The beauty industry in the Middle East and Africa was estimated to be around $20.4 billion in 2011. Of this figure, South Africa alone accounted for $3.9 billion, with Nigeria coming in second, and the Kenyan market, with a total of over $260 million, it was ranked third on the African continent.
Uganda in recent years has seen considerable growth in the cosmetics industry with pioneers such as Mukwano Group, Mwana Mugimu, baby sleeping, movement and the timeless Samona Jelly progressing and opening the market space for other players.
The older reader might also remember Mekako, Jaribou Y Sabuni Kanga among the soaps.
The cosmetics and beauty industry is very lucrative, but success depends on focusing on target markets and categorizing a particular product for sale.
What is required to enter this sector
There are two options to enter this business in Uganda:
- Option 1: Sell local and international brands (Acting as a broker and agent)
- Option 2: Create your own brand and product (the main emphasis of this article)
Being a highly competitive sector in the retail industry, you need to have a very concise business strategy, especially as you will also be competing with big name brands in-house (such as the real, Mac Y Clinical) that can be freely imported into the country.
There are two options to enter this business,
- Option 1: Sell local and international brands (Acting as a broker and agent)
- Option 2: Create your own brand and product (the main emphasis of this article)
A strategic plan that addresses specific needs and a niche audience is the breakout or buildup of any product in this industry, anywhere in the world and in Uganda in particular.
There should also be a strong emphasis on brand building, distribution channel development and product quality, as competition from well-established brands is high, as noted above.
Being a locally made product, there are bound to be a number of challenges and consumer behavior perceptions that you will need to address first before harvesting big.
However, one of the guarantees is that once a niche has been created and a base of loyalty has been formed, it is guaranteed that sales from customers will be continuous, since cosmetic products belong to a specific category of goods that they create a “lifetime bond” between the user and the product.
Once this is understood and put into practice, such as acquiring a catchy name, using exquisite packaging and advertising, marketing strategies, this should be enough to give you and the company a detailed understanding of how the company operates. industry and bottlenecks.
critical considerations
1. Basic education. A formal education in cosmetology and beautification will give you (or the staff you employ for that purpose) the necessary knowledge about various skin types and how they relate to the different products you will be making.
The last thing you would need is to create monsters with your products, that is, destroy people’s skin and beauty. There are local educational institutions that offer relevant courses, but it is recommended to take an international course to give credibility to your product. Unfortunately, many of the courses in Uganda do not keep pace with international developments, which is critical in this cutthroat industry.
However, one institution worth noting is the Uganda Industrial Research Institute (UIRI), which has a fully equipped laboratory and offers free training for entrepreneurs just starting out.
2. Raw materials. It is essential to establish partnerships with raw material suppliers in advance. However, a key advantage of Uganda is that products such as aloe vera, avocado, eggs and shea butter, which are used in many beauty regimens, are readily and cheaply available in Uganda. So there is a real opportunity to set up a contract manufacturing facility here.
3. Quality guarantee. Rigorous product testing to meet potential international standards is crucial. Such tests should be publicized regularly, as this assurance is essential for a product that will come into contact with human skin and is manufactured in Uganda, where the reputation of quality control by regulators is not perceived as strict. Therefore, it is suggested to voluntarily subscribe to an internationally recognized program such as ISO requirements.
4. Cash-cushion. Due to the high need for marketing combined with working capital needs, having a cushion of cash is critical in this industry.
5. Return on investment. Based on my estimates, a return of 1.11 years can be achieved from a registered capital of Shs.39m.
