Successful business decisions are based on solid market research. Here is some summarized research on different beauty sectors in Nigeria. Done on behalf of @BodyKiss MissMeiya:
Beauty and Personal Care in Nigeria
Sep 2014 | Pages: 82
Price: US$2,400
EXECUTIVE SUMMARY
Competition and targeting new demographics leads to strong growth in 2013
Competition and advertising were major factors in the performance of beauty and personal care in 2013. More celebrities became brand ambassadors, and campaigns for a number of products in beauty and personal care were also targeted towards children, which is a major demographic group in the country. Local manufacturing also increased in 2013 compared with previous years, when the marketing of imported products was the dominant characteristic of the market. Increasing disposable incomes also continued to boost purchases of beauty and personal care products. Globalisation and the glamour portrayed by the media, both local and international, also created the desire for the means to improve self-worth and esteem through the use of beauty and personal care products. In oral care there was an advertising war in toothpaste, with existing companies and new entrants jostling for share.
Task-specific brands and vigorous marketing and advertising activities sustain value sales
Task-specific brands continue to enjoy patronage in the market. These products hint at elitism, and hence are rapidly becoming favourites amongst the middle- and high-income groups. Products such as deodorants and body wash/shower gel fall into this category. The competitiveness in the market is increasing, and new products are being introduced, accompanied by various advertising strategies. Thus, the growth in 2013 was faster than the review period average. 2013 witnessed an increase in the commemoration of Oral Health Day and Global Handwashing Day as part of strategies by companies to draw attention to their products. Advertising also continued to grow, with the new model of outdoor marketing, whereby advertising vans are paraded in the city, along with the use of the Bus Rapid Transport (BRT) in Lagos state, the informal commercial capital of the country, which has since been replicated in other parts of the southwest of the country and the Federal Capital Territory.
Domestic production gains traction
The huge dominance of foreign brands and companies in the Nigerian business environment is gradually giving way to local brands. There is a gradual shift from only importing foreign products to local manufacturing. Companies are gradually building plants and producing within the country to compete with foreign brands. Most of these products, however, are targeted towards lower-income consumers, which form the bulk of the population. Evans Industries, like Orange Drugs, has shifted from just marketing imported products to the local manufacturing of consumer goods. The growing enforcement of the ban on imported soap, which was put in place in 2004, was responsible for this. These companies, however, still rely partly on foreign contacts for technical expertise in some quarters. Given the concern around the quality of both locally manufactured products and imported products, in the last quarter of 2013 the Nigerian government inaugurated the National Steering Committee on the formulation of a National Quality Policy. This policy will also raise the bar in terms of standards of local production.
Store-based retailing remains the dominant channel for distribution
With the increase in the construction of shopping malls in the country across different cities, hypermarkets and supermarkets are continuing to gain share of distribution in beauty and personal care. However, open markets still lead in terms of distribution, although this channel continues to lose share due to increasing modernisation of retail in Nigeria, whilst independent small grocers is growing well as it adapts to a more modern retail environment. The convenience and ambience of stores offer middle- and high-income consumers a stress-free shopping experience compared with open air markets, which are often crowded and unpredictable. The specificity of prices and the absence of haggling also make these stores attractive.
Positive performance expected in the forecast period
With the 2014 forecast for the Nigerian population put at 175 million, it is expected that beauty and personal care will see a positive value performance at constant 2013 prices, influenced by an obvious increase in the population, and also in disposable incomes, part of which will come from the already proposed N4.6 trillion budget at the federal level and several billion at the state level. As the internet penetration rate is also increasing through internet-enabled mobile phones, direct advertising and marketing will also influence spending on beauty and personal care products in the forecast period. Research done by Euromonitor, a UK-based market research firm. You can the purchase detailed analysis reports from them. |
Sub categories within the Beauty industry: MissMeiya:
Baby and Child-Specific Products in Nigeria
Sep 2014 | Pages: 21
Price: US$900
EXECUTIVE SUMMARY
TRENDS
Baby and child-specific products saw a positive performance in 2013, as marketing activities and the rising baby population helped to drive sales. As the category became more competitive, producers drove their brands with increased marketing activities, which helped to create awareness of the benefits of baby and child-specific products. Furthermore, the year-on-year growth in the baby population also contributed to the increase in value sales, due to new consumers entering the market.
COMPETITIVE LANDSCAPE
PZ Cussons Nigeria led baby and child-specific products in 2013 with a 27% value share. The company has a long-standing presence in Nigeria, and its Cussons Baby brand range is popular. Furthermore, the company has an in-depth understanding of the market; developing new products to meet the changing needs of consumers. The company also operates an effective distribution network which covers the Nigerian market. The company was followed closely by Unilever Nigeria in 2013.
