VENTURES AFRICA – Foremost Nigerian beauty brand, House of Tara (HOT) is no longer content with local domination. Consequently, this tripartite business – makeup studio, school and Orekelewa beauty range and foreign product retail – founded by visionary entrepreneur has commenced an ambitious plan to establish 100 makeup stores across sub-Saharan Africa, starting with Nigeria, in the next five years.
The aggressive service and distribution network expansion is driven by growing economic power of the average Nigerian woman and her preference for western looks – a factor fueling massive demand both indigenous and international beauty companies are cashing in on.
In 2012, a Euromonitor report noted that the leading player in the market was US-based multinational Revlon Inc with a value share of 12 person. The global market research analyst attributed the success to Revlon’s “wide range of mid-priced lipsticks and mascara, wide visibility in retail outlets and strong advertising on the internet and social networking sites.”
On the other hand, counterparts such as L’Oreal, the world’s largest beauty product maker, are not sitting still. Seeking local brands that understand the retail of cosmetics and possess scalable infrastructure, they have offered HOT national distribution deals neccesitating its expansion for a stronger and more inclusive presence.
Tara Durotoye, HOT’s founder, chief executive and Nigeria’s pioneer bridal makeup entrepreneur, has built the 15-year business into a household name, which now runs 15 stores with over 4,000 independent sales reps. She reluctantly reveals turnover for the brand’s most profitable business – a product retail unit, including distribution rights to L’Oreal products such as Mabling – spans between a billion to five billion naira (over $30m). A well structured strategy will see the company leverage the robust expansion to skyrocket exposure for its makeup service, school and Orekelewa product line.
“There’s a percentage of the consumer ratio who are attracted to international brands and whom we do not currently service that would flood our stores,” Mrs Durotoye says. “Besides, parties are a part of our culture and women in even remote parts of Niger Delta want to wear African cosmetics too.” So not only would prospective customers be able to walk in for a foreign product like Maybelline, those seeking services could also sit for a Nigerian make over. Polo Park, Ibadan mall, Delta Mall and Abuja’s Cedi Plaza are modern trade channels HOT would be adopting. For traditional trade, the company is looking to open one in Asaba, Enugu, Uyo, Yenogoa, Akure, Ogbomosho, Makurdi etc – a decision informed by the states supplying its largest consumer volume and sales reps. It is structured to compete globally with the world’s best beauty brands – with highly developed operation competences across human resource, communication, retail, strategy and inventory management across the country.
Money Ain’t A Thing
This expansion drive however requires a flood of financial fueling. Though lack of access to credit leads in the downfall or stagnation of small and medium enterprise, Tara’s business which started 16 years ago as a door-to-door bridal service during her law degree pursuit, no longer suffers such.
“Financing is no longer a challenge,” she quips.
Needing N500,000 ($3000) to secure a store earlier in her entrepreneurial career, she lamented several unsuccessful attempts at a bank loan to her mentor, Mrs Ibukun Awosika, founder and Chairman of The Chair Centre Ltd, a market leader in office furnishing.
“Banks couldn’t understand why anyone would pay for a makeover,” a smiling Tara mused.
Unknown to Tara, Mrs Awosika spoke jokingly to a friend and former Guaranty Trust Bank co-founder and chief executive, late Tayo Aderinokun, about his company’s ill treatment to entrepreneurs and a promising one in particular. Before long, a young Tara received a startling call from the GTB CEO, a convincing business plan was presented to the lender and HOT received the much needed credit facility.
“Now the banks have seen our numbers, we’ve built credibility and they’re no longer unwilling to lend.”
Though an expert makeup artist, her success is not made up. Her company, lauded as Nigeria’s premier beauty company, is credited with launching the country’s first Bridal Directory in 1999, creating an international standard make-up studio, establishing the first make-up school in West Africa, Nigeria’s inaugural make-up line Orekelewa, and the first fragrance created by a Nigerian, the exotic fragrance ‘Be Inspired’ which was launched in 2009.
Globenewswire describes HOT as a “proudly African brand that draws creative inspiration from Nigeria’s largely untold rich culture and heritage.” In 2012, HOT, for its extensive knowledge of black beauty and complementing makeup line, was selected as the official makeup artist of the ARISE Magazine Fashion Week.
Last year, 36-year old Tara Durotoye was elected a Young Global Leader (YGL) by the World Economic Forum for her entrepreneurial strides and aggressive drive for economic empowerment of the Nigerian woman. Her House of Tara International Makeup School founded in 2007, has trained over 2,000 female graduates till date; many of whom have proceeded to establish several makeup start ups with successes, creating employments and growing the economy. About 4,000 independent female sales reps across the nation, many of whom are students or self-employed, currently earn a living distributing HOT’s products in their respective regions. Tara explains the brand’s continued focus on the non-staff sales channel creates more opportunities for females to empower themselves economically, though the independent sales team versus HOT’s in-house team generates less profit marginally.
“HOT isn’t just about making money,” she quips. “It’s about impact investing.”
A programme close to the heart of Mrs Durotoye is 100 Voices. July 2013, the Delta State-born YGL launched 100 Voices Coffee Table Book, a project to encourage entrepreneurship through the propagation of testimonies of young Nigerian ladies and some men who through the business model of House of Tara, have been able to improve their lives against all odds.
More Money, More Beauty
Euromonitor in it’s annual Colour Cosmetic in Nigeria report projected continued growth for the infant industry. “Although traditionally big in Nigeria, colour cosmetics is still far from mature, due to the low income of many women,” it read. According to World Bank findings, over 60 percent of Nigeria’s population still live below poverty level; a higher proportion of whom are women due to gender inequality in employment. Thankfully, Nigeria’s diversified economy is growing at 6 percent, one of the fastest in the world, and has enjoyed approval as the next economic power alongside other MINT nations – Mexico, Indonesia and Turkey. With an increasing middle class, more disposable incomes and increasing western influence on women, “demand for higher quality products will increase, spurring growth,” the report indicates.
One thing is certain, Nigeria is a massive market and cosmetic consumption has only just taken off. Owning a professional makeup kit cost N250,000 ($1520) for Darasimi Showunmi, CEO of Le’ Daisies Makeovers, who says her parents would never have permitted her to quit paid employment had they been unaware of Tara’s success. According to her, numerous Nigerian consunmers own N30,000 to N50,000 ($170-$300) worth makeup kits. For those on the lower echelon of economic power like university undergraduates, she says, “calculate. Averagely, foundation and power are N2000 ($12) each, at least four varieties of lipstick costing 250 ($1.5) each and a N500 ($3.30) eyeshadow.” And the trend is only just beginning.
The question is can House Of Tara use it’s platform in such a way that the consumer who wants international products can find a home in HOT and those who prefer local brands can find home in HOT?
“It would be good for us to eat from both markets,” Tara admits. “We literally built the industry so it’s our time to enjoy.”