CONSUMER & RETAIL • SUB SAHARAN (REGION) • INDUSTRY TREND ANALYSIS • BMI

SSA Personal Care Production On The Rise,

Supporting The Local Consumer Market
20 Feb 2024
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Key View: Sub-Saharan Africa’s (SSA) personal care sector has historically relied heavily
of imports, which created an exclusionary price for many consumers. Growing levels of
investments from regional and international players and governments has created a
more fertile environment for production, while also coinciding with local and
international demand for both sustainable and naturally produced personal care
products. Multinationals such as Unilever, Proctor & Gamble and Colgate Palmolive are
also making mass-market products such as soaps, shampoos, sanitary products and
dental care more accessible while smaller producers are focusing on afro-centric
personal care items.
Region Still Reliant On Imports
In 2022, SSA imported nearly double the value of personal care products than it
exported. Total imports of personal care products rose from USD3.08bn in 2015, to
USD3.80bn in 2022 (latest available data), as regional demand increased on the
back of rising rates of urbanisation, demographic growth, higher disposable income
levels and the gradual formalisation of retail in the region. The shortfall between
imports and exports has grown 3.0% y-o-y from USD1.47bn in 2015, to USD1.86bn
in 2022 and will continue to diverge as regional manufacturing and processing of
raw materials compound the difficult operating environment and challenging supply
chains. Governments and the private sector, however, have continued to expand
the scope of their interest into the personal care sector, as an abundance of raw
material inputs and nascency of the consumer base means that growth potential
remains high.

Region Still Reliant On Imports

SSA - Personal Care Product Exports & Imports, USDmn (2015-2022)

Source: Trade Maps, BMI

South Africa Is The Strongest Market In The Region

South Africa's role as a major producer of personal care products has traditionally
been limited in previous decades. South Africa’s role as the leading manufacturing
hub in SSA and it’s importance as a port of entry for many consumer goods in
Southern Africa has meant that the market accounts for the largest base of
personal care exports. In 2022, South Africa exported USD663.5mn worth of
personal care products, followed closely by the neighbouring market Eswatini, which
exported USD582.9mn. South Africa accounted for 34.2% of total SSA exports
(which summed to USD1.94bn) in 2022, while the next largest producer outside of
Southern Africa is Cote d’Ivoire, who exported USD263.1mn (or 13.6% of SSA
exports) worth of personal care products.
South Africa’s established production capacity, with international players, such as
L’Oreal, Proctor & Gamble (P&G), Unilever, and Colgate Palmolive and even local
players such as Tiger Brands, having created a market that forms key supply for
both the local market, and neighbouring Botswana, Lesotho, Mozambique, Namibia,
and Zimbabwe. Innovation and elements of premiumisation have quickly filtered
into the South African consumer market for personal care products, with
households having a stronger base of disposable incomes to utilise when
purchasing higher priced products. Despite growing levels of local production,
South African imports of personal care products remains high, growing 1.8% from
USD905.8bn in 2015 to USD1.1bn to 2022. Natural products such as aloe, baobab,
camphor, marula and Ximenia have become major ingredients in locally produced
goods and have resulted in a growing sector of hair relaxers, conditioners,
shampoos for local consumption (produced largely for the local market) and for
regional export markets.

South Africa Dominant, Growth In East And West Africa

SSA - Personal Care Exports, USDmn (2022)

Source: Trade Map, BMI

East Africa Growing In Prominence

While accounting for a relatively small share of personal care product exports, East
Africa has seen substantial growth in their growth of both production and exports.
Between 2015 and 2022, Kenyan exports have grown 8.4% y-o-y from USD26.6mn
in 2015, to USD47.0mn in 2022. Tanzania has shown the fastest annual compound
growth rate (CAGR) of 19.5% y-o-y, with exports expanding from USD13.3mn in
2015, to USD46.3m by 2022, notwithstanding the surge in exports to USD86.4mn
over 2021. Ugandan growth has averaged 8.5% y-o-y between 2015 and 2022, with
total exports reaching USD27.1mn in 2022.
Madagascar has also been a growth outperformer, with total exports growing 17.5%
y-o-y from USD24.3mn in 2015, to USD75.2mn by 2022. Collectively, the region has
benefitted from both the presence of large multinationals, but also smaller scale
players producing goods which meet the growing regional and global demand for
afro-centric and more natural products. Unilever has production and distribution
units in markets such as Burundi, Kenya, Malawi, Rwanda, Tanzania, and Uganda,
and has boosted the local availability for basic products such as sanitary products,
toothbrushes, toothpastes, soaps, and creams.

East Africa Seeing Elevated Growth

SSA - Export Growth Rate, USD, % y-o-y average (2015-2022)
Source: trade Map, BMI

The use of highly popular essential oils such as eucalyptus, tea tree, cedarwood,
moringa and citrus has quickly filtered into products such as shampoos and body
sprays in East Africa. Traditional medicines and remedies in the regional (and
broadly across SSA) are highly centred around natural products, and small to
medium size companies have marketed their products around the natural
properties.
West Africa Benefitting From Robust Inputs
Personal care production in West Africa has benefited from a substantial base of
inputs. While manufacturing and processing capabilities means that the leading
markets such as Nigeria and Ghana remain heavily reliant on imports to meet
demand, smaller scale players have leveraged the abundance of products such as
shea (a key ingredient in shea butter creams, soaps and shampoos) and coconut to
create natural and afro-centric products.
Cote d’Ivoire is the most developed exporter, with total exports expanding from
USD195.8mn in 2015, to USD263.1mn in 2022, however smaller markets are
displaying high growth. Senegalese exports have grown by a compound annual
growth rate of 9.4% y-o-y over the 2015-2022 period, reaching USD88.6mn in 2022,
making it the fourth largest exporter in SSA. Togolese exports have also risen from
USD45.7mn in 2015, to USD76.6mn in 2022, declining slightly from the high of
USD82.1mn in 2020. The expansion of exports will be supported by continually
strengthening demand in markets such as Nigeria, Ghana, Cote d’Ivoire and
Cameroon, where a mixture of large demographic bases and disposable income
growth support higher spending on personal care.
Over the longer-term, we see longer term growth prospects for the regions
personal care sector to be positive, as goods are positioned as natural, high quality
and traditional African cosmetics. Increased compliance with international
standards, and a sustainability (including ethical sourcing and social benefits) and
cultural component (traditional, indigenous ingredients from Africa) will be key in
growing demand both on the continent, but also amongst the large diaspora in
North America and Western Europe (NAWE).

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