PROSPECTS
The rising baby population, marketing activities and economic improvements will help to push growth in baby and child-specific products over the forecast period, with a value CAGR of 1% at constant 2013 prices. As the category becomes more competitive, producers are expected to increase their marketing activities with advertising and brand extensions, whilst seeking new market opportunities over the forecast period. The rising baby population will also help to grow sales, as parents will continue to find better ways of keeping their children healthy. Furthermore, an expected improvement in the economy will help to boost consumers’ confidence in spending more on baby and child-specific products. MissMeiya:
Bath and Shower in Nigeria
Sep 2014 | Pages: 22
Price: US$900
EXECUTIVE SUMMARY
TRENDS
Nigerian consumers are becoming more sophisticated, and increasingly desire products with added-value rather than simple bar soap, boosting value sales. Poorer consumers are trading up from cheaper laundry soaps, whilst more consumers are purchasing more expensive products, such as body wash/shower gel. There is also intense competition amongst producers of bar soap, with advertising, an increase in the range of brands (such as Dettol’s wide range of “natural” products), and higher visibility in stores.
COMPETITIVE LANDSCAPE
PZ Cussons Nigeria led bath and shower with a 30% share of retail value sales in 2013. The company’s leading brands – Joy, Imperial Leather, Premier Toilet Soap and Cussons – have a long-standing presence in the Nigerian market, driven by advertising and relatively cheaper prices, hence commanding strong consumer loyalty. The company’s lead also stems from its strong distribution network, and from its ability to develop and extend brands to meet the changing market dynamics. Its strength is drawn mainly from bar soap.
PROSPECTS
With the competition expected to drive marketing activities, and anticipated strong economic growth, bath and shower is expected to see a positive value CAGR of 1% at constant 2013 prices over the forecast period. Producers are expected to drive their individual brands in competing categories with innovative marketing activities such as price discounting, promotional sales and direct advertising through the traditional channels of print and electronic media. The anticipated positive economic performance will also boost consumers’ confidence, as rises in disposable incomes will enable them spend more on bath and shower products. Brand extension and innovation by producers will also be key to the forecast performance, as task specification and consumer sophistication are expected drive brands in the premium segment. MissMeiya:
Bath and Shower in Nigeria
Sep 2014 | Pages: 22
Price: US$900
EXECUTIVE SUMMARY
TRENDS
Nigerian consumers are becoming more sophisticated, and increasingly desire products with added-value rather than simple bar soap, boosting value sales. Poorer consumers are trading up from cheaper laundry soaps, whilst more consumers are purchasing more expensive products, such as body wash/shower gel. There is also intense competition amongst producers of bar soap, with advertising, an increase in the range of brands (such as Dettol’s wide range of “natural” products), and higher visibility in stores.
COMPETITIVE LANDSCAPE
PZ Cussons Nigeria led bath and shower with a 30% share of retail value sales in 2013. The company’s leading brands – Joy, Imperial Leather, Premier Toilet Soap and Cussons – have a long-standing presence in the Nigerian market, driven by advertising and relatively cheaper prices, hence commanding strong consumer loyalty. The company’s lead also stems from its strong distribution network, and from its ability to develop and extend brands to meet the changing market dynamics. Its strength is drawn mainly from bar soap.
PROSPECTS
With the competition expected to drive marketing activities, and anticipated strong economic growth, bath and shower is expected to see a positive value CAGR of 1% at constant 2013 prices over the forecast period. Producers are expected to drive their individual brands in competing categories with innovative marketing activities such as price discounting, promotional sales and direct advertising through the traditional channels of print and electronic media. The anticipated positive economic performance will also boost consumers’ confidence, as rises in disposable incomes will enable them spend more on bath and shower products. Brand extension and innovation by producers will also be key to the forecast performance, as task specification and consumer sophistication are expected drive brands in the premium segment. MissMeiya:
Colour Cosmetics in Nigeria
Sep 2014 | Pages: 22
Price: US$900
EXECUTIVE SUMMARY
TRENDS
Colour cosmetics saw an impressive performance in 2013, with a 12% increase in current value terms. The average Nigerian consumer of colour cosmetics is influenced by Western culture, and the rising trend of global producers using the internet and satellite TV to promote their brands helped to boost value sales in 2013. Again, the number of younger women and professional women who use colour cosmetics as a confidence booster and beauty regimen increased in 2013, orchestrated by a rise in disposable incomes amongst the middle-classes.
