L’Oréal Plans to Open Branch in Kampala
L’Oréal plans to set up a branch in Kampala early next year and create outlets upcountry for its products in Jinja, Tororo, Gulu, Kasese, Lira, Mbale and Masaka. In the past couple of years, the beauty and cosmetic giant has been expanding its presence in the country in a bid to further expand its customer base in East African market.
However, penetrating the Ugandan market has its own challenges. The landlocked country has traditionally been through Kenya – renowned as the trade and distribution hub of East Africa.
“Uganda, being a landlocked country, presents a challenge and a blessing in equal measure for us,” Philippe D’Have L’Oréal’s Manager East Africa. “We have to operate through Kenya to send in our products, which incur shipping costs and other logistical expenses. One key target we want to meet before the year ends is to ensure L’Oréal’s products are in every beauty store in Kampala.” Philippe added.=
“We aim to add one billion new customers by 2020,” Philippe said. “Therefore, for us to double our existing user base in East Africa, it’s economically sound to target Uganda, before Rwanda, Burundi and Congo in the future.’
L’Oréal now has more than 600 employees in Kenyan and South African plants. The company ventured into Africa in 2013 and now has three commercial hubs.
Note: L’Oréal has sold almost 150 million units in Sub-Saharan Africa in 2014 alone, a 60% rise on 2013.
Africa’s middle class has tripled in size in the last 30 years and is driving the continent’s demand for cosmetics. In Nigeria cosmetics companies are racing for market share. While multinational brands dominate the market in Kenya and Uganda and lack of capacity for local manufacturing remains an issue, local entrepreneurs are outsourcing manufacture and are using unique sales strategies. Meanwhile, South Africa, the continent’s most mature market, has seen local economic difficulties dampen demand for premium products