Nakumatt gets franchise deal with Revlon as it launches cosmetics unit

Nakumatt Holdings has launched a cosmetic division, with the acquisition of an exclusive franchise deal with New York-listed Revlon cosmetics.

The franchise deal comes as part of Nakumatt’s strategy to move from being a supermarket to a departmental store.

The regional retailer has invested Sh87 million ($1 million) to market Revlon products as it moves to bring in a wide range of other products to be part of its new cosmetic division.

“This is a step towards us being a department store. We start with Revlon but going ahead you will see more brands,” said Nakumatt’s group lifestyle category manager, Sonali Shah.

Ms Shah is a Kenyan who has been working in the beauty industry in London and was recently hired by the supermarket chain to help develop its new division.

Ms Shah said Kenyans are willing to spend and if they do not get their cosmetics locally they will go abroad thus the reason to bring some of these products to “the one stop shop.”

The launch of Revlon comes in the heels of other international cosmetic companies including L’Oreal and Estée Lauder launching in the Kenya in a bid to capture the growing middle-class.

Nakumatt unveiled the Revlon counters in its Westgate and Junction outlets and plans to roll out to other branches, including out of Kenya, in the future.

The partnership with the regional retailer gives Revlon the biggest footprint in Africa outside of South Africa and makes this the only supermarket chain they have agreed to carry their products.

Revlon has in Africa, Australia and Canada mainly maintained its sale delivery through exclusive departmental and beauty stores to ensure standards.

In December 2011, Paris listed L’Oreal opened a subsidiary in Kenya targeting the East Africa region as part of growing its market share in emerging countries.

In May last year, Estée Lauder, one of the world’s leading cosmetics manufacturers, officially launched its products in Kenya through a franchise agreement with Lintons Beauty World.

"Business is moving fast in Africa, there is a big opportunity in this market,” Sue Fox, managing director Estée Lauder Companies, South Africa, said during the launch.

Suzie Wokabi, the entrepreneur behind the local cosmetic brand Suzie Beauty, estimated the local beauty market to be worth about $185 million (Sh16 billion).

In 2007 she launched a full colour cosmetic line that has made headway in the market and is stocked in some of the leading shops and pharmacies.

A beauty and personal care report on Kenya by Euromonitor International indicates that international companies Unilever Kenya Ltd, Beiersdorf East Africa Ltd and PZ Cussons East Africa Ltd are the market leaders due to their network distribution and the product brands.

The companies have been strengthening their distributorship and re-launching some of their flagship brands with new packaging and updated colours to increase visibility.

However, high inflation has seen the demand for some of the popular brands affected, with a significant number of consumers switching to mass brands, with premium brands losing share.

“Most consumers from middle- and lower-income groups purchase their products from outdoor markets and supermarkets, while higher-income earners buy from health and beauty retailers. This is because they both stock a wide range of mass brands, which are affordable to a broad majority, whereas health and beauty retailers tend to stock a variety of premium brands,” said the report, which was launched in December 2012.