COMPETITIVE LANDSCAPE
Revlon led colour cosmetics in Nigeria in 2013, with an 8% value share. The company leverages its brand presence in nearly all categories, with a wide and effective distribution network to further its leading position. Furthermore, most of the company’s brands are positioned in the mid-priced range, which appeals to price-sensitive consumers, and the company enjoys huge consumer loyalty due to its long presence in the market.
PROSPECTS
Colour cosmetics is expected to post a positive value CAGR of 1% at constant 2013 prices over the forecast period. Increasing numbers of young women and professional women with a tendency to follow global fashion trends will help boost value sales over the forecast period. It is anticipated that the economy will grow strongly over the forecast period, which will lead to higher disposable incomes and enable consumers to spend more on colour cosmetics, thereby boosting value sales. Furthermore, marketing activities due to the increased competition will further boost growth. MissMeiya:
Deodorants in Nigeria
Sep 2014 | Pages: 18
Price: US$900
EXECUTIVE SUMMARY
TRENDS
Demand for deodorants increased strongly for the last five years, excluding the economic crisis of 2009, and products are increasingly visible in a wide variety of retail outlets, including big supermarkets such as Shoprite and Park ‘n’ Shop. The use of deodorants is not traditional in Nigeria, despite the hot and humid weather, due to low affordability of consumers in the past. However, with increased Westernisation and growing affordability, the category was able to record strong growth from a low base. At 12% in current value terms, the growth rate in 2013 was faster than the review period average of 9% in current value terms. There were more people using deodorants in 2013, and with greater frequency than in the review period, encouraged by producers’ increasing marketing activities and consumers’ higher incomes.
COMPETITIVE LANDSCAPE
Unilever Nigeria led deodorants in 2013 with a 29% retail value share. The company markets some of the leading and most popular brands in the category, such as Brut, Sure and Axe, and has an effective distribution network and marketing activities. The company also benefits from its long-standing presence in Nigeria, with consumers trusting the quality of its brands.
PROSPECTS
It is expected that over the forecast period deodorants will increase by a value CAGR of 1% at constant 2013 prices. As the number of young adults and professionals increases in the forecast period, value sales of deodorants are expected to be boosted by these consumer groups. Furthermore, the positive economic forecast and competition-driven marketing activities will help to push forecast growth. MissMeiya:
Depilatories in Nigeria
Sep 2014 | Pages: 16
Price: US$900
EXECUTIVE SUMMARY
TRENDS
Demand for depilatories is still fairly low in Nigeria, but with increased Westernisation and rising incomes, consumers are spending more on such products. The category also benefited from widening retail distribution, with an increased presence in particular in modern supermarket chains such as Shoprite and Park ‘n’ Shop. The number of professional women and young women who use products in this category is on the increase. Consumers are striving for safer and more hygienic methods of body hair removal, which products in this category offer. MissMeiya:
Fragrances in Nigeria
Sep 2014 | Pages: 20
Price: US$900
EXECUTIVE SUMMARY
TRENDS
Increased marketing activities by producers and importers helped to drive the positive performance of fragrances in 2013. Producers and importers benefited from the rise in consumers’ disposable incomes, increasing sales due to advertising and wider distribution. More consumers were able to afford products in the category, whilst established users traded up to higher-quality brands. Furthermore, as a result of increasingly urban lifestyles, most consumers were becoming more sophisticated in terms of their personal image, and gave priority to their public perception. These factors led to a rise in the number of consumers using fragrances in 2013, thereby resulting in the growth of the category.
COMPETITIVE LANDSCAPE
Elizabeth Arden led fragrances in 2013 with a retail value share of 4%. The company’s brands, particularly 5th Avenue, are well-known and widely distributed, with high demand for its premium women’s fragrances.
PROSPECTS
Over the forecast period fragrances is expected to see a positive value CAGR of 2% at constant 2013 prices. Forecast growth is expected to be driven mainly by marketing activities, economic improvement and the sophistication of consumers, who will strive to improve on and maintain their personal image and public perception. Forecast growth will be further boosted by new consumers entering the category, especially from the growing young adult population. MissMeiya:
Hair Care in Nigeria
Sep 2014 | Pages: 23
Price: US$900
EXECUTIVE SUMMARY
TRENDS
Growth in hair care was strong in 2013, with a retail current value increase of 12%. The rise of internet and cable television usage had a cultural impact on the category, with many consumers of hair care products being influenced by international celebrities, thereby helping to grow the category. Furthermore, growth in the population led to the entry of new consumers to hair care, especially young females of school age, which also helped to boost the growth of the category.
