By ANITA POWELL
Published: November 15, 2012
JOHANNESBURG — Suzie Wokabi had sticker shock when she returned to her native Kenya in 2007 and saw that the high-end cosmetics she had used as a MAC makeup artist in the United States were in short supply — and three times as expensive.
So after some years of preparation, Ms. Wokabi, now 35, raised about 16 million Kenyan shillings, about $187,000, to start her own brand of cosmetics, SuzieBeauty.
She joined a small but growing group of African entrepreneurs breaking into the continent’s beauty and personal care market, a sector now dominated by international giants like Unilever, Procter & Gamble and L’Oréal. And while sales are increasing, thanks at least in part to the continent’s continuing economic boom, the companies still face the challenges of expanding beyond their own region and mastering Africa’s sprawling informal trade system.
SuzieBeauty had its debut in January and its products are now available in nine stores, mostly specialty drugstores in Nairobi. The nine-item range offers makeup in saturated, bold colors, like the deep reddish-purple Zamba lipstick, which sells for 1,000 shillings.
The products’ names are a nod to their origins: zambarau means purple in Swahili, and a shimmery olive-green eyeshadow is dubbed Safari.
Ms. Wokabi said her research showed that SuzieBeauty products were the only Kenyan-designed cosmetics on the market. “SuzieBeauty is for the African woman,” she said. “It’s the first Kenyan cosmetics line, and I’ve created it for us. For the first time, we have something that belongs to us.”
Sven Torfinn for the International Herald Tribune
The colors used by international brands are not always good for African women, she said. Also, “the humidity levels, the climate, the sun, the African sun, it changes something. I’ve had to take all of that into consideration.”
The beauty industry in the Middle East and Africa was estimated at about $20.4 billion in 2011, according to the market research company Euromonitor International. South Africa alone represented $3.9 billion; Nigeria and Kenya are second and third among sub-Saharan nations, with Kenya’s market totaling more than $260 million.
In comparison, the Asian market was estimated at $114 billion in 2011.
Over all, Africa is the next frontier for global luxury goods brands, said Fflur Roberts, Euromonitor’s global head of luxury goods, noting that the continent is projected to have double-digit economic growth by the end of the next decade.
“However, consumers’ appetite for luxury goods and the extent to which aspiration consumption culture might take root in frontier Africa are difficult to predict,” Ms. Roberts said. “What seems clear is that any new luxury goods venture into frontier Africa needs to be motivated by long-term rather than short-term potential. The most significant growth stories — and returns on investment — will probably not happen until post-2020.”
She warned, however, that for the smaller and midsize global players in the market, “short-term investment could present more pitfalls than opportunities. This is because the sweet spot of the opportunity is simply too far into the future.”
As head of what is now a small local company, Ms. Wokabi says she feels her brand’s future is rosy: She conducted focus groups that showed the average Kenyan woman was willing to spend as much as 20 percent of her salary on beauty products.
She sees her customers as young, educated women working in the city and making about 600,000 shillings a year, much more than Kenya’s average annual per-capita income of about 153,685 shillings, an estimate from the International Monetary Fund.
Ms. Wokabi’s products have been on the shelves for less than a year. While she could not offer sales figures, she did say that earnings were covering costs — and that Zamba, the purple lipstick, is selling briskly.
She now wants to move her products into other East African countries, and then perhaps to Nigeria. She might eventually venture into hair products, too. “I’d love SuzieBeauty to be an African-born cosmetics giant. My priority is to keep it Africa-wide,” she said.
Another emerging African beauty brand, Africology, has taken a different path, linking its organic, back-to-nature ethos to a potato.
Renchia Droganis, a life coach and holistic healer, began making bespoke organic lotions and preparations for clients from the “African potato” plant that was growing wild on her farm in Knysna, along South Africa’s southern coast. The edible root, known as hypoxis hemerocallidea, also is known as star flower and is widely used in traditional African medicine.
Liza Julius, Ms. Droganis’s daughter, said that clients asked for more, and that prompted her to create the brand. The first retail store opened in 2010.
The flagship shop in Johannesburg offers a full-body wrap featuring African potato and marula oil, meant to soften and hydrate skin, for 800 rand, or $92. The potato also appears in a popular body butter that includes marula; rooibos, or red bush; and aloe vera, and sells for 230 rand.
While the company does not release sales, Silvana Bottega, chief executive of the Southern Africa Luxury Association, said that among high-end South African beauty brands, “only Africology has really broken the volume mold.”
And while “it’s relatively easy to get into one of the distribution houses,” Ms. Bottega said, what is not so simple for African brands is going international.
Yet Africology has done that, Ms. Julius said, beginning the process by placing its products in high-end hotels and resorts around Africa.
Customers “were coming to find us to purchase the products for home use,” she said, and the brand began to ship to stores in Turkey, Belgium and France. The company now plans to start distribution in the United States next year.
Another brand that has broken the national barrier is Bio-Oil, a stretch-mark treatment from South Africa now available in 38 countries.
Justin Letschert paid less than the equivalent of $500,000 for the company in 2000, buying it from the privately owned skin care company Union Swiss, based in Cape Town. He said Bio-Oil generated approximately $180 million in trade and retail sales in 2012, although little of that came from the continent.
One problem in Africa, he said, is distribution, with the continent’s flourishing informal trade practices making organized efforts all but redundant.
In Kenya, for example, the company must pay import duties of 40 percent. “But the informal traders pay nothing; they just drive in a truck and pay a bribe,” he said. “We can’t sell our product in Kenya because the informal product is 40 percent cheaper.”
For now, he said, the company’s strategy is to keep up its marketing for product awareness purposes, and to wait for the day when the retail systems improve.
So far, he said, the company’s hard-knock upbringing has been central to its success — and he predicts the same for other African entrepreneurs.
“Within Africa there is no support structure,” he said. “So you can be sure that if someone makes it here, they’re not going to have a problem elsewhere.”