Consumer trends such as interest in sustainable products, the demand for multicultural skincare and haircare products (designed for different skin and hair types), the opening up of new export markets in Africa, and the rise of new categories (e.g., greener products) will help to drive growth in South Africa’s cosmetics industry beyond the COVID-19 pandemic.
That’s according to Vinny Perumal, CEO of KAS Africa, Africa’s leading contract manufacturer of personal, home, baby and oral care FMCG products. She says that the cosmetics industry is slowly recovering from last year’s hard lockdown, with leading manufacturers looking for new ways to catalyse growth.
“Even before the pandemic, the local cosmetics industry faced difficult market conditions due to Eskom’s load shedding and weak economic growth,” says Perumal. “The hard lockdown last year was a severe blow, and the market has yet to recover entirely.
“However, many manufacturers are now looking at the market with renewed optimism. Trends such as more open trade between African countries, higher levels of government support for local production, and a new sense of urgency about addressing the power crisis bode well for the future.”
Market favours agile, local producers
Perumal says that while consumers focused spending on essential items during the pandemic, many haircare and beauty retailers benefitted from them purchasing products to use at home while beauty and hair salons were closed. Along with higher levels of ecommerce adoption, these trends will play a major role in shaping the future of the hair and beauty sector in South Africa.
According to Who Owns Whom, the cosmetics manufacturing industry was worth around R27 billion at retail level and R20 billion at manufacturing level in 2019. Perumal says that large international brands traditionally held a significant portion of market share, but new consumer trends are beginning to favour agile local producers.
“Diversity and inclusion have become more important than ever, and South African manufacturers and brands can be more flexible in meeting demand for products that address evolving local tastes,” she adds. “Local brands are leading the way in addressing a lack of products targeting diverse hair and requirements.”
Perumal says that South African manufacturers are also uncovering new niches in markets such as natural and organic products, more sustainably manufactured products, cannabis-infused cosmetic products and men’s grooming products.
Beyond South Africa’s borders, even more exciting opportunities beckon. With Africa’s middle class on the rise and growing levels of urbanisation, the continent is one of the fastest-growing markets for beauty and personal care products in the world. The African Continental Free Trade Area (ACFTA) could help South African manufacturers to move successfully into this market, says Perumal.
Africa is estimated to account for around 3% of the $500 million global cosmetics industry and, according to Who Owns Whom, the market was growing by around 8-10% a year before the pandemic. This creates opportunities for South African manufacturers to not only export, but also to consider setting up regional factories to service growing demand in other parts of the continent, Perumal adds.
She concludes: “The South African cosmetics supply chain has shown resilience in weathering the COVID-19 storm. It has proven itself to be globally competitive in terms of quality, efficiency, and innovation. With support from retailers, government, and consumers it has potential for strong growth in the years to come, with considerable scope to drive job creation and consumer choice.”
About KAS Africa
KAS Africa is a leading contract manufacturer of personal, home, baby and oral care FMCG products and operates one of the continent’s foremost manufacturing plants in terms of size, volume, research excellence, product variety and capability standards. The company collaborates with major national and multinational clients to take their idea from concept, design and research through to production. KAS Africa bridges international quality standards with African values of innovation, collaboration and flexibility. As a majority black woman-owned business, KAS Africa is creating new standards for manufacturing built the African way.
For more information, visit https://kasafrica.com/.
For media queries, please contact:
Thuli Lamani (Idea Engineers on behalf of KAS Africa)
Cell Nr: +2783 716 2572