Sunday, 25 September 2022


Digital Cosmetology: Insightfully Growing a Cosmetics brand in the Digital Age in South Africa

The South African cosmetics market is the largest in Africa, and to competitively grow a brand in the Digital Age, there is need to fully understand the market size, potential, and then how to use all things digital to shape the brand, corporate image, sales channels, and drive sales.

According to Invest SA, South Africa is Africa’s largest market for cosmetics and personal care products. In 2018 alone, the sector recorded close to US$3.2bn in revenue. Within this, the cosmetics market makes up 17% of the grouped cosmetics and personal care industry in South Africa.

In South Africa, the household spending on personal care products is expected to grow by 25% over the next five years. The manufacturing of cosmetics contributes about 1% to South Africa’s manufacturing output in 2018. The South African cosmetics and personal care products market is projected to register a CAGR of 6.62% during the forecast period (2022-2027).

Hair care is the largest sub-category within the cosmetics and personal care sector. Large multinational companies dominate the personal care market in the country, accounting for 90% of sales.

South Africa’s cosmetics and personal care industry has a strong focus on R&D, with recent innovations including reducing the environmental footprint of packaging and introducing natural organic products and eco-friendly/biodegradable packaging. Existing opportunities in the industry make South Africa an attractive investment hub.

Glocalisation: Global and Local Trends
Glocalisation is global at a local level and the other way round. All cosmetic brands and businesses are global and local at the same time, and as technology advances, moving from Web 2.0 to Web 3.0, this realisation is fast being imprinted in consumers' minds, reshaping behaviour. That affects cosmetic brands and products as well.

Consumer concerns about sustainability and the use of harmful ingredients has led to a growing market for cosmetics formulated with natural ingredients. The number of cosmetics start-ups has increased, often because of black consumer complaints about the lack of products for their skin and hair requirements, leading to the development of unique brands.

Men are becoming more fashion-conscious, and male-focused grooming products and beauty parlours are increasing. Online sales of products, including cosmetics, have grown significantly since the start of the lockdown.

Digitalisation, wellness, personalisation, and sustainability are some of the important beauty and grooming trends, popularised by independent beauty brands and followed by established companies.

These trends have also resulted in mergers and acquisitions as major companies wanted to benefit from the success of independent brands. Throughout the lockdowns people have stuck to their normal skin care routine, but sales of make-up have declined due to fewer trips outside the home, and the wearing of masks.

Markets: Dynamics and Growth and Digital
A South African cosmetics brand and business needs to use social media to focus on growing the reputation of the brand (Corporate Image), generating sales leads (Lead Generation), managing the retail networks (Channels & Merchandising), and overall growing a followership (brand loyalists and advocates).

Demand for organic natural products South Africans have become more inclined to consuming organic skin and hair products, with close to one-quarter claiming that natural, organic, or environmentally friendly considerations influence their purchasing decision, Invest SA reported.

Strong R&D capabilities South Africa has strong research and development (R&D) capabilities in the cosmetics industry. Companies have invested in R&D capabilities related to African hair and skin care products. Local expertise present opportunities for manufacturers to supply the global multi-billion-dollar African hair and skin care market.

Well-established retail network South Africa has the most established retail network in Africa. The dominant retailers in the sector operate more than 1 000 drugstores and pharmacies. This provides ready access to consumers and simplifies distribution across the country.

Access to natural ingredients South Africa is rich in natural plants required to produce organic skin/hair products. Locally produced ingredients include Aloe ferox, buchu, marula, baobab, honey bush, rooibos etc. Given the current high dependency on imported raw materials, indigenous ingredients present an opportunity to reduce this import dependency.

Consumers: Profiling, Purchasing Power, and Digital
A cosmetics brand is an emotional and very personal beauty brand, and its products' marketing must be as such, emotional, and very personal.

In shaping your cosmetics brand, there is need to know the general centres of consumer purchasing power. Urbanised Johannesburg, Pretoria, Cape Town, and Durban have high purchasing power and population concentration, making them attractive markets
for cosmetics. When using digital marketing, there will be need to profile your target audiences, especially with these centres of purchasing power. From these, you can plan your retail networks, and advertising spend as well.

Growing urbanization, a growing middle-class population, a wide range of brands in the beauty and personal care category, organized distribution channels emerging, and the introduction of private-label products are some of the reasons driving the African beauty and personal care industry.

There is a growing focus on improving living standards among South African consumers, driven by a surge in internet access. The number of the country's internet users more than doubled during the review period. Social media is gaining more traction, with consumers’ inclination toward global fashion and beauty trends.

Merchandising: Enter Digital Brand Ambassadors
The popularity of beauty and personal care products that manage several concerns in a short amount of time is also growing. Vendors focus on developing novel items to fulfil changing client needs. They also put a lot of effort into expanding their present product lines by releasing new beauty and personal care items that are customized to the needs of their customers. Customers' disposable income rises, increasing their purchasing power for beauty and personal care items and driving the market growth.

The brand and business built in such an environment must understand and know how to tell a story using TikTok, Facebook, Instagram, and YouTube, the to-go-to social media platforms to recruit followers and brand loyalists for beauty brands, engaging them using all content marketing tools available. Content must be fluid, personal, intimate, just as that which is driven by the industry as a whole - beauty.

Whilst merchandising in the physical shop is particularly important, there is need for Digital Merchandising as well for the cosmetic industry, especially through social media that allows online shopping like Instagram.

We live in a time where brand ambassadors do not necessarily have to be physically present to do their job, but they can be appointed and use the cosmetic products via Live streaming, video posts, group calls, etc. All these are tools at the disposal of the business that is willing to dive into digital spaces of the South African internet consumer. A Digital Merchandiser will go a long way to creating tractions, leading into product consumption, if they are redirected to a point-of-purchase.

Business Model: Possible Scenario for Growing Digitally
In general, South Africa offers a forward integrated value chain, including distribution, packaging, and supplying finished products to retailers. South Africa provides a favourable enabling environment for the cosmetics and personal care industry. This makes it possible for even a make-up artist to start a beauty spa, whatsoever size, in any location, grow it using social media, with intensive personal communication of the brand, and allow the reputation to grow working capital, which can be invested in developing own products.

These products will be used in the store at first, then sold online on Instagram, to build a base for loyalists, of whom a few will be selected to become ambassadors and agents of the cosmetics produced and used by the brand. As the fame of the brand grows, tapping into retail networks will be the next move, depending on where the product is most consumed and makes economic sense. The product will be placed and advertised through the agents and ambassadors using social media, and formally followed up as is normal merchandising procedures.

The rest is history.

The conversation on the potential of a digital first cosmetics brand can take years to detail, but the main issue is, there is space for the brand and business that leverages on the use of Digital Marketing to intelligently grow a brand, reputation, and increase sales volumes. It just takes willingness to enter boldly, a space in which fortune will favour the bold.

Important things on the Digital Marketing to-do list for cosmetics brand include Digital Marketing Strategy, Web Designing, SEO & SEM, Photography, Content Creation & Marketing, Email Marketing, Lead Generation, SMS Marketing, Google Ads, Google Analytics, Google Listings, and Social Media Management.

Sources: GlobalWire, PR Newswire, Invest SA, Mordor