By our special correspondent
Did you know that the market for baby products in Africa is worth billions of dollars? Currently, it is one of the most lucrative business opportunities in Africa. With the highest birth rate across nations, Africa now has the fastest growing population in the world. The continent’s population of nearly one billion at the moment is predicted to rise to 2.3 billion in less than 40 years.
By 2050, several African countries including Uganda, Chad, Mali, Guinea Bissau, Liberia, Niger, Burundi and Malawi are projected to triple in size. In the same period, Nigeria which is currently Africa’s most populous country will have become the world’s fourth biggest country.
All of these statistics point to one fact – at the current birth rates, more than one billion new babies will be born in Africa over the coming years. And so, we join hands with other stakeholders to explore five major lucrative business areas and opportunities that will provide the products and services to serve the needs of this multi-million dollar market.
But first, we will need to know what forces are driving the huge and growing market for baby products in Africa. Business opportunities exist because people have need and demand for particular products or services. It’s the usual practice to explore the reasons for these needs and demands so our readers can get a complete picture of the business opportunities and apply their creativity and judgment.
High birth and fertility rates
Although many of us may not know, there’s a big difference between the terms ‘birth rate’ and ‘fertility rate.’ Without getting too technical, birth rate refers to the number of live births in an area (like Africa) for every 1,000 people in a year. Fertility rate, on the other hand, is the average number of children born to one woman over the course of her life.
For Africa, both figures are the highest in the world. The average birth rate in sub-Saharan Africa currently stands at 35 babies per 1,000 Africans. This figure comes up to nearly 25 million babies born every year in Africa. This means that by the time you finish reading this, roughly 100 new born babies would have been added to Africa’s population.
Our continent’s fertility rate is also high. On the average, African women bear up to five children over the course of their reproductive lives. The reasons for the high birth and fertility rates include: poor use of contraceptives, inadequate family planning and strong cultural influences such as Africans traditionally preferring to have large families.
Whether this baby boom is good or bad for Africa’s future is still the subject of intense political, economic and social debate. We only wish to focus on the huge business potentials of providing for this large population of African babies. From the moment these babies are born, they will require food, clothing, care and many other things that currently sustain the multi-million dollar baby products market in Africa.
A rising rate of urbanization
Africa’s cities are now home to more than 40 percent of Africa’s one billion people. Africa’s urban population has been growing at roughly 3.5 percent every year and more than 500 million Africans will live in cities by 2030. At the moment, our continent is already more urbanized than India (30 percent) and a little less than China (45 percent). In less than ten years from now, up to 65 African cities will have over one million people living in them according to McKinsey Research. City people are more likely to buy modern products because they are more aware of, and have access to, a wide variety of brands, products and services. Urban residents also have more money at their disposal to spend on quality and safe baby products.
A huge and growing middle class
Africans in this economic ‘middle class’ are usually urban dwellers who hold salaried jobs or own and operate a small business. Many of them are young, well educated, and more aware of modern trends in products and services. Because they tend to have a strong interest in their children’s welfare, people in this bracket are more likely to pay more for baby products that provide high functionality, quality, safety and convenience.
The African Development Bank defines the African middle class as those who spend between $2 to $20 a day. At the moment, there are more than 300 million people on the continent who fit into this category and are driving fast economic growth in Africa.
According to a recent Deloitte report, “Africa’s middle class has tripled over the last 30 years, with one in three people now considered to be living above the poverty line – but not among the wealthy. The current trend suggests that the African middle class will grow to 1.1 billion (42%) by the year 2060. As African economies are growing – 7 of the 10 fastest growing in the world are African – the wealth is trickling down and Africa now has the fastest growing middle class in the world.”
Now that we have examined the size and potential of Africa’s baby boom market, it’s time to explore five specific products that hold lucrative business opportunities for African entrepreneurs. Many of these products are essential to the needs of this market while others can increase the satisfaction from already existing products and services. Here, therefore, are 5 lucrative baby products in Africa you can explore to serve the demands of this huge market.
Baby foods and formulas
Food is one of the most basic and important needs of babies. For many families, feeding a baby represents the highest cost element after the baby is born. In Africa, baby foods and infant formulas are increasingly supplementing or totally replacing breast milk which has always been the traditional source of nutrition for babies.
For the benefit of people reading this who do not know the difference between ‘baby food’ and ‘baby formula’, we’ll explain.
Baby formula (or infant formula) is a manufactured food for feeding babies and infants under 12 months of age. Formula is used as a full or partial substitute for human breast milk or in situations when the baby has special dietary needs. Baby formula looks and tastes like breast milk and appeals to mothers who cannot breast feed their babies due to health, preference or convenience reasons. Infant formula is sold under several brand names and the common ones usually contain cow milk extracts, a blend of vegetable oils, carbohydrates and a mix of vitamins and minerals.
On the other hand, Baby food is any soft and easily consumed food other than breast milk or infant formula, which is made specifically for babies between the ages of four to six months to 2 years. Baby food comes in several varieties and tastes, and unlike formulas, it’s not intended to look like or replace breast milk. Baby foods are either a soft, liquid paste or an easily chewed food since babies lack developed muscles and teeth to effectively chew. Babies typically move to consuming baby food once breast milk or formula is no longer sufficient to satisfy their appetite.
