The beauty and personal-care segment in much of east Africa is dominated by global companies such as L’Oréal, Estée Lauder, Unilever and Procter & Gamble, as well as a handful of established domestic operators. However, there is an emerging trend of local entrepreneurs – mostly women – developing their own brands.
Earlier in the year, Kenyan entrepreneur Suzie Wokabi sold her cosmetics business, SuzieBeauty, to Nairobi Securities Exchange-listed manufacturer Flame Tree Group (FTG) for a reported Ksh.45m (US$445,000). Her product line includes a full make-up range as well as application brushes. Wokabi founded the company in 2010 with ambitions of making it ‘the MAC of Africa’.
Back then, Wokabi didn’t have many peers, but today a number of entrepreneurs are breaking into the beauty and personal-care industry.
Some of these include:
Amagara Skincare – This Ugandan business was founded by communications consultant Siki Kigongo, and produces a range of natural body lotions and washes. The products are manufactured at Kampala’s Uganda Industrial Research Institute, but some of the packaging is sourced from China.
Keyara Organics – Kenyan TV personality Terryanne Chebet is the brains behind Keyara Organics, a producer of skin- and hair-care products. The company’s merchandise is manufactured locally and retails at health and beauty stores. It has also contracted a distributor that supplies outlets in the US and Europe.
Marini Naturals – The Marini Naturals product range includes shampoo, conditioner, hair-growth oil, curling butter, curling gel and moisturiser spray. Manufactured in Kenya’s capital Nairobi, the products are made from organic ingredients and essential oils, such as tea tree, neem, castor and peppermint.
Pauline Cosmetics – Kenya’s Nelly Tuikong abandoned a career in nursing to become an entrepreneur. It took her over four years – from 2009 to 2013 – to go from experimenting with making lip gloss to launching her brand, Pauline Cosmetics. When starting out, Tuikong faced all kinds of challenges, especially in terms of importing the products from Asia. Today the company manufactures a range of cosmetics products – including lipstick, lip gloss, mascara, face powder, eyeshadow, and make-up brushes – that retail at more than 40 outlets.
elsaKim – In August 2014, Kenyan Nduta Kinuthia founded nail-care products company EL, which has a portfolio of six different nail polish products trading under the brand name elsaKim. The products are manufactured in Poland, and the company focuses predominantly on sales to salons and beauticians.
Many of these companies cater to the growing demand for natural and organic personal-care products. There is a burgeoning trend among black women to wear their hair ‘naturally’ as opposed to using relaxers and synthetic hair.
The clientele for these young entrepreneurs are mostly middle to upper-income consumers living in urban areas. “Our target customers are women who are making a conscious effort to live in a more natural way with regard to their health, lifestyle and beauty. You could have relaxed hair, but be tired of using chemical-laden products – so you will use our sulphate-free shampoo, for example,” says Michelle Ntalami of Marini Naturals.
Discouraged by the unfavourable payment terms of large supermarkets, most of these businesses stock their products at small retailers – beauty shops, pharmacies and speciality stores – scattered across major cities and towns. Some also sell their products online.
“I kept thinking it should be some multinational company doing this, not me,” says Ntalami. “But I have since come to learn most consumers are not bothered by whether a product is made locally or internationally – so long as it is good quality, and it works for their hair.”
Others, however, believe multinational companies still have the upper hand.
“Many Ugandans believe what is imported is better than the local options. So our biggest competition is international brands like Nivea, Revlon [and] L’Oréal,” notes Siki Kigongo of Amagara Skincare.
Competition comes not only from international companies, but also from established local players. Kigongo singles out Samona and Movit, two Ugandan operators producing everything from shampoo, to soaps, to body lotions. They offer affordable pricing, have strong distribution networks, and invest significantly in marketing.
“Samona and Movit sell at very low prices, so when consumers see our products they think we are too niche. One of the challenges we face is gaining the loyalty that consumers – particularly women – have towards certain skin-care products. When we launched, we had great presence and people were talking about it, but four years later we are not as recognised – perhaps because of a lack of marketing,” says Kigongo.
These companies are still relatively small, with some of the founders even maintaining separate full-time jobs. That said, they all have ambitious growth plans, despite financing being an oft-cited hurdle. This year, Pauline Cosmetics wants to double its retail presence from 40 to 80 stores, and is considering entering Uganda and Rwanda; Keyara Organics is mulling a new men’s line; and Amagara Skincare is building a bigger production facility just outside Kampala – making way for the company to double its capacity from the current 500 litres per week.
The natural hair movement among black women globally, and the general greater appreciation for authentically African products internationally, are also creating opportunities for these brands to expand to the rest of the continent and beyond.
There are a few examples where home-grown cosmetics companies have been acquired by larger players, highlighting the potential that some of these companies have. At the time that FTG announced its acquisition of SuzieBeauty, the company’s CEO Heril Bangera said that the deal was a strategic opportunity for the group to tap into the “large and growing” cosmetics market.
“We’ve seen the brand is successful, so there is an opportunity now to use that as a base to grow it within Kenya and beyond… Within Kenya the present market size is about US$60m. We expect the east African (Kenya, Tanzania and Uganda) segment of the market to grow from the present $152m to $231m by 2018. So this is a special and a large opportunity for us. We believe it is an important area for us to venture into.”
According to Wokabi, SuzieBeauty needed a partner with the expertise and resources to take the brand to the next level.
Another example is L’Oréal’s 2013 acquisition of the health and beauty business owned by Kenyan company Interconsumer Products. The company’s well-known Nice & Lovely brand is targeted at the lower-end of the market. Much like the businesses looked at in this article, Interconsumer Products was started by entrepreneur Paul Kinuthia in the 1990s, using products mixed together in his kitchen.