Page 63 - BWConfidential19_2

was acquiring health and beauty business a 100m Kenyan-shilling ($1.1m) rebrand of Euromonitor International research analyst Interconsumer Products Limited (ICP), in Nivea last September to build its presence Izaskun Bengoechea comments. a bid to bolster its activity there. “ICP’s in the skincare segment. Meanwhile, Several brands have invested heavily in acquisition is an important milestone Swedish direct seller Orifame has been advertising in recent years to promote their for L’Oréal in Kenya. It broadens our making inroads in Kenya and surrounding products and increase sales, according product offer with accessible brands and countries. It expects to double its sales to industry sources, and such efforts are strengthens the group’s position in the between 2014 and 2016 by attracting local likely to be necessary for any new brands mass market. This acquisition will also women to sell its products, according to entering the market. local media reports. income segments, manufacturers will “As wealth flters down to the lower Local brands are also emerging. Suzie “ Beauty, for example, launched in 2011, and also have to invest heavily in educating is seeing success with its targeted makeup consumers about why prestige products Challenges are many, as duties on luxury products are products. “In every outlet we enter—to our are worth their premium pricing,” says Bengoechea, in reference not just to Kenya, delight—we are the highest seller,” brand high and rents for spaces in founder Suzie Wokabi says, admitting but also to many African markets. Brand awareness is on the rise, however. malls are quite expensive. that her competitors on the market are Kenya has one of the highest rates of essentially international brands that do On the other hand, there are not necessarily offer the right products for internet penetration in Sub-Saharan many opportunities and the Kenyan consumers, in terms of skin color Africa, with 41% of the population online, Kenyan market for beauty still and texture. according to L’Oréal, and is seen as The brand takes a multi-channel strategy, leading the continent when it comes to has to be exploited selling to beauty stores, pharmacies and mobile purchasing, according to a report from KPMG. In urban areas, some 95% of supermarkets, and has also begun opening Nadia Osman ” mall-based kiosks, Wokabi says. “We mobile devices are internet-enabled, says continue to increase our local distribution AT Kearney, thanks to government policies The Fragrance Lounge founder and have begun to speak to potential distributors outside of Kenya. We hope to favoring the integration and adoption of mobile technologies. be distributing Africa-wide in the next few While Kenya may not promise the accelerate our development in Eastern years,” she continues. impressive growth rates of other countries Africa,” said Geoff Skingsley, L’Oréal in Africa, its status as a relatively stable executive vice-president, Africa and Middle Long way to go for prestige market makes it nonetheless appealing for East zone at the time. When it comes to prestige, however, beauty companies who are in the market “To develop market presence in the the market still has a long way to go, as for the long haul and not just looking make region, acquisitions are a prudent move, there is very little distribution available to a fast buck. n as they address challenges in relation to high-end brands, with the exception of logistics, including regulatory issues and fragrances, which are also sold in some distribution,” Euromonitor International supermarkets. In addition, counterfeiting senior beauty and personal care analyst Oru and parallel are rife. Counterfeits account Kenya factfle Mohiuddin comments. for at least 10% of beauty products Population: 45,010,056 L’Oréal also offers educational initiatives sold in Kenya, according to sources, and for hairdressers and is working on consumers are often unaware if they are GDP per capita (PPP): $1,800 improved beauty retailing. In addition to buying genuine or counterfeit goods, as Beauty & personal care sales 2013: adding the Nice and Lovely brand—one they are often stocked in the same stores. $0.5bn, fat vs 2012 of Kenya’s market leaders—to its roster, As such, educating consumers is key. the acquisition provides the company with “Limited incomes mean that many Average beauty/personal care a new manufacturing base, as well as an consumers in Africa perceive brands such spend: $11.30 in 2013, versus $8.80 R&D activity in East Africa. as Nivea or L’Oréal to be premium and in 2008 Beiersdorf, too, has been investing in the therefore, prestige still has a long way country. Beiersdorf East Africa announced to go in terms of educating consumers,” Source: CIA World Factbook, Euromonitor International September-October 2014 - N°19 - BW Confidential 63