• Login
    • Join
  • Subscribe Free
    • Magazine
    • eNewsletter
    Checkout
    • Magazine
    • News
    • Exclusives
    • Applications
    • Technology
    • Market
    • Other
    • Top 40
    • Buyers Guide
    • Hygiene Directory
    • More
  • Magazine
  • News
  • Exclusives
  • Applications
  • Technology
  • Market
  • Other
  • Top 40
  • Buyers Guide
  • Hygiene Directory
  • Current / Back Issues
    Features
    Editorial
    Columns
    Digital Edition
    Southeast Asia Edition
    eNewsletter Archive
    Editorial Guidelines
    Subscribe Now
    Advertise Now
    Top Features
    A Conversation with the Responsible Flushing Alliance

    Nice-Pak Meets Consumer Demands

    Home Care Wipes: Sustainability in Sharper Focus as Cleaning Frenzy Simmers Following Pandemic

    Face Masks in Asia

    Kingsafe’s Growth Path
    Company Cameo
    Financial News
    Machinery Equipment
    New Products
    Nonwovens News
    Patent Review
    People in the News
    Supplier News
    Top News
    Live From Shows
    Top News
    Precision Textiles Offers Biodegradable Medical Fabric

    Northshore Launches Megamax Briefs in New Colors

    Metrex Launches CaviWipe 2.0 Surface Disinfectant Wipes

    Aplix Expands in France

    Hospeco Launches WetWorks +Plus Pre-Saturated Surface Disinfecting Wipes
    Nonwovens Insights
    Online Exclusives
    Absorbent Core
    Adult Incontinence
    Antimicrobials
    Apparel
    Automotive and Transportation
    Chemicals / Adhesives
    Construction
    Contract Services
    Diaper, Baby
    Electronics
    Feminine Hygiene
    Fibers
    Filtration
    Flame Retardance
    Geotextile / Agrotextile
    Home Products
    Hygiene Film/Components
    Industrial / Institutional
    Inspection / Quality Control
    Machinery and Equipment
    Medical
    Wipes

    Precision Textiles Offers Biodegradable Medical Fabric

    Northshore Launches Megamax Briefs in New Colors

    Metrex Launches CaviWipe 2.0 Surface Disinfectant Wipes

    Hospeco Launches WetWorks +Plus Pre-Saturated Surface Disinfecting Wipes

    A Conversation with the Responsible Flushing Alliance
    Air Through Bonding
    Airlaid
    Carded/Carding
    Chemical Bonded
    Composite
    Meltblown
    Needlepunch
    Nanotechnology
    Spunbond
    Spunlace
    Thermal Bonded
    Wetlaid

    Mondi Starts Face Mask Production in Germany

    Meltblown—Nonwovens' Golden Fleece

    Armbrust Expands Product Line Up

    Spotlight on Spunlace

    Wolf Starts Up Meltblown Line
    China
    Eastern Europe/Russia
    India
    Middle East/North Africa
    North America
    Pacific Rim
    South/Central America
    Turkey
    Western Europe

    ANEX+SINCE to be Held in July

    Kingsafe’s Growth Path

    Southeast Asia Nonwoven Capacity and Demand Development

    Jofo Focuses on Expansion

    Supreme Nonwoven Group
    Associations
    Contracts / Awards
    Education
    Facilities / Capacity
    Green / Sustainability
    Legal / Regulatory
    Market Data
    Mergers and Acquisitions
    Product Improvement / Innovation
    R&D/Basic Research
    Shows / Events

    European Nonwovens Production Exceeds 3 Million Tons

    INDEX Postponed to October

    ANEX+SINCE to be Held in July

    Bondex Adds Needlepunch Line in SC

    Joa Announces Expandable Absorbent Core Wrap Solution
    Chart
    Companies
    All Companies
    Categories
    Company Profiles
    Add New Company
    International Buyers Guide Companies
    Mechanical Specialties, Inc.

    Shemesh Automation

    Cellulose Solutions LLC.

