One of travel retail’s most influential movers and shakers launched into the African domestic and duty-free markets for beauty about five years ago—and has never looked back.
David Dayan—who has helped brands like Lacoste, Lalique, Vilebrequin, and Wolford to become established in travel retail over three decades—established Beauty Luxe, based out of Dubai, to serve as an African distribution partner for major beauty players.
The CEO saw a gap in the market and duly filled it, bringing big names like Hermès, L’Occitane, L’Oréal Group, and Puig Group into the fold. Beauty Luxe currently supplies 80 perfume and cosmetics brands into the African market at all ends of the price spectrum, from 4711 and Tabac to Byredo and Lancôme.
At the same time, he established subsidiary operations in strategic locations such as Addis Ababa, Dar es Salaam, Kampala, and Kigali while using Paris as a base for West Africa, much of which is French speaking due to its colonial past. They supply both travel retail and local markets.
A Broad Presence
In total, Beauty Luxe now has a footprint in 27 African countries when it comes to travel retail distribution and has also expanded into directly run duty-paid operations in airports across India.
In association with local partner BCPL Beauty Concepts (which is mainly supplying the staff), the company is now at air gateways like Ahmedabad, Delhi, Goa, Indore, Jaipur, and Kolkata, with the stores accessible to all consumers because they are in the landside areas of the terminals.
The ambitions don’t stop there. Dayan told me: “We supply 3,000 pharmacies in Africa with La Roche-Posay and CeraVe (both L’Oréal brands). Our African business is booming. In India—where we only started in the market at the beginning of this year—we currently have 16 Beauty Luxe perfumeries and we continue to grow.”
In India, Beauty Luxe stepped into the tendering and concession game, bidding for retail spaces offered by Indian airport landlords. Having been successful, the company expects to close 2023 with 20 stores selling mainly perfumes, which account for 90% of revenue. The aim in 2024 is to reach 35 airport perfumeries in India.
“While there are some big operators handling the duty-free market, we see that 70% of travelers in India are local people. When I was traveling in India, I did not see any airport perfumeries [for them], so we launched one in Kolkata Airport. After two months we sold more than we expected and, for that reason, we decided to step on the gas pedal, and I brought a team to India to look at further airport opportunities.”
Still More African Potential
With a retailer mindset being cultivated at Beauty Luxe, the company is now turning back to Africa where the perfumery idea is also being leveraged, but in the domestic market. The company told BeautyMatter that it has signed up a 4,000-square-foot store in a mall in Kigali, the capital of Rwanda, that will begin operations next year if everything goes to plan.
Data from Statista values the beauty and personal care market in Africa at $62.1 billion this year, with a CAGR of 6% from 2023 to 2028. As might be expected, the largest segment is personal care at $29.5 billion, while revenue from fragrances is set to hit $7.9 billion this year and grow with a CAGR of 5.4% until 2028.
A Statista analyst says that the beauty market is “thriving and one of the fastest growing consumer markets” mainly because of a generational shift and young consumers entering the market. This change is being reinforced by social media usage, which has a powerful effect on buying behavior.
Referring to the perfume segment, Dayan said: “We are in the process of looking at premium locations in Kenya and Ethiopia, specifically Nairobi and Addis Ababa initially. Premiumizing the market is one of our aims.”
In five years, Dayan has built Beauty Luxe into a business with 300 employees at its locations around the world. Africa has been at the heart of the proposition, and the company’s unique skill set in this continent has given beauty brands that lack knowledge and/or expertise a shoe into these diverse markets.
With more young Africans entering the workforce each year by 2035 than in the rest of the world combined, the potential of Africa's youth to drive transformative change is substantial, and consumer segments like beauty are likely to be big gainers.
2 Article(s) Remaining