The cosmetics and personal care market in East Africa has grown substantially over the past five years with Kenya, the region's largest economy, experiencing an estimated 5% growth every year according to Euromonitor International.

The market analyst says the color cosmetics market alone was worth $59.8 million by 2013 and growing. A number of companies dealing in international brands have entered the market making it more competitive. Some of the market players in the region include Estée Lauder, Oriflame, SuzieBeauty, MAC Cosmetics, House of Tara, Revlon and L’Oréal, among others.

East Africa’s increasing population, now estimated at 144 million people, a growing middle class, increasing urbanisation, estimated at 19.26%, and growth of the region’s economies at an average pace of 6.4%, are fuelling the demand for the beauty products market in the region.

According to consultancy firm KPMG “an added driver for this sector is that many Africans appear willing to spend a proportionately large share of their incomes on beauty products. “This is at least partially driven by the entry of popular international brand names, the sharp uptake of mobile telephony, and increased internet access, which have resulted in Africans being more exposed to Western culture.”

KPMG says the beauty market is also being fuelled by the “improved levels of education, the youthfulness of the population, and the rise of female independence.” The report says, “More women are now in the labor force and fertility rates are declining, which means that more money is available for spending on personal care products.”

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Managing director of Estee Lauder Companies for sub-Saharan Africa, Sue Fox previously said “Kenya is a very exciting, vibrant, energetic growing environment.”

But the vibrancy of the Kenyan market is now being tainted by a similarly energetic growth of the counterfeit beauty and personal care black market.

The Kenya Association of Manufacturers (KAM) says the problem of counterfeit products in the market has persisted with authorities having “done little to rid society of the problem out of lack of capacity to do so,” according to outgoing CEO Betty Maina in a previous interview. “While admitting our past failure to tame this unfair and illegal malpractice that has caused genuine producers, the government and consumers such huge losses, it is time we make commitments to deal the menace a last blow.”

The counterfeited products come with great looking packaging but the pricing sometimes is too cheap hence the popularity among the not-so-keen consumers.

The Kenya Bureau of Standards, which regulates quality of products and services and the Anti-Counterfeit Agency that fights to eradicate market for fake goods, say the packaging of counterfeit products looks convincing and sometimes comes with positive feedback from consumers not aware they are using fake goods.

However, the two agencies warn most of the fake products contain a cocktail of potentially harmful ingredients including but not limited to mercury, lead, arsenic, cadmium and copper.

The counterfeiting has impacted almost the entire supply chain in East Africa and the modus operandi of the counterfeiters is similar for all the sectors, particularly in their packaging strategy.

For example, during a recent interview, Croplife Kenya CEO Richard Sikuku supported KAM’s contention that counterfeiters have upped their game, especially in labelling of the fake products. “The labelling is so good that it is difficult even for some experts to differentiate at face value which label is counterfeit and which one is genuine,” he said.

Sikuku said the Agrochemicals Association of Kenya has in the past lost a case on a counterfeit product when an expert from a leading agrochemical manufacturer in Nairobi, who was called to court to identify a genuine label from a fake one, singled out the counterfeit one as genuine. “Counterfeiters are always ahead of everybody. And because counterfeiting is such a lucrative and hi-tech business, it is even conducted over the internet; and the culprits have always out-manoeuvred genuine manufacturers and government regulators,” said Maina.

Kenya’s Anti-Counterfeit Agency (ACA) executive director Dr John Akoteng says many of the counterfeits come from illegal operations such as printing of fake product labels, direct import, transit goods and adulteration of products.euromonito
He said ACA has concluded court cases on counterfeit goods worth $5.1 million, which are being held at the agency stores in Nairobi and Mombasa. The agency recently destroyed public goods worth $3.1 million with Dr Akoteng saying the move was to “warn the counterfeiters and express the government’s commitment in the protection of Intellectual Property Rights through enforcement of the Anti-Counterfeit Act, 2008.”

Some manufacturers and distributors of genuine beauty products have also taken various measures to deal with the monster that is counterfeits in the East African market such as applying a unique security label with scratch-off panel to each product to reveal a unique code, usually a 16-digit number. A consumer can, if in doubt, send the code through a short text message on a mobile phone application to a given number and will receive instant confirmation. A consumer can also call a given call centre contact for confirmation.

The security features apply to almost all forms of beauty and personal care products packaging such as bottles, tubes, jars & containers, sticks, pumps &dispensers, pen types, roller balls, caps &closures. The feature can also be applied on aseptic packaging such as cartons, bags and pouches, which are said to “safeguard the product from monorganisms and enhance its shelf life.”

KAM is also pegging hopes of eradication of fake products from the market on the full compliance with Anti-Counterfeit Act, 2008 to safeguard genuine manufacturers and distributors. “The passing of the Anti-counterfeit Bill provides a lasting solution to the counterfeit problem, particularly in ensuring adequate punitive measures to discourage dealers in counterfeit products from operating locally,” said Maina.

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Despite the challenge of counterfeits in the market, a recent analysis by Euromonitor International says the prospects are good if all other concerns working against the market are addressed. The analyst over the 2014/2015 period, said: “Beauty and personal care is expected to see a steady increase in volume and constant value terms.”

The report says going forward, the beauty and personal care business market growth and sales in the region will mainly be driven by “increased competition among players, wider product variety and advertising building on consumer knowledge.”

Photo: courtesy of L’Oréal