The Women Behind Nigeria’s $1.2 Billion Beauty Market. The Beauty Merchant Plugging Global Brands into Nigeria.
- Who: Alali Hart, CEO and founder of Montaigne AH Ltd, a beauty and wellness retailer, wholesaler and spa with 40 retail doors across the country in malls and outlets in Lagos, Abuja, Port Harcourt, Owerri, Enugu and Warri
- What: Montaigne Place, the firm’s flagship, stocks over 80 global brands including selective distribution for fragrances from Chanel, Armani, YSL, Lancôme, Bulgari, Acqua di Parma, and exclusive distribution for skincare, niche fragrance and cosmetics brands including Clarins, Creed and Yves Rocher
- Where: Lagos, Nigeria
In a city as dazzling and thoroughly hectic as Lagos, it’s fair to say that Montaigne Place appears like an oasis of calm in the urban storm. For wealthy Nigerians, it’s a place to shop for upmarket beauty products, get the latest treatments and be seen — or not be seen, as is the case for some of Alali Hart’s more discreet clients, who have been known to bring an entourage of twenty staff and rent out the entire facility to escape the prying eyes of other high-society matrons.
The founder and CEO of this beauty retailer, wholesaler, and wellness spa have been in business since 1995, after a meeting in Paris with executives from Clarins led to a deal for Hart to represent the brand in the Nigerian market. Selective distribution channels were “pretty much non-existent” at the time, she says, so the only way to make the opportunity work was to build the retail network herself.
Today, Montaigne Place stocks over 80 global brands including marquee fragrances from Chanel, Armani, YSL, Lancôme and Bulgari and niche fragrances from Creed, Roja Parfum and Amouage. It exclusively distributes skincare and cosmetics giants such as Clarins and Yves Rocher. “Our offering also includes brands like Flori Roberts and two standalone Black Up boutiques in Lagos,” Hart says.
American and European beauty brands’ perspectives on the Nigerian market seem to fall into two distinct camps: some are pursuing local leaders like Hart from Montaigne Place or her direct competitor Abiola Kasumu from Essenza because they see the importance of gaining a foothold in this emerging market with huge long-term growth potential, while other brands, as Hart puts it, have “classified Africa and Nigeria as a no-go area despite the potential opportunities.”
“It’s sometimes frustrating when people have chosen to make up their minds even without listening to what you have to say. But gratifyingly, more and more brands are seeking us out,” she says. The luxurious potions, pampering and makeovers that Hart provides at Montaigne Place have since proved popular enough to warrant opening branches in the capital Abuja, Port Harcourt and other cities.
Africa’s largest economy clearly has a lot to offer. The Nigerian beauty and personal care market is currently worth more than $1.256 billion at retail and is forecast to reach more than $1.311 billion next year, according to Euromonitor International. The country’s beauty sector appears to be more resilient to the impact of the pandemic than its fashion sector, though both were hit hard by the Nigerian recession. Fortunately, the economy is now creeping back into growth and many retailers are operating with Covid-19 measures in place.
The premium and luxury segments are especially attractive in a country with more than 43,500 high-net worth individuals (US dollar millionaires), according to Knight Frank’s latest wealth report. Investors should note that the affluent demographic is only growing in this market of extreme wealth and poverty. With the number of millionaires forecast to increase 19 percent between 2020 and 2025, Hart can expect even more VIPs like the businessman client she has “whose love for fragrance is legendary,” compelling him to buy 40 bottles of perfume from her in a single visit.
Nigeria’s soft power in the film and music industries means that some of the celebrity clients buying beauty brands at retailers like Montaigne Place must be influencers with millions of followers across the continent. And as the local fashion industry continues to evolve, Hart says that buzz about Lagos Fashion Week, which kicked off this week,provides a “cascade effect” in the beauty market.
Yet there’s no getting around the fact that the Nigerian market presents international brands with barriers to entry and a host of operational challenges.
“The business environment here is getting tougher and somewhat riskier owing to policy frameworks that are often arbitrary and that hamper ease of doing business,” Hart concedes, adding that the government’s recent exchange rate policy isn’t the only thorn in her side. The real “menace” though, as she calls them, are the parallel market vendors who are regularly targeted by her lawyers after having been instructed by Hart to write stinging cease-and-desist letters to keep them at bay.
While Hart remains bullish about the Nigerian beauty market, she is also casting her eye beyond the border. “It begins to make more sense as a risk diversifying measure to look at other African markets; this is something we’ll be pursuing in the near term.”
But back in Nigeria, she counsels, long-resistant brands would be wise to reconsider their stance on Africa’s powerhouse and those already active in the market had better up their game.
“Recently, we see homegrown Nigerian and African brands giving the big guys a run for their money especially as they’re more agile and adept at jumping on micro trends and capturing the zeitgeist.” Now more than ever, she warns, “the advice ‘think global, play local’ really holds true here.”
