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important and we need to secure and reach magazines,” says Gautier, who set up Sisley’s distribution partner, usually establish a that clientele.” South African subsidiary in 2011. Recruiting contract for the whole of the Sub-Sahara, “We are starting to see more customers of and retaining good beauty advisors is also allowing their partners to plan a rollout to the color,” agrees niche retailer Metropolitain a challenge, he says. “It’s a very interesting rest of Africa. Cosmetics co-founder Wilfrid Moulin. operation, but it requires a lot of investment.” Moulin, whose distribution contracts for As such, more niche brands with less brands such as Dr Sebagh and Make Up For Targeted products fnd their market marketing impact tend to fnd South Africa Ever are a case in point, believes that when Needless to say, companies that have a diffcult country to establish themselves the time comes to expand, brands will be targeted their offer to a diverse consumer in. Nevertheless, demand is growing— reassured by having an established local base from an early stage are seeing the best Metropolitain saw growth of 18% in 2013, partner. “I think our suppliers will be more results. Estée Lauder Companies-owned MAC according to Moulin. at ease working with us than with someone Cosmetics and Clinique are good examples, new,” he says. and Iman Cosmetics has also built a strong Overestimated potential? visibility is the number of international tourists Another advantage of having strong brand Despite prestige’s importance, the majority “ of consumers, particularly in non-urban who travel from the rest of the continent to shop in South Africa’s malls. Avid consumers areas, are unable to access such products, People don’t really have a of luxury—Nigerians in particular, but also and brands have sometimes been accused of notion of what South Africa is. overestimating the market’s potential. consumers from Ghana and Angola—unable “People don’t really have a notion of what It’s almost 50 million people South Africa is,” says Moulin. “It’s almost 50 to buy luxury products at home, travel to South Africa to do so. and 80% of them don’t have million people, and 80% of them don’t have As such, having strong brand visibility in a bank account. It’s a great a bank account.” The offcial unemployment the country is doubly important, given the country that functions well, but level of 25% is actually closer to 40%, he estimated projected growth of Africa in the future. Nevertheless, Moulin warns, estimates. “It’s a great country that functions the economy is not as large as well, but the economy is not as large as “It is a good entry point, but the South people think people think.” African market is in no way representative of the rest of the continent; it has very According to data from The World Bank, Wilfrid Moulin ” South Africa has one of the widest divides different dynamics.” n between consumers in its highest and lowest income brackets—some 1.17% of the Metropolitain Cosmetics co-founder while 51.69% are in the bottom 10%. business in the country, according to the population is in the top 10% income bracket, South Africa prestige market by category company’s general manager and senior vice Nevertheless, luxury brands are arriving in Category % share president of brand development Desiree Reid. droves—Louis Vuitton has opened two stores Fragrance 52 “If your offer is not fully designed for that and Chanel and Dior have plans to enter the Skincare 35 particular market,” says Reid, “you may be market, according to sources. overestimating [its potential].” Part of the appeal of South Africa is that it Make-up 13 Estée Lauder Companies is the clear leader offers a foothold in the rest of the continent— Source: Industry sources in prestige, with a market share of around considered to be the “fnal frontier” for 50%, according to industry sources. Clarins consumer-goods companies—and a business also has a strong position, built through climate that is comparatively similar to that of South Africa factfle a presence in the market for around two the US and Europe. Population: 48,375,645 decades (longer than most other brands) and Many companies establishing their own GDP Per Capita (PPP): $11,500 its strong skincare focus. subsidiaries see it as a springboard to other Beauty and personal-care sales 2013: Newer entrants, meanwhile, often struggle markets, notably neighboring countries $3.7bn, +12% vs 2012 to gain a foothold and compete with the Botswana and Namibia, which already have a established brands. “To be successful in a certain amount of prestige distribution, due to Average beauty/personal-care spend: market like this you need to have in-store the expansion of South African retailers there. $70 in 2013, compared with $42 in 2008 visibility, good locations and visibility in Others, who choose to sign with a Source: CIA World Factbook; Euromonitor International September-October 2014 - N°19 - BW Confidential 59