Nigeria with a population of over 170 million people and a GDP growth rate of 8% annually is expected to become the 3rd largest population in the world by 2050. This puts Nigeria among the fastest growing markets in Africa. Faster than Brazil and Russia, according to a report by the IMF, the potential is massive.
When it comes to the beauty and wellness industry, this market is expected to double over the next two decades with an estimated annual growth rate ranging from 5% to double digits. A report by Euromonitor in 2012 projected the Nigerian beauty and wellness market to value about $3 billion in 2017. The industry had already generated over $2 billion in 2014 with skincare having a market share of 33%, hair care – 25%, makeup – 17% and fragrances – 17%.
With such market growth, Nigeria is considered as the African rising star for the beauty market. 77% of Nigerian women use skin enhancement products – the largest percentage in the world.
"World over, the makeup industry is a multi-billion dollar one, with Nigeria and the African continent as a whole at the heart of it all. The singular fact that international brands like Maybelline are making its way into the African market with Nigeria as its main market is a sole testimony to the fact that we are ripe for business. And that is the reason I'm standing here before you, for us to enlighten one another on innovative ways to globally position our indigenous beauty and makeup brands" Says Idy Enang, the Managing Director of L’Oréal Central West Africa.
Also, the growth rate in this sector is mostly driven by the growing population which in turn translates into a strong consumer base. This particularly includes the young and the middle class population, increasing urbanization, improving levels of education, the willingness to spend a larger proportion of their income on beauty products due to greater exposure to the western culture and rise of female independence. The industry is hence expanding to major cities, and businesses have also started to explore new venues for rejuvenation like spa, beauty and wellness centres across the country. With so much development in the sector, there is huge potential benefit for consumers utilizing the services.
As a result of such growth perspectives, it is easy to understand why Nigeria is targeted as a key country of focus by major international beauty brands like Unilever, P&G and L'Oreal, representing over 20% of the market share.
The Challenges
However, there are some interesting challenges the beauty and wellness industry currently face like with other industries.
The distribution network is complicated and unstructured. The sector is wholly unorganized in the way services are accessed and rendered to consumers.
The need to adapt the products to local consumers'requirements: for instance, make-up needs to be adapted to skin colour and texture.
Small market players are living in the shadow of big international brands.
Despite fierce competition in the sector, there is no set benchmark for quality.
On the business side there is no efficient tool to manage the bookings, appointments, and payments.
