Haiti’s formal personal care product sector shattered by earthquake
C&T companies were among those quick to contribute to aid to Haiti following the earthquake. So what’s the future for the domestic industry and imported cosmetics? ask Garry Pierre-Pierre in Port-au-Prince, Haiti, and Emma Jackson and Alan Osborn
The doors of Little Europe and other high-end boutiques in Haiti’s ravaged capital city have not experienced much traffic since an earthquake with the magnitude of seven on the Richter scale struck in January.
There has been little need for beauty and cosmetics products in Haiti since, with this poor country’s elite grappling with the problems caused by the deaths of roughly 200,000 people, and 1.2 million losing their homes. Another half a million people have left for provincial cities and abroad. Furthermore, the quake destroyed more than 60% of the buildings in this capital city that once housed about 3 million people.
Given such a blow to the commercial heart of the western hemisphere’s poorest country, it is little surprise that formal cosmetics trading has almost stopped.
“Business is dead,” said one clerk at Little Europe. “Most of the people who can afford our products have moved to Miami and New York.”
The airport duty free shop, which was a major selling venue for Dior, Chanel and others, remain closed even after the airport was reopened to commercial traffic in early March.
To be sure, there remains a demand for soaps, deodorants and other basic toiletries used by people on a daily basis. But most of them are imported as local producers have fared badly after the earthquake, with factories structurally destroyed. And with the dislocation of distribution, warehousing and retail caused by the disaster, the formal cosmetics trade is facing serious problems. Even Avon, that most decentralised distributor of cosmetics products, has suffered problems. Since the disaster, Haitian sellers have not been able to operate because Avon has not been able to ship orders through the US as usual, according to media relations officer Jennifer Vargas. Directly afterwards, Vargas says Avon used its undamaged office in the Dominican Republic to make sure its Haitian representatives were safe. Fortunately everyone was accounted for, though business has still not resumed. “We know they’re all safe, and we know they’re getting ready to start up their businesses again,” says Vargas. “We’ll be here to support them when they’re ready.” Vargas says Avon expects shipments to resume within a few months.
But US cosmetics giant Procter & Gamble has already resumed shipping. “We did temporarily halt shipments to Haiti after the January earthquake because operations were down due to possible damage resulting from the earthquake. However operations were re-established in February and shipments to Haiti have resumed,” says spokesperson Rotha Penn.
These formal suppliers have always worked alongside an informal grey market trade, with Haitians with means to travel to the US and Europe often purchasing perfume, make-up and other beauty products overseas where the prices are considerably lower than in the small number of Haitian shops carrying these lines.
“This market has been informal for as long as I can remember,” comments Georges Boursiquot, a New York entrepreneur who designs and sells jewellery to some boutiques in Haiti. “The agents of the big box distributors from Miami, Boston and the New York area now consist of loose entrepreneurial networks who ship containers full of additional merchandise [such as cosmetics] to Haiti.”
Indeed, formal exporters have increasingly ceded the sales of products to the ‘Madam Saras’, Haitian women who travel to Panama and the Dominican Republic to pick up products in these better organised retail markets. These women who are wholesalers in turn sell to street vendors who peddle the goods to Haitian consumers.
Many of the formal personal care product exporters interviewed said that they would most likely abandon the business unless they were to receive some funding from international organisations to help them rebuild warehouses that have been flattened after the earthquake.
“It’s simply not worth it,” says Reginald Celestin, whose family produced the My Dream brand of cosmetics, including perfume and body soaps and lotions. “We have to remember that our profit margin was small in the first place, and now when you factor the additional investment we have to make to restore our production it’s not worth it at all.”
Celestin says he had remained in Haiti to supervise closing down a small factory and head to Miami to explore business opportunities there.
In the absence of these formal buyers and retailers, shipping companies from the US have become de facto dominant players in the cosmetics trade. They are the new import agents for these products.
“Everyone knows someone who sells hair, perm products, hairdressers equipment and hair care products generally in their living room boutique,” says Boursiquot, who has not shipped any product to Haiti since January.
“Everyone knows someone who sells perfume and other toiletries and it’s cheaper to buy from these vendors than from stores like Bichara or Biggio who charge exorbitant prices for the same product” he tells SPC.
What is also fuelling this informal market, particularly in the aftermath of the disaster, is that the vendors provide easy credit. Sales are often conducted among friends and the sellers are paid regularly.
And there is an additional benefit from knowing your distributor personally in Haiti. Many people who can afford to buy the high-end products at stores have often been hesitant for fear of buying counterfeit goods, which is the norm in the trade, according to many people interviewed.
With the entire shopping district in the downtown area of Port-au-Prince being destroyed in the quake, long established stores were decimated and with no distribution points, vendors are likely to “go underground as the bulk of the industry has done for quite some time,” adds Boursiquot.
As for the personal care product companies who have traded with Haiti in the past, the current priority appears to be philanthropy. A spokeswoman for France’s Pierre Fabre, which produces over the counter pharmaceuticals, beauty and skin care products and pharmaceuticals for pharmacies, says the company had made shipments of pharmaceuticals and care products such as soap, shampoo and skin care cream to Haiti since the disaster. The donations had been made through the CARE International aid charity, said the official. There had also been cash donations.
Christian Dior says it had not made any official donation but its staff had made and sent on collections informally though the main Haiti charities.
At L’Oréal, which has a high profile working in the third world and sponsors the L’Oréal/UNESCO Women in Science awards, a spokeswoman says every one of the firm’s global branches had made cash donations. L’Oréal also continues to support schemes to make education more widely available in Haiti.
The US cosmetics sector has also risen to the occasion, with many companies donating money or selling products to raise financial aid for the devastated country. Mary Kay, that Texas-based American icon of female cosmetics products, donated US$100,000 to the American Red Cross in January. Avon, another US giant, committed US$1m to Haiti relief as well. And Ralph Lauren, producer of fine fragrances to go with its fashion apparel, has created a line of Haiti relief shirts, which are being sold for anywhere between US$25 and US$110 on its website and in stores. According to the website, 100% of proceeds go towards Haiti relief.