The Nigerian beauty industry is fast becoming a versatile and vibrant sector, for 2 reasons: the Nigerian economy is a youthful one and the increase in the middle-class sector.
According to Euromonitor and Roland Berger Consultant reports, Nigeria’s growing beauty industry was worth about $595.8M as at 2011 and is expected to have risen in 2016 to the tune of $620.2M. Looking through this report I decided to probe further, to understand if that figure was attainable. The beauty industry was categorized into 3 dominant areas as seen in the diagram below.
The skincare industry is definitely an emerging market. According to Afkinsider, 77% of women in Nigeria use skin enhancement products (a.k.a bleaching cream). If this statement is true, skin enhancement products should contribute to Nigeria’s GDP.
Another sector is the Makeup industry, this industry has created jobs. Seriously Thank GOD for this industry. I am very sure this industry has helped reduce Nigeria’s unemployment rate. According to Euromonitor, makeup industry in 2014 generated about $34billion and it is estimated to grow. Areas of growth include makeup training classes, makeup fairs, makeup consultation.
The Hair Industry is not left out; while I was growing up the most common hairdo was braids. Most women do braids at least once a year (especially when traveling out of the country). According to Euromonitor, the hair industry is estimated to be $1.1billion (although I sincerely believe it is worth more than that). The demand in the hair industry is very alarming especially at the final value chain (the saloons).
In spite of the above, however, the beauty industry still has a long list of untapped opportunities.
Challenges in the beauty Industry
- There is no clear data on how this industry impacts on the economy.
- The demand is much more than supply.
- There is hardly a regulatory body for this industry.
- The is a lack of ability to manage products, customers and much more
- There’s a lot of untapped areas which can generate more income.
Opportunities of e-commerce in Beauty sector
The Skincare Industry (The Birch box way).
The skincare industry is growing fast, however, there are a few challenges on the customers for instance: ‘what product should I use?’, ‘Is it good for my skin?’, ‘Will it change my skin color?’, ‘Will I get adverse reactions to the product?’ ‘it will cost me so much to buy each of the products separately’. Many customers want to buy various skincare products, but they are skeptical about them spending a lot of money on a 500ml cream only to be disappointed with the product. A clear way to solve the above problems is the Birch box way. Birch box is a beauty e-commerce platform which uses the subscription based model to allow their customers sample different new products at an affordable price. The birch box way is a win-win game for both the customers and the manufacturers as it gives the following benefits:
• It allows the consumers to try different products and determines which one is suitable for them.
• The manufacturer, on the other hand, will save cost in production as they will have a clear data on which products consumers want/use and invest more time in making the product better and more affordable/available.
• It allows manufacturers to test new product ideas with potential customers before officially launching. It is also a cost effective way to market new products.
• A huge benefit to entrepreneurs/startups is that it is a low-cost barrier to enter the market. this helps to quickly identify your their target market.
The Saloon and Spa sector use of e-commerce
The saloon business is definitely a vibrant business but I hate going to the salon and many of you do because you waste so much time. A few years ago I went to a salon to make my hair (then the rave for short hair was in existence). On getting there, I waited for a while but in the process of waiting, about 3 of their customers got into a fight because they wanted the same person to cut their hair. The stylist in question had his own customer who had called him earlier to book his services (unknown to the other 2 customers. Remembering that day brings into question one of the major challenges faced in most saloons: ‘they don’t even know how many customers they have in a day’. knowing the number of customers you have ahead of time helps in the planning process, which in turn would give customers a better overall experience’. E-commerce can be a platform to book appointments for your favorite hair professional, get bargains especially for spa treatments, and also earn beauty bloggers a commission.
The benefits of harnessing the use of e-commerce
• It can save a whole lot of time.
• It enables visibility.
• It improves efficiency in the industry.
• It encourages adequate planning with data.
• It could create more jobs.
• It gives the customers opportunity to be flexible with their choices.
• It increases more revenue for the salon.
• It enables the businesses to know their profits and also helps reduce overheads.
Although NaijaNaturals, a Nigerian startup is offering an appointment booking service for saloons, they need to work more and utilize the space.
In conclusion, the beauty industry is definitely an industry to pitch into and carve a niche of particular interest. Although there are e-commerce players in the beauty industry more can still harness the potentials it brings.
Start and Stay Insightful. To get regular notifications of our new posts, please click the ‘follow button‘ on the top right corner of this page. Thanks
Wanna go into the beauty industry and need to talk to a professional? Contact us