Estee Lauder targets emerging African market, plans prestigious brand rollouts
Clinique, the firm’s second largest brand, will be launched in Nigeria this year then subsequently expand outwards to Mozambique.
MAC, the third largest brand, has already been launched in Lagos, Nigeria early this year as a result of the company being “inundated” with requests from consumers.
The company's African strategy will focus on cities with high growth potential, with locations such as Lagos, Abuja and Port Harcourt in Nigeria and the capitals of Ghana, Kenya, Tanzania, Mozambique and Angola being targeted.
Sue Fox, Estee Lauder’s managing director for sub-Saharan Africa, said that the twin launches will take advantage of the region’s emerging middle class, as well as demand for cosmetics amongst the established well-travelled and wealthy sections of the population.
Potential of the brands
Fox told Reuters in an interview:“There’s a massive interest from consumers there in international brands. We’re very excited about the potential of MAC in Nigeria.”
“That’s led us to pursue a strategy with MAC that will ensure that we’re able to bring the brand to consumers in other markets.”
In addition to its new rollouts, the company will also add new stores for MAC in Botswana and Zambia in 2014, with the brand set to enter three or four more countries over the next year.
A long-term prospect
Fox said: "The potential of Africa, we believe, is extremely positive, and we wouldn't be entering unless we believe that there was long term sustainable growth."
"Our target consumer is the emerging middle class, the established middle class and that affluent African consumer who's probably extremely well-travelled and very brand-savvy."
However, she also clarified that Africa is considered a“long-term build”despite its current economic growth and youthful population, due to its lack of facilities for retail space.
Regarding the overall market situation, she said:"The concept of department stores doesn't really exist outside of South Africa. I think there are great opportunities for retailers and for mall developers in sub-Saharan Africa. Brands want to be there."
Africa and cosmetics
According to Euromonitor, the personal care and beauty sector has ballooned from $439.m in 2006 to $595.8m in 2011, with a further increase to $620.2m in 2016
A 2011 report by the African Development Bank claims that the African middle class had grown by 2010 to 34 percent of the population, or 350 million people.
Another report from the same year claims that middle-class spending on consumer products such as cosmetics is driving much of Africa’s GDP expansion, which has averaged around 5.2 percent per year since 2001.