Page 54 - BWConfidential19_2

Nigeria country analysis Market watch: Africa Not so easy It may be one of the most promising markets in Africa, but doing business in Nigeria is tough and the prestige segment is still at a nascent stage by Alex Wynne ith its population of 177 million and fraction of the market. The frst ever Makeup in Wa growing middle class estimated to Nigeria conference took place in April this year, account for 23% of the population, sponsored by local company House of Tara and Nigeria is tipped as one of the most L’Oréal-owned Maybelline. promising markets in Africa. The internet is also playing a role in growing Despite having minimal demand, with young Nigerian consumers, access to formal retail, it who are avid users of social media, boosting is already the second- awareness of brands, even those that are not yet biggest beauty market present in the country. on the continent, and its economy has An infux of investment quadrupled in size As such, Nigeria tops the list when it comes to since 2000. Nigeria’s investment from the leading beauty players, government has particularly when it comes to mass, the channel put a strong focus that most players are dipping their toes into, on diversifying the while prestige remains relatively anecdotal. country’s economy Unilever, P&G and L’Oréal are the market away from oil in recent leaders, accounting for 17% of the Nigerian years, and the country beauty market, according to industry sources. is seeing an infux Unilever alone accounts for 10% of the market of investment. through its local operation Unilever Nigeria, of “With over 170 million which the consumer-goods giant owns 51%. consumers, average disposable However, even though it is the market leader, incomes topping $1,200 per capita Unilever only offers its Pears, Lux, Vaseline and in 2013, and the recent rebasing of the Lifebuoy brands in the country. credit: istock economy, [Nigeria] is now in the sights of every In its annual report for 2013, the company major beauty manufacturer,” Euromonitor acknowledged that both infrastructure diffculties International research manager Izaskun and security issues in certain regions had made Bengoechea comments. the business climate diffcult last year, while In addition, more than 60% of the Nigerian competitor PZ Cussons said that unrest in the population is under 25, and its consumers are north of the country had affected its operations seen as some of the most aspirational on the in recent months. continent. Nigeria’s booming “Nollywood” P&G, meanwhile, has made Nigeria a central movie industry, which produces more flms part of its strategy, building a new factory in than Hollywood annually, is a key driver of Agbara to make the country its hub for West the image-conscious culture, a boon for the Africa. Initially the 40.2 hectare site, which beauty industry, especially when it comes to opened in March, will be dedicated to producing demand for make-up, which as yet remains a diapers before expanding to other categories in 54 September-October 2014 - N°19 - BW Confidential