COMPETITIVE LANDSCAPE
SoftSheen-Carson Laboratories led hair care in Nigeria with a 13% share of retail value sales in 2013. The company’s Dark & Lovely brand is popular amongst consumers, who continue to show strong loyalty to the brand due to its reputation for quality and its long-standing presence in hair care in Nigeria.
PROSPECTS
It is expected that hair care will perform fairly well over the forecast period, with a value CAGR of 1% at constant 2013 prices. Growth will be strengthened by the expected rise in consumers’ disposable incomes due to the expected strong economic performance, and competition-driven marketing activities such as new product launches, innovative advertising and brand extensions. MissMeiya:
Men's Grooming in Nigeria
Sep 2014 | Pages: 19
Price: US$900
EXECUTIVE SUMMARY
TRENDS
Men’s grooming recorded impressive growth in 2013, with a 12% increase in retail current value terms. The increasing sophistication of upper- and middle-income consumers, spurred by rising incomes, led to them trading up to higher-quality grooming products. Producers also helped to boost growth in the category in 2013, as they intensified their distribution networks to seek new distribution channels outside of the known traditional outlets, given the potential of the category.
COMPETITIVE LANDSCAPE
Procter & Gamble Nigeria led men’s grooming in 2013 with a 44% retail value share. The company has a brand presence in almost all categories, and enjoys a reputation for high-quality products amongst consumers, with its Gillette brand range being extremely popular. The company, however, still strengthens its brands with advertising, which covers practically every medium. Furthermore, its distribution network is robust and effective, with national coverage.
PROSPECTS
Men’s grooming is expected to see a value CAGR of 1% in the forecast period at constant 2013 prices. This growth will be driven by the expected positive economic performance over the forecast period, as consumers’ disposable incomes are expected to rise and enhance their purchasing power. Furthermore, rising sophistication and consumers striving for more convenient ways of grooming, and new product development, driven by advertising, will help to spur growth over the forecast period. MissMeiya:
Oral Care in Nigeria
Sep 2014 | Pages: 22
Price: US$900
EXECUTIVE SUMMARY
TRENDS
Oral care saw a positive performance in 2013, with retail current value growth of 12%. Growth in the category can partly be attributed to the growth in the population, which resulted in new consumer groups entering the market. Furthermore, due to the competitive pricing in the category and the presence of many brands, producers drove their individual brands with strong marketing activities and advertising in 2013, which helped to improve the performance of oral care.
COMPETITIVE LANDSCAPE
Unilever Nigeria led oral care in 2013 with a 35% retail value share. The company’s Close-Up brand is very popular amongst consumers, driven by sustained advertising support and consumer loyalty due to its long-standing presence in the Nigerian market. Whilst the company leverages its robust and wide distribution network to expand sales, it also produces different flavours under the Close-Up brand, which offers consumers choice, thereby systematically keeping them within the company’s brand.
PROSPECTS
It is expected that oral care will see a positive performance over the forecast period, with a value CAGR of 1% at constant 2013 prices. The need for proper oral hygiene, the growing population and marketing activities by producers will drive sales in the category over the forecast period. Consumers, especially young adults and professionals, spurred by rising incomes, will increasingly appreciate the benefits of regular usage of oral care products, which will help to grow the category over the forecast period. MissMeiya:
Sets/Kits in Nigeria
Sep 2014 | Pages: 17
Price: US$900
EXECUTIVE SUMMARY
TRENDS
Sets/kits increased strongly in 2013, with current value growth of 10%. The competitive price advantage that brands in the category offer consumers compared with when they buy the products separately helped to increase value sales in 2013. Consumers are increasingly finding it more convenient to use sets/kits, as they can purchase various products under one trusted brand name. Importers also helped to grow the category in 2013 through robust distribution strategies. MissMeiya:
Skin Care in Nigeria
Sep 2014 | Pages: 21
Price: US$900
EXECUTIVE SUMMARY
TRENDS
Skin care performed well in 2013, with 12% growth in current value terms. Growth in the category was driven by intense marketing activities by producers, as they competed for value share using discounted prices, advertising and wider distribution networks. Furthermore, the weather conditions are extreme in most parts of the country, with consumers striving to control the effects of the environment on their skin with skin care products, with sales also boosted by the rising population, particularly the urban population.
