Estée Lauder is looking to expand its presence in Africa as the continent's demand continues to increase
Estée Lauder is looking to increase its presence in sub-Saharan Africa by launching global cosmetic brands Clinique and MAC in order to capitalise on the strong demand found for luxury cosmetics among the region's middle class.
The high-end cosmetics company’s Managing Director, Sue Fox, stated that its second biggest brand, Clinique, with sales over $1bn, will be rolled out in Nigeria later in 2013 and in Mozambique in the near future.
February 2013 saw Lauder launch MAC makeup in Nigeria's largest city, Lagos, after being "inundated" with requests, Fox told Reuters. "There's massive interest from the consumers there in international brands," she said. "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."
The company has highlighted another new market for MAC, its third biggest brand, this year and another two or three in 2014, adding to new partner stores in Botswana and Zambia.
The global personal care company are also about to enter the market in Cote d'Ivoire for the first time through the fragrance sector, which is currently its biggest category in Africa. Estée Lauder has license agreements with fragrance brands including Tom Ford, Michael Kors Holdings Ltd and Coach Inc.
The company eyes sub-Saharan Africa with promise, citing its future progress within the continent as "a long-term build" according to Fox, as its youthful population, steady financial growth and socio-economic urbanisation provides a good basis for expansion. "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," Fox said. "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."
A potential stumbling block to the company's growth in the region is the lack of retail infrastructure outwith South Africa. "We would probably be going a lot faster if there was the availability of retail space," the Managing Director 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."
Estée Lauder is focusing on cities with the biggest growth potential, said Fox, and has identified key locations such as Lagos, Abuja and Port Harcourt in Nigeria, as well as the capitals of Ghana, Kenya, Tanzania, Mozambique and Angola.