Cosmetics are always in high demand as people like to look, smell and feel good about themselves. As FORTUNE STAFF WRITER, SNETSEHAY ASSEFA visits the cosmetic shops in Piassa, both their owners and customers share details about the dynamism of formal and informal trade in the products of the beauty business.
Abera Cosmetics Shop was established in 1995 with a 7,000 Br investment, says Berhanu Tilahun, who runs the family business. Currently, setting up a similar cosmetics business could take up to half a million, he adds.
Back in the mid 1990’s, Abera Cosmetics used to sell to its diverse customer base, mostly petroleum jelly, which most Ethiopians know by the brand name Vaseline, and hair oil products. At present, most cosmetics shops carry products starting from lip-gloss with popular brands such as Nivea, Victoria’s Secret, and Elizabeth Arden, to artificial and human hair.
The customer base is also expanding as the lifestyle of the society is changing and the population is growing, said Heran Tesfaye, marketing manager of Cosmo Trading Plc.
Cosmo which is a sole distributer of cosmetic products such as Sofn’free, Clere and Top Society, was established in 1998.
Two sisters, Betelhem and Netsanet Kebede, with their friends Mariamawit Dessalegn, are the customers Fortune met with when they were visiting one of the cosmetics shops in Piassa. They said that shampoos, conditioners, body spray and lip-gloss are items that can always be found in their cosmetics kit. The young women spent at least 15Br for lip-gloss and up to 70Birr for body spray.
The highest selling items include shampoo and conditioner, for prices ranging from around 20 Br to 250 Br; body sprays, 20 Br to 200 Br and body lotion, 12 Br to 320 Br, depending on the size and brand. The cheapest items, starting from 15 Br, are nail polish and artificial-hair, while perfume and human-hair have prices ranging between 2,000 Br and 5,000 Br, respectively.
Another pioneer of cosmetic products distribution, Alfarag Trading Plc, was established in 1932. Starting from the time of its opening, the company commonly distributes cosmetic products such as Dove, Vaseline, President and Chanel as they deal directly with the suppliers. These products usually do not make it to the shelves of small shops in the neighbourhoods because of their affordability, said Alfarag’s marketing manager.
Throughout the years, the demand has been expanding and their sale is also showing an average of seven percent sales growth annually, said the marketing manager.
Though Heran did not want to disclose by how much, she said that their sales were also growing and there had not been a time when they kept products in stock for lack of demand. The distributors use three main channels: Merkato, from which they tap the wholesalers’ market; they make an errand run to cosmetics shops to sell their products and there is bulk sale to supermarkets, said Heran.
Usually the transaction is done with cash but for few loyal customers they provide credit, she added.
Currently there are 207 companies that are engaged in the import and wholesale business of cosmetics and sanitary items.
Various brands of different products are introduced to the local market based on what distributors see trending in the international market, through cable TV advertisements and the Internet, says Samuel Nigussie, supervisor of Alem Business Centre.
Alem Business Centre owns four cosmetics shops by the name of Sally that are located at Arat Kilo, Piassa, Merkato and Sar Bet. The company is also the sole distributor of cosmetics products such as Olive products, L’Oreal and Dark & Lovely.
It is not only credible suppliers that sell door-to-door but also individuals who make trips in and out of Ethiopia, who bring and sell their collection of brands and products. People who lived abroad or use imported cosmetics products, will come and ask for that specific brand when they run out, thus sharing information about new brands.
But there are a few products introduced from local manufactures, said Heran. There is not a single locally produced cosmetics product that made it either to Cosmo or Alfarag Trading.
One of the prominent local companies that has made its name in cosmetics production at present, is Zenith Gebes-Eshet Ethiopia Ltd, which is a subsidiary company of Alem Business Centre.
Zenit Gebes Eshet, established in 1989 manufactures various hair oils and crèmes by the brand name Zenit.
Even though there are few locally produced cosmetics on the market especially beauty soaps such as Star and Dana, they seem invisible mostly because of lack of promotion and distribution, according to Alfarag’s marketing manager.
And since the market is expanding, it has rooms that can be filled with new products, obtained either locally or internationally. They just need further promotional and distribution skills accompanied by price competitiveness, he added.
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