Demand for cosmetics in Tanzania
With rising levels of disposable income, Tanzania’s middle class is shifting from buying only essential products such as food and beverages, to more luxury products like cosmetics and beauty products. Tanzania’s economy is performing steadily, with anticipated real GDP growth of 7% over 2015-2020, exceeding the sub-Saharan average by a percentage point. Developments in various industries across the country will drive income growth, and are in turn expected to fuel personal consumption to a CAGR of 11% over 2015-2020.
The cosmetics and beauty sector in Tanzania relies almost completely on overseas imports as well as cross border trade from Kenya. A majority of these imports are counterfeit products from China.
Almost 70% of all cosmetics and beauty goods sold by street vendors and small beauty stores are low-quality imitations, but are popular among a large number of consumers due to their affordable prices.
In 2014 the two largest categories in the beauty and personal care industry were hair care products and colour cosmetics. Oral care, men’s grooming, fragrances, depilatories and baby and child-specific products were moderately consumed, with each seeing a CAGR of 14%.
As disposable income levels are increasing consumers are expanding the variety of the products they consume. With increasing demand the range of products offered is also rising. New beauty brands such as Bannister’s Body Cream and Tressa Professional were launched by local company Chemi and Cotex in 2013 and 2014 respectively. The direct sales company Oriflame also operates in the country, but production was moderately popular among locals.
The beauty and personal care environment is expected to see an 8% CAGR over 2013-2018, mainly stimulated by consumers’ rising disposable income. It is also expected that continuous promotions by UNICEF and the government will further increase awareness of hygiene in everyday life, stimulating sales of beauty and personal care products in coming years.
In Tanzania, genuine beauty and personal care products are available only through high-end beauty stores,prestigious supermarkets and pharmacies. Online shopping is however, catching up fast. The other major source of obtaining genuine quality cosmetics and beauty products is through foreign trips to Europe or popular tourist destinations like Dubai.
Hair care, deodorants and bath and shower goods are quite popular in the country due to growing awareness of hygiene.
Although the complicated business environment remains the main drawback of Tanzania, it has one of the fastest growing populations in sub-Saharan Africa, recording a CAGR of 3% over 2009-2013 – which makes it an attractive proposition for sellers of cosmetics and beauty products.
Over 52.2 million people live in the country, with the majority being below 20 years. The large number of habitants is concentrated in the capital city Dar es Salaam, while around three-quarters of Tanzanians still live in rural zones. The urban population in Tanzania is anticipated to reach a CAGR of 5%, exceeding the sub-Saharan rate of 4%. By 2020 urban habitants will account for 31% of the total population – thereby making it an attractive market in the region for cosmetics and beauty products.
The development of modern retail centres, especially shopping malls, is most rapid in urban areas like Dar es Salaam. Modern shopping centres specialise in sales of specific products and services including cosmetics and beauty products, as necessities, especially food, are still mainly purchased through open markets and corner shops. Due to still high rural concentration, unofficial trade in open markets remains significant in the country and also includes sale of low-priced counterfeit cosmetics and beauty products.
In a significant incident to fight counterfeit cosmetics, the Tanzania Revenue Authority (TRA) destroyed 750 cartons of cosmetics worth over $55,000 that were believed to have contained harmful chemicals in Tanzania’s Rukwa region. The destroyed cartons included Carolight Lotion, Top Lemon, Princess Cream, Princess Claire, Top Claire Plus Lotion, Diproson Cream, Betasol, Mont Claire Cream, Dernotly cream. Othersincluded 12 cartons of Diproson Cream, Betasol (12) Mont Claire Cream (3) and a carton of Dernotly cream believed to contain harmful steroids.
According to the Tanzania Revenue Authority, the cosmetics, some of which contained mercury, have been entering the country since 2010 from the neighbouring Democratic Republic of Congo (DRC), where they are not banned.
The incident shows that there is still a long way to go to win the war against banned cosmetics. Efforts to curb importation and sale of such products are paralyzed by availability of a receptive market for such products, simply because they are inexpensive and have a long shelf-life. Demand for such cheap products is commonly exploited by manufacturers, importers and retail sellers by selling counterfeit cosmetics.
According to local news sources life-threatening perfumes and facial creams containing male hormones are widely available in Tanzania. These counterfeit products are being smuggled into the country by unscrupulous businessmen and include hormone rich creams that create unwanted facial hair, lead to the development of allergies and can even cause cancer.
Consumers complain that Tanzania Food and Drugs Authority (TDFA) is not conducting thorough inspections of retail outlets as a result of which such counterfeit cosmetics are being massively circulated throughout the country.
It is noteworthy that Tanzania and South Africa are the only African countries to have any regulatory framework covering the cosmetics industry.