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Beyond BRIC: Opportunities for Premium Beauty and Personal Care
By: The Smart Cube
Posted: February 8, 2012, from the March 2012 issue of GCI Magazine.
page 3 of 4
Although South Africa has a thriving luxury and beauty market, the average consumer elsewhere in the region, such as in Gabon and Botswana, has not adopted premium beauty products. South Africa has a large consumer base (50 million) and a mixed vibrant economy, resulting in a premium cosmetic market valued over $300 million in 2009. Yet the dominance of local manufacturers in luxury products has inhibited foreign players. Global beauty companies looking to grow business in South Africa may need to invest heavily to research the preferences of the local consumer.
Other potential markets, such as Kenya and Nigeria, have limited potential due to inadequate economic diversification while still others, including Namibia, Angola, Congo and Swaziland, face severe challenges including internal strife, corruption, unemployment and severe public health issues.
With Government Support, Prospects Improving in Latin America
Panama, Uruguay and Argentina have been the best performers in terms of an increase in GDP per capita in Latin America. Beauty companies have well penetrated the high- and medium-income economies of Latin America such as Argentina, Brazil, Uruguay, Dominican Republic, Venezuela, Chile, Columbia and Mexico. However, there is tremendous growth potential in economies such as Peru, Paraguay, El Salvador and Costa Rica.
Peru and Paraguay have displayed sustained economic growth driven by a market-oriented economy. The government has also pushed economic diversification efforts to move the economy away from agriculture; this is likely to bring sustained growth in future. Small central economies have also exhibited sustained economic growth, such as El Salvador, Panama and Costa Rica. Consumers in these developing markets are likely to migrate to premium beauty products soon.
The Middle East: Wait and See?
According to market reports, countries with high growth potential for beauty products in the Middle East are Egypt (market size of $819 million in 2010), Iran (estimated market size of $2.1 billion in 2009), Libya, Tunisia, Oman and Morocco. Others, such as Jordan, Lebanon, Saudi Arabia, Bahrain, Qatar, Kuwait and the UAE, are already well penetrated by beauty companies; nevertheless, revenue from such markets is expected to grow steadily.