The Bottom Line: The Nigerian beauty opportunity is too big to ignore, and the dynamic market underpinning it will move forward with or without global brands hesitant to invest. The operational challenges that the market presents should compel brands to seeks partnerships with local industry leaders who can insulate them from some of its instability and provide strategic counsel.
The Brazilian Retail Dynasty on a Fashion Buying Spree
Magazine Luiza storefront in Minas Gerais, Brazil. Shutterstock.
- Who: At family firm Magazine Luiza, billionaire businesswoman Luiza Trajano serves as chairwoman, while third-generation Frederico Trajano is the company’s current CEO
- What: Magazine Luiza, also known as Magalu, is one of Brazil’s largest multichannel retailers offering products and services including groceries, electronics, home goods and fashion, through its chain of 1300 stores nationwide and e-commerce arm Magazineluiza.com.br
- Where: São Paulo, Brazil
To many in their home country, the Trajano family is to Brazil what Walmart’s founding family the Waltons were to America. Since Luiza Trajano’s aunt and uncle started Magazine Luiza in 1957, it has grown from a small gift shop in Franca to a brick-and-mortar empire with more than 1300 stores across 21 of Brazil’s 26 states. Its sophisticated e-commerce business is complemented by financial services.
Magalu, as the retailer is known colloquially, has grown incredibly fast in recent years and is now squaring up to long-standing rivals B2W, Via Varejo and Latin American e-commerce behemoth Mercado Libre. But Magalu’s impressive digital growth shouldn’t come as a surprise, considering the firm launched its website as early as 2000 and pioneered a network of micro shops prior to that, in the 1990s, where customers could order from a computerised catalogue for home delivery. No wonder some in Brazil’s business community consider the firm’s current chairwoman Luiza Trajano to be a maverick.
It appears that Magalu wants to create a super-app for Brazilian consumers that consolidates all the company’s channels and services while boosting its online advertising reach. Over the past two years, it has gone on an acquisition spree, snapping up several online businesses including last week’s purchase of a notable multimedia platform. The deals for e-commerce site Netshoes (Zattini) and shoppable content platform Steal the Look have helped strengthen Magalu’s position in fashion’s mass market. And since the firm’s 2020 total sales increased by more than 59 percent year-on-year to 43.5 billion reais ($7.8 billion), Magazine Luiza can afford to carry on shopping.
The Bottom Line: Magazine Luiza may be a general merchandiser but it has earmarked fashion as a growth category and brands like Adidas and Calvin Klein are already available on its e-commerce platform. Its colossal size, ambitious digital strategies, impressive distribution network across Brazil and financial performance make it an important player for all fashion and beauty brands to watch.
Russia’s ‘Modest Fashion Capital’ Is a Growing Luxury Market
The Kul-Sharif Mosque is a landmark in Kazan, Russia. Getty Images.
- Who: Lada Sergunina, the Russian fashion designer showing remotely this week during Mercedes-Benz Fashion Week Russia
- What: This season’s Russian fashion week is taking place in Moscow, but designers are showing remotely from five other Russian cities and more than a dozen countries
- Where: Kazan, Tatarstan, Russia
It may be 700 kilometres east of Moscow, but Kazan has good reason to call itself “the third capital of Russia.” Thanks to the vibrant culture and distinct language of Tatarstan, where it is located, the ancient city of Kazan is a tourism hotspot in normal times. With a local branch of luxury department store Tsum and more than a half-dozen shopping malls full of international brands, this city of 1.2 million people has been attracting domestic and foreign investors keen to gain exposure to this urban market that’s also a rapidly evolving hub of finance and industry.
“It’s well developed and quite rich,” says Alexander Shumsky, president of Mercedes-Benz Fashion Week Russia, an observation that explains why he chose Kazan to be one of five Russian cities to host designer shows outside Moscow this season (along with St Petersburg, Nizhny Novgorod, Kazan, Sochi, and Chelyabinsk). Russia’s major fashion week, which is taking place this week, will see Lada Sergunina show in Kazan, where her business is based. “Kazan is a city where traditions and cultures of ‘the big east’ and ‘the big west’ are surprisingly intertwined — and that inspires me a lot,” she explains.
As the capital of Tatarstan, the city has one of the highest Muslim populations in the country. “That makes Kazan a capital of Russian modest fashion,” says Shumsky. “There are a lot of designers in the region who follow principles of modest fashion,” albeit a more liberal interpretation than in some other global markets, he adds. But this boomtown in the Volga federal district also represents a potentially attractive market for the broader fashion and luxury industries.
The Bottom Line: While larger cities like Novosibirsk and Yekaterinburg are already an important part of the Russian retail network for global brands growing their footprint out from core operations in Moscow and St Petersburg, cities like Kazan and Nizhny Novgorod should be part of most expansion plans alongside other urban markets like Samara, Rostov-on-Dom and the resort town of Sochi.