Perfume Refiling Business is Eating Into Big Brands Kenyan Market

Fragrance products make up one of the largest segments in personal care industry

Capital to start perfume refiling is low depending on the fragrances one wants to start with.

Christabel Awuor, a Nairobi resident confidently walks into a beauty shop to get her weekly supply of Chloe cologne.

This is among the expensive fragrances in Kenya, but with only Sh.100 she is able to get the original brand which would have otherwise cost her Sh.20,000

This is the case for most Kenyans as the fragrance business gains traction in the country, especially in Nairobi’s Central Business District where several beauty shops are located.

“If I use it on a daily basis it can take close to two weeks (the 100ml bottle being refilled). The scent lasts for some hours and that’s okay with me since with as little as Sh.100 I can afford to smell nice for the better part of the day.” Awuor said.

Fragrance products make up one of the largest segments in personal care industry with growth at a double digits annually.

According to a market survey by Kasi Insight the perfume and fragrance industry is worth over $45 billion globally. In Africa, research estimates that the beauty market is worth $4.5 billion in South Africa, followed by Nigeria ($500 million) and Kenya ($300 million)

Enid Mbaka, a perfume refill trader on Tsavo Road says most of their perfumes are oil based unlike the original brands which are highly concentrated in alcohol.

“For someone who cannot afford the packed ones, [original brands], they now go for the oil based since they can get it in smaller quantities.” Mbaka said.

She explains that the oil based perfumes are more concentrated hence last longer compared to the alcohol based and only difference from the international brands is that they are not packaged.

The Kenyan fragrance product market is driven by growing attention to grooming which has seen increased spending on personal and beauty care products.

Perfumes are of utmost importance for both old and young generation especially among females and are an expression of lifestyle.

According to grooming experts, perfumes can help lift one’s spirits. They can also be used to reflect one’s mood.

A survey along Dubois Road, in Nairobi’s CBD, or a visit to Eastleigh market reveals that the fragrance refilling market is actually big.

Most original brands range from Sh.10,000 to Sh.55,000 in the beauty shops which is not affordable to a majority of the middle class and low income earners who make the most of the Kenyan population.

Established perfume shops on Nairobi streets such as Muindi Mbingu and Biashara have designer perfumes going for as much as Sh.12,000 for a small spray bottle of 15ml.

But penny wise Nairobians have found a way of smelling nice without necessarily breaking the bank.

They go for the refills that are basically original brands diluted with oil and sold at affordable rates. This they say are better than the ones sold online that are mostly imitations of original brands.

The high prices and imitations created a gap in the market that has seen many small entrepreneurs venture into the refilling trade since the capital needed to start perfume refiling business is low.

One can start with as little as Sh.3,500 for a stock of three different fragrances, display bottles, two dozen of three ml and a dozen of six ml refill bottles; 10 fragrances – Sh.12,000; 15 fragrances – Sh.17,000 and 20 fragrances – Sh.22,000.

The current retail market price is between Ksh.33 to Ksh.50/= per ml with the pricing mainly dependant on your location.

If you sell at a minimum of Sh.33 you have a gross profit margin of Sh.18 per ml.

Some traders have now gone further and apart from refilling and are now making their own fragrance in order to offer different variants from their competitors.

Demand for a signature scent among perfume users who can easily distinguish between cologne and perfume has been steadily rising over the years.

The trend saw French perfume maker, Adopt’ launch its products in the Kenyan market last October through a sole franchise deal with Lintons Beauty World.

The local beauty store with over 20 international brands in its portfolio added Adopt’ to provide options for customers looking for affordable designer products.

Kenya’s beauty and cosmetics industry has become the new investment attraction, pulling in big money from those keen on establishing new lines of business or snap up successful enterprises through acquisition deals.

Increased growth of the beauty and personal care market in the country, combined with the fact that Kenya is recognised as the sales and distribution hub for the larger East African market, has attracted many international brands.

International skincare and fragrance brands in the Kenyan market include: Chanel, Dior, Tom Ford, Issey Miyake, Bvlgari, Versace, Clinique, Estée Lauder, Lancome, Givenchy, Guerlain, Thierry Mugler, Yves Saint Laurent, Salvatore Ferragamo, and Burberry.

Mid-market cosmetic brands like Victoria’s Secret, Sleek, Petal Fresh, Freeman, Mary Kay, Simple, Bath & Body Work, Black Opal, Flori Roberts, Ombia (Austria) are also popular in the country.

A designer refill perfume business is a promising business with the right kind of target clients.

For you to start, you will first need to search for a supplier that will be supplying you in wholesale prices. Most wholesale price ranges from Ksh.12 to Ksh.15 per ml.

They mostly give a condition of purchasing five different fragrances of at least 60 ml each, for them to sell to you at a wholesale price.

The secret here is to choose fragrances that are first moving so that you will not remain with the same stock for so long.

Display bottles are also a must have and they mostly cost Ksh.200 per bottle. You will then need refill bottles which you can purchase in dozens. You can start with the 3 ml and 6 ml dozens.

You will then have to set a retail price of your perfumes depending on the profit margin you want to set but do not over price them. Remember the more you over price them the more time you will take to sell them.

*REQUIREMENTS.*

*Perfume.

*Display Bottles or Aluminium bottles.

*Refill empty bottles.

*PRICES.*

Perfume: 13 per ml minimum quantity of 50 mls.

Display Bottle: Ksh.200 per piece.

Refill Bottles:

2 ml: Ksh.120 per dozen,

3 ml: Ksh.120 per dozen,

4 ml: Ksh.180 per dozen,

6 ml: Ksh.200 dozen,

8 ml: Ksh.240 per dozen,

10 ml: Ksh.240 per dozen,

12 ml: Ksh.240 per dozen,

Spray Bottles: Price range Ksh.50 to Ksh.200 per piece.

Aluminium bottles: Ksh.80 per piece. If one does not have a shop we recommend you use the Aluminium bottles instead of the Display Bottles.

*HOW MUCH CAPITAL DOES ONE NEED?*

The amount of capital needed to start the business will depend on how many fragrances one wants to start with. Starting with 10 or 20 different fragrances helps one have a wide variety.

However one can start with as low as Ksh.3,000 (that’s a stock of three different fragrances of 50 mls each, 3 display bottles, 2 dozen of 3 ml & 1 dozen of 6 ml refill bottles).

The approximate budget for different number of fragrances including display bottles and a variety of roll on and spray refill bottles is as below:

*10 Fragrances – Kshs.10,000

*15 Fragrances – Kshs.14,000

20 Fragrances – Kshs.19,000

*WHAT ARE THE PROFITS MARGINS?*

The current retail market price is between Ksh.33 to Ksh.50 per ml. The price mainly depends on your location. So with the minimum of Ksh.33 you have a gross profit margin of Ksh.33 – Ksh.13 = Ksh.20 per ml.

Written By
Timothy Angwenyi
Business Consultant

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