The global beauty industry is huge, valued at over $500 billion and projected to grow even further in the coming years. As beauty brands across the world race to meet the ever-increasing demand for innovative products, a lot more importance and responsibility has also been placed on manufacturing capabilities, with particular focus on fast emerging markets like Africa. Records show that by 2030, business-to-business spending in African manufacturing spending is projected to reach $666.3 billion. Although these figures are inclusive of Africa’s beauty manufacturing landscape, the question remains whether or not it can keep pace with the global beauty industry.
Africa's beauty industry has shown tremendous potential, driven by a growing middle class, urbanization, and increased disposable income. With Statista reporting that the Beauty and Personal Care industry in Africa is projected to reach $65.93 billion by the end of 2024, and with a CAGR of 5.99% between 2024 and 2028, there’s a strong growth trajectory expected in the coming years. Despite this promising outlook, the continent’s beauty manufacturing landscape faces significant challenges that set it apart from its global counterparts. “One of the key differences [between Africa and the global manufacturing landscape] is the level of industrialization,” Aziza-Elize Brady, Lead Biochemist and Managing Director of South Africa-based cosmetics manufacturing company, Alchem Labs, says to BeautyMatter. “While regions like North America, Europe, and Asia boast highly developed manufacturing infrastructures with advanced technology, Africa's manufacturing sector is still in its infancy, and this disparity is rooted in historical, economic, and political factors that have limited the continent’s industrial development.”
Professional services firm, KPMG, recently released a report asserting Africa’s manufacturing sector contributes only about 10% to its GDP, compared to over 20% in East Asia and the Pacific over the past decade. This has resulted in a reliance on imported goods—which was valued at $305,528 million in 2021—including beauty products, to meet local demand. However, this dynamic is gradually changing as local manufacturers and brands begin to emerge, driven by a desire to cater to the unique needs of African consumers and reduce dependency on imports.
Homegrown Labs vs. Global Giants
When comparing the labs and manufacturing facilities in Africa to those abroad, the differences are stark. Global beauty giants like L‘Oréal, Estée Lauder, and Shiseido operate state-of-the-art R&D labs and production facilities that are equipped with the latest technology and staffed by teams of scientists and engineers. These facilities enable them to innovate rapidly, create high-quality products, and maintain stringent quality control standards. In contrast, many African beauty manufacturers operate on a much smaller scale, often with limited access to advanced technology and research facilities. “The lack of investment in R&D is a major hurdle, as it limits the ability of local companies to innovate and compete on a global scale,” beauty entrepreneur and founder of Olori Cosmetics and Olori Beauty (US), Toyin Odulate, says to BeautyMatter.
Odulate had previously worked on marketing key brands like SoftSheen-Carson and Garnier at L’Oréal for the Sub-Saharan African markets, later representing the Middle East and Africa zones. “The nonpopularity of cosmetics science as a course, and therefore the limited specialized talents also further hampers the development of this robust manufacturing sector,” she continues. However, this gap is beginning to narrow as more African companies invest in R&D and seek to develop their own formulations tailored to local needs. Brands like R&R Skincare by Valerie Obaze for example, have a private manufacturing hub in the north of Ghana, where production is being monitored to meet international needs.
To compete globally, African beauty brands are focusing on innovation, requiring them to make significant investments in R&D. Ghanaian-American founder of Hanahana Beauty, Abena Boamah-Acheampong, recently crowd-raised close to $200,000 from her customer investments, which she in turn invests in corporatives in Ghana, supporting local communities and improving the R&D research facilities from where certain ingredients present in their hero products, like shea butter are sourced. Today the brand is spread across beauty’s heavyweight retailers like Ulta Beauty, competing with other giant cosmetics brands. On a workforce front, the African Centre of Excellence for Innovative Teaching and Learning Mathematics and Science (ACEITLMS) in Rwanda is working to boost the continent’s capacity in STEM fields, which could have a positive impact on industries like cosmetics. They do this by partnering with platforms such as the World Bank, World Health Organization, and UNESCO, creating research materials and diverse academic journals.
In addition, collaborations, mergers, and acquisitions between African beauty brands and global companies are helping to bridge the gap. For instance, South African beauty company, Sorbet, was recently acquired by Clicks Group for 109 million South African Rands ($5.7 million), with an aim of expanding its reach and improving its manufacturing capabilities. Moreover, some African manufacturers are leveraging the continent’s rich natural resources to create unique, high-quality products either for themselves or for third party brands. Ayewa Labs, SDK Cosmetics, Brunational, LamChem, SkinChem, and Alchem Labs, are a few of these companies. “One of the services we offer [at Alchem Labs] is to create cosmetics products for emerging brands, as well as advising them on the right formulations to use after doing our research to see what’s best,” Brady says. Alchem Labs also advises on grants programs for brands with less financial resources.
The use of indigenous ingredients like shea butter, argan oil, and marula oil not only sets African brands apart but also taps into the global trend towards natural and sustainable beauty products. Brands like East Africa’s Uncover Skincare are also competing globally by sending these local indigenous ingredients abroad, where they are merged with modern science and technology to create exciting new SKUs.
Challenges and Opportunities for Growth
One of the most significant challenges facing African beauty manufacturers is the supply chain. The continent’s infrastructure is still developing, and issues such as unreliable power supply, inadequate transportation networks, and bureaucratic decisions can cause delays and increase production costs. These challenges are compounded by the fact that many raw materials and packaging components still need to be imported, adding further complexity and expense to the supply chain. “A significant hurdle to cross is also the increment of taxes from the government,” Odulate says, “making it difficult for manufacturing to take place, and therefore slowing down its pace.”
Meeting global standards in manufacturing and product quality is another significant obstacle. International regulations, such as the EU’s stringent cosmetic safety standards, can be difficult to navigate for companies with limited resources and expertise, especially those seeking globalization. Failure to comply with these regulations can prevent African brands from entering lucrative markets abroad. To address this, some African companies are seeking certification from international bodies like ISO (International Organization for Standardization) to demonstrate their commitment to quality and safety. Others are partnering with global contract manufacturers who can help them meet these standards and gain access to international markets. Those brands who still seek to manufacture Africa are working with companies with a strong knowledge of the country by country policy. “Because each country has their policy when it comes to cosmetics, we do individual research and manufacture products for brands based on the market they’re looking to enter,” Brady says. “Some countries have materials that are considered counterfeits, so it’s important to understand their regulations during production.”
Despite the challenges, there are significant opportunities for growth in Africa’s beauty manufacturing sector. The continent’s young and growing population, coupled with an increasing focus on beauty and personal care, presents a vast and untapped market. As more African consumers seek products that cater to their specific needs, there is a growing demand for locally made beauty products. In addition, the rise of e-commerce is opening up new avenues for African beauty brands to reach global audiences. Online retail giants like Jumia are providing African brands with access to international consumers, allowing them to bypass some of the traditional barriers to entry in global markets.
Investment in infrastructure and education will also be crucial in supporting the growth of Africa’s beauty manufacturing industry. The beauty manufacturing landscape in Africa is at a pivotal moment. While some countries in the continent face significant challenges in keeping pace with the global beauty industry, there are also numerous opportunities for growth and innovation. By investing in R&D, leveraging local resources, and navigating the complexities of the supply chain, African beauty brands have the potential to compete on the global stage.
However, achieving this will require a concerted effort from all stakeholders, including governments, private sector players, and international partners. As the industry continues to evolve, it will be crucial for African beauty manufacturers to remain adaptable, innovative, and committed to quality. With the right support and investment, Africa’s beauty industry can not only catch up with the global market but also carve out a unique and influential role within it.
