L'Oréal targets Africa

13 December 2011

NAIROBI: L'Oréal, the beauty group, is planning to greatly enhance its position in Africa, as rising affluence broadens the potential target audience in the region.

The French cosmetics giant has recently established a new unit in Kenya, which is set to serve as a base for expanding its activity in East African markets like Burundi, Ethiopia, Rwanda, Tanzania and Uganda.

L'Oréal has been doing business in South Africa, where it runs an R&D centre, since 1963, and also runs divisions in Ghana, Morocco and Egypt, as well as rolling out a Nigerian subsidiary in September.

The organisation's new priorities in Africa are the haircare, bodycare and deodorant categories, led by its L'Oréal Paris, Garnier and SoftSheen-Carson businesses.

Its competitors include global players like Unilever and Beiersdorf, alongside numerous local firms, such as Kenya's Interconsumer Products and Haco Tiger Brands.

Currently, East Africa houses around 150m people, and tastes are evolving rapidly as wealth levels increase and customers become more knowledgeable regarding brands.

"A lot of the time when I go to the ladies' room, I will hang about and watch women groom themselves and you can tell that they are diverse and have a range of looks that they want to try," Patricia Ithau, L'Oréal East Africa's managing director, told The Nation.

"A big opportunity presented itself and we cannot ignore it. There is a developed personal care market here that we are looking to further tap into. We have been in the market mainly through traders and a structured distribution network had been lacking."

One favourable consequence of L'Oréal building a direct presence in Africa will be to lower prices. "Our entry into the market will subsidise the cost of these products and they will retail for less," Ithau said.

While this is likely to enable greater numbers of consumers to make category purchases in the long term, in the short term the core customer base is primarily due to be formed of comparatively affluent shoppers.

"To be honest, the kind of woman who uses our products is not the kind of woman who is worried about the economic situation," Ithau added.

More specifically, L'Oréal will take a nuanced approach to communications, coupling traditional marketing and on-the-ground strategies such as providing training for hairdressers.

"A lot of women put faith in their salons and hope they know what they are doing and often the salons are the greatest source of authority for women," Ithau said.

Data sourced from Middle East North Africa Financial Network/Business Daily Africa; additional content by Warc staff