Baby food is one of the fastest moving baby products in Africa. Billions of these will be consumed by babies across Africa over the coming decades.
Most of the baby food and formulas sold in Africa are either imported from abroad or manufactured locally. Due to the delicate hygiene requirements for producing baby food and recent health scares of food poisoning in some countries, more parents now prefer to buy the major brands such as Heinz and Nestle. However, there are quite a number of new comers in the market that are starting to appeal to customers who cannot afford the big brands.
The children’s clothing market is one of the most lucrative segments of the global apparel industry and the value of this market is expected to reach $200 billion by the year 2023.
Because babies tend to grow fast over a short period, there is a frequent need to buy new clothing and this is a key reason for the huge volumes of children’s wear purchased by parents every year. Fast-changing fashion trends and every parent’s desire to buy the best for their children are also strong forces behind the high demand for kids’ clothes.
The options available in the baby wear market are extensive – ranging from luxury designer brands to used baby clothing donated by families who don’t need them anymore. In fact, used baby clothing is now a multi-billion dollar industry due to their high demand in many parts of Africa. Many parents prefer them because of their high quality and low cost. Africa’s home-grown baby clothing lines are already coming up in different parts of the continent. Online stores also stack up a huge inventory of baby clothing with a wide range of choices for expecting families.
Diapers and Nappies
There’s definitely no difference between a ‘diaper’ and a ‘nappy’ – they are both American and UK English terms for describing the same thing! Diapers are essentially underwear that allows babies to ‘pee’ and ‘poo’ in a ‘secret’ manner. I just couldn’t think of a clearer way to describe a diaper! Diapers are commonly available in two main forms – reusable cloth diapers and disposable diapers which are made from synthetic materials.
Diapers need to be changed on a regular basis when they become soiled to avoid skin problems like diaper rash (also called ‘nappy rash’). With most babies, diaper changes can happen up to five times in a single day. For a growing number of parents who prefer the convenience provided by disposable diapers, the cost of buying nappies can be very huge. Although they tend to cost more than reusable cloth diapers, disposables are fast becoming a favourite with many middle class and rich African families.
Because most middle income mothers are busy nowadays working at jobs or running their own business, disposable diapers allow them to avoid the dirty and time-consuming task of cleaning cloth diapers in order to bring them back to a reusable state. As a result of this growing preference for disposables, millions of dollars will be spent by African parents on this commodity alone. Over the last few years, low-priced diapers manufactured locally, or increasingly imported from China, have entered the African market. Due to their low price, poor families can now afford disposable diapers for their children.
Baby Body Care Products
Because a baby’s immune system is not fully developed, their skin and body care is a very sensitive and delicate issue. Babies need the mildest cleansers, lotions and detergents and these products need to be dye-free, fragrance-free and must not contain any strong chemicals which may affect a baby’s skin or breathing. There are quite a lot of products and brands in the baby body care category. Broad categories include:
- Baby soaps, washes/cleansers, and shampoos;
- Baby lotion that moisturize a baby’s skin;
- Petroleum jelly and ointments used to protect a baby from and treat diaper rash;
- Baby laundry detergent;
- Baby powder;
- Baby wipes and hundreds of other baby care products on the market.
General Baby Accessories
Having a new baby is usually a big and serious project for many parents. Because of a baby’s sensitive needs, lots of new stuff have to be bought. Some of these items may be bought every single time a new baby is expected while some other items – like prams, cots, mattresses and toys – may be purchased just once and used for all the babies born in a household. The full range of baby accessories is very wide with lots of big and small competing brands. I’ll just go through the major categories and highlight a few items within them.
Sleeping-related gear – This category includes: cots, beddings, baby monitor (a kind of ‘walkie-talkie’ that transmits a baby’s noises to the mother), blankets, mattresses etc.
Feeding equipment – Teats, feeding bottles, sterilizers, breast pads, feeding pillows, bibs, breast pumps and breast cold-packs.
Other stuff – Prams, strollers, high chairs, drawers and cabinets for storage, mobiles, toys (especially teddy bears), bouncer chairs, first-aid kits, thermometer etc.
Now we know the top selling baby products in Africa. What’s next?
We have explored the top five lucrative business opportunities that cater to the needs of Africa’s huge baby product market. The most interesting thing about this space is that all kinds of entrepreneurs – no matter the size of startup capital – can carve out a niche for themselves in this market. As long as you target the right customers who have a need for (and can afford) the products you’re selling to them, the baby products niche will definitely work for you.
The African baby products market is huge and entrepreneurs could target both the mass market (people who are not brand-conscious and just want a product that works) and the brand and quality-conscious segments of the market. We believe that the opportunities identified in this article can be taken further by your creativity and energy. If you are confident a business in this market will work for you, it’s important that you start working on a business plan as soon as possible.
We would love to hear from you about your successes, challenges, advice and questions.