COMPETITIVE LANDSCAPE
Beiersdorf led skin care with a 13% share of retail value sales in 2013. The company benefits from the growing popularity of its Nivea Visage and Nivea Body brands, given their added-value advantage and competitive price positioning. The company also gradually improved its distribution strategy, which helped it to penetrate the market by increasing its presence in retail channels. Unilever Nigeria followed Beiersdorf with a 12% share of retail value sales. The company leverages the popularity and trusted presence of its Vaseline, Dove and Lux brands, as most consumers have a sentimental attachment to these brands because of their reputation for quality.
PROSPECTS
Skin care is expected to see a positive performance in the forecast period, with a retail value CAGR of 1% at constant 2013 prices. Economic improvements are expected to support the positive development of skin care over the forecast period, as consumers’ confidence will grow along with rising disposable incomes, thereby increasing spending on skin care products. Population growth, marketing activities and demand for value-added products due to rising disposable incomes and consumer sophistication will help to consolidate the expected forecast growth. MissMeiya:
Sun Care in Nigeria
Sep 2014
Price: US$900
EXECUTIVE SUMMARY
TRENDS
Sun care in Nigeria is a negligible category, with low sales amongst expatriates. The Nigerian population has no interest in such products, since Nigerians do not generally have an adverse reaction to sun exposure. However, the category could grow well over the forecast period, given the increase in the number of expatriates in the country, driven by the oil, construction and retail industries. Research done by Euromonitor, a UK-based market research firm. You can the purchase detailed analysis reports from them. |
I also recommend subscribing to this news feed for industry news: http://cosmetics.einnews.com/country/nigeriaAn article in Business Day Nigeria from last year: MissMeiya:
Cosmetics and pharmaceuticals in Nigeria
November 6, 2013 | Filed under: Columnists | Author: Tayo Fagbule
"...Marketing, sales and R& D also matter in Africa’s home and personal care market. The market (cosmetics included) was valued at $12.9 billion in 2011. Euromonitor, a UK-based market research company, reckons that Nigeria’s beauty and personal care sector was worth $595.8 million in 2011, up from $439.8 million in 2006. By 2016, Nigeria’s young and aspiring population will push sales to $620.6m.
International brands like L’Oreal and Estée Lauder want to tap into this growing market. L’Oreal markets its products through its Dark ‘n’ Lovely brands while Estée Lauder just opened an outlet at the The Palms shopping mall. Clinique and MAC are Estée Lauder’s second and the third largest brands.
Last year, Jean-Paul Agon, chairman/CEO of L’Oreal, said the weight of ‘New markets’ i.e. markets other than Western Europe and North America, which are increasingly the company’s number one geographic zone, will continue to grow. These New markets are characterised by urbanisation, rapidly growing middle class, strong beauty and quality aspirations, with low product penetration.
L’Oreal says “The New Markets all have something in common: the rapid emergence of an urban middle class, whose beauty needs and desires are growing fast thanks to the combined impact of increased income and advances in urbanisation and infrastructures, including sanitation. Furthermore, these countries have very strong traditional beauty rituals, as in Brazil and India. In these countries there is a powerful aspiration for quality, and there are strong desires for beauty to be fulfilled.”
Global cosmetic brands beating a path into fast growing emerging markets, are “developing libraries of options” i.e., global brands tailored to African markets. They are conducting research and development into skin and hair types.
Cosmetic brands are also partnering with distributors, hairdressers/stylists and salons organising events e.g., Dark ‘n’ Lovely mobile beauty salon.
Unilever and Procter & Gamble, two of the five global companies, can testify to how urban growth, a young population and a rising middle class have driven sales of their respective products.
That said, the promise Nigeria holds has pitfalls. One major constraint is the insufficient number of sophisticated department stores or malls to reach consumers. However, pharmacies like HealthPlus are building a network of outlets. For those looking to sow and grow brand loyalty in a new market; the future is where the opportunity lies. In other words, Nigeria’s pharmaceuticals and cosmetics market is for long distance runners. Those who opt to run this marathon can see aspiration is evident, immense demographics and growing purchasing power.
Local manufacturers, wholesalers and retailers, too, should prepare to reap from these opportunities. These sectors, which account for close half of the medium to small enterprises in Nigeria, can start “building from within”, to borrow the theme of the just concluded GT Bank Lagos Fashion and Design Week. Some may be building already. The Kinky Apothecary, a natural hair company, prides itself as “the first kinky hair supply store in Lagos”. Its eponymous blog gives tips and tricks for stress free tresses to women who want to keep their natural hair."
http://businessdayonline.com/2013/11/cosmetics-and-pharmaceuticals-in-nigeria/ |
