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the future. It reportedly invested $250m in the Africa,” reports Sisley regional director for the pay full price for products at authorized retailers. new site, the largest US non-oil investment in Middle East and Africa Sébastien Gautier. “It’s “Well-known brands such as Clinique or the country. P&G already has a factory in Ibadan. a very rich and very populated country, but the MAC have been around for a number of years, L’Oréal, which opened a Nigerian subsidiary problem is distribution. There is no distribution as individual traders purchase these products in 2010, is present there with its Garnier, today in Nigeria for beauty.” abroad to resell them, often in unauthorized L’Oréal Paris and Softsheen-Carson brands, stores and open markets,” says Bengoechea, local reports, and has organized roadshows at “ Sub-Saharan Africa. “In addition, counterfeit referring to a problem that is recurrent across and is considering opening a factory in the future. Maybelline also launched in Nigeria with versions of many prestige brands are often easily Counterfeit versions of many targeted products earlier this year, according to top universities around the country to support prestige brands are often found and at a much lower price point. This means that when a manufacturer offcially enters the launch. easily found and at a much a new African market, it might have to spend Another frm that has been particularly active lower price, [so] when a a considerable amount educating consumers in Nigeria is India’s Godrej, which acquired manufacturer enters a new about their products and the benefts of buying local players Tura and Darling Group Holdings from authorized stores.” in 2010. African market, it might Indeed, ELC-owned MAC’s local website As well as being a major economy in itself, have to spend a considerable features a warning that its two standalones Nigeria is also a hub for companies seeking to amount educating consumers are “the only authorized MAC Cosmetic stores expand throughout Western Africa—a strategy in Nigeria,” despite an abundance of online employed by L’Oréal, for example. about their products and references to outlets offering the brand in the benefts of buying from the country. Local players emerge authorized stores Nigeria is not an easy country in which An increasing number of local players are to do business, with set-up costs high and also emerging, notably in categories such as infrastructure issues and political hurdles deodorants and color cosmetics, according ” manifold. The country may have plenty of to Euromonitor. Local haircare manufacturer Euromonitor International research potential, but for most, it is likely to be a long- manager Izaskun Bengoechea Soulmate Industries is the leading player, while term investment. n in make-up, House of Tara and Sleek Nigeria have also been building a strong presence. “Lots of perfume companies are already But despite the predominance of mass, well distributed, because it’s easier to be in market players report avid demand for prestige perfumery, but if you talk about make-up, Nigeria beauty market by main category products, and wealthy Nigerians are already skincare and full three-axe distribution, it Category Share % strong consumers of prestige beauty products requires proper representation in distribution, Bath and shower 40 when they travel to South Africa, Europe and the otherwise it’s not an option,” he continues. US, and are well aware of brands. Monaco-based distributor Africasie/Distrimarq Skincare 14 “Nigerians are very thirsty for luxury brands,” opened a subsidiary in Nigeria in July 2013. It Haircare 13 says South African niche retailer Metropolitain offers a variety of international brands, including Make-up 4 Cosmetics co-founder Wilfrid Moulin. “They the P&G Prestige and Coty Prestige portfolios, Source: Industry sources understand luxury and luxury works very well. Guerlain and Bulgari. Moët & Chandon sells more champagne in Nigeria than in South Africa.” Market challenges abound Nigeria factfle Estée Lauder Companies (ELC) is one of Beyond distribution, however, there are many Population: 177,155,754 the frontrunners when it comes to prestige in other signifcant factors holding back the Nigeria, and opened two stores for MAC in market. The parallel market is extremely strong– Total beauty and personal care Lagos last year. According to reports, a boutique many South African distributors freely supply market sales 2013: in Abuja is also on the cards. The lack of prestige the whole of Africa with products, according to $2.2bn, +10% vs 2012 retail in the country, however, is the main factor industry sources, while independent retailers buy GDP per capita (PPP): $2,800 holding the selective market back. products abroad to stock in their stores. All this “Nigeria now has the biggest economy in makes the consumer question why she should Source: CIA World Factbook September-October 2014 - N°19 - BW Confidential 55