WPC 2014 devoted a session looking at some of the lessons and opportunities Africa offers the fragrance industry
It is clear established producers and suppliers view the emerging markets as key opportunities, but this type of growth requires innovation, and where new territories are concerned innovation takes the form of adaptation. Culture, climate and economies all dictate the type of product opportunities that exist.
Population and disposable income are the factors that determine the size of the opportunity. Africa has a billion potential consumers but relatively low disposable incomes. Economic inequality is even more pronounced than in developed regions, making the growing middle classes an attractive and increasingly engaged market. Conversely, the extremely low disposable incomes in the mass market means price is often the sole factor on purchasing decisions.
High temperature and humidity mean both in personal and household care that fragrance longevity is both desirable and a significant challenge.The cooling effect of menthol is a popular ingredient for African tastes and needs. Estee Lauder is specifically formulating for climate and other international brands will follow. Adapting classic products to local needs will be key to acceptance.
Stores for high disposable income
Distribution channels can also be crucial to success. Department stores with their own buying mechanisms are dominant in the more developed middle class urban environments. Following Lauder’s local mantra, M.A.C has opened its own store in Lagos, a brave move for a high end product range in such a young market.
However, low income mass markets are served by small chains and independents where price is the dominant driver. Engagement with existing wholesale distribution channels is one of the few methods of getting product into these markets.The products also need to be accepted by the customers. Body creams are still an alien concept for many and bathroom product ranges are restricted with bar soaps dominating the bath and shower market.