    Schott & Meissner Maschinen- und Anlagenbau GmbH

    Alliance Machine and Engraving
    Brands
    Brand Owners
    • Magazine
      • Current / Back Issues
      • Features
      • Editorial
      • Columns
      • Digital Edition
      • Southeast Asia Edition
      • eNewsletter Archive
      • Editorial Guidelines
      • Subscribe Now
      • Advertise Now
    • Breaking News
    • Buyers Guide
      • All Companies
      • Categories
      • Company Profiles
      • Add Your Company
    • Applications
      • Absorbent Core
      • Adult Incontinence
      • Antimicrobials
      • Apparel
      • Automotive and Transportation
      • Chemicals / Adhesives
      • Construction
      • Contract Services
      • Diaper, Baby
      • Electronics
      • Feminine Hygiene
      • Fibers
      • Filtration
      • Flame Retardance
      • Geotextile / Agrotextile
      • Home Products
      • Hygiene Film/Components
      • Industrial / Institutional
      • Inspection / Quality Control
      • Machinery and Equipment
      • Medical
      • Wipes
    • Technology
      • Air Through Bonding
      • Airlaid
      • Carded/Carding
      • Chemical Bonded
      • Composite
      • Meltblown
      • Needlepunch
      • Nanotechnology
      • Spunbond
      • Spunlace
      • Thermal Bonded
      • Wetlaid
    • Market
      • China
      • Eastern Europe/Russia
      • India
      • Middle East/North Africa
      • North America
      • Pacific Rim
      • South/Central America
      • Turkey
      • Western Europe
    • Other
      • Associations
      • Contracts / Awards
      • Education
      • Facilities / Capacity
      • Green / Sustainability
      • Legal / Regulatory
      • Market Data
      • Mergers and Acquisitions
      • Product Improvement / Innovation
      • R&D/Basic Research
      • Shows / Events
    • Top 40 Companies
      • Chart
      • Companies
    • Online Exclusives
    • Hygiene Directory
      • Brands
      • Brand Owners
    • Slideshows
    • Experts Opinions
    • Videos
    • Podcasts
    • Infographics
    • Whitepapers
    • Jobs
    • Events
      • Industry Events
      • Live From Show Events
      • Webinars
      • Live From Asian Connections
    • Resources
      • Suppliers Gallery
      • Literature Showcase
      • Web Showcase
      • Home Page Showcase
    • About Us
      • About Us
      • Contact Us
      • Advertise With Us
      • Privacy Policy
      • Terms of Use
    Diaper Duty

    How Does a Diaper Manufacturer Prepare for Africa Continental Free Trade Area?

    Whenever you make a decision to go to emerging markets, you will need conviction

    03.05.20
    By Raymond Chimhandamba
    Handas Consulting, Johannesburg, South Africa



    Africa’s disadvantage becomes an advantage. With the kind of challenges that the continent faces, it is easy to have the mindset that AfCFTA will not take off and instead either ignore it or adopt a wait and see position.

    The interesting thing about Africa is that in a few cases its weaknesses and disadvantages of the past have worked out to be advantages today. Take the trend of the mobile phenomenon as an example. Africa had a lot of people that had been waiting in the queue for years to get a phone installed in their homes. This problem was solved with the emergence of mobile phones. The increase in mobile subscribers has created a disruption as projections for new mobile subscribers have been beaten every year for the past 10 years.

    The only other product I can think of that attracted more users than expected was the electric toothbrush. I believe the inventor of the electric toothbrush had paraplegics in his mind as his target market. Then it turned out that a good number of able bodied people wanted to use the product too. An inventor’s delight! Can you imagine discovering that your market is actually bigger than what you thought by several multiples? That is comparable to what happened to Africa and the mobile phone.
    Imagine a situation where you expected the uptake of your device to be from managers level upwards. And then in reality you realize that the uptake is from supervisor level upwards. There is a whole band of customers that you had not quite expected to be your customers but are. And for the level of convenience that mobile phones offered, companies issued them to their teams at a really fast pace too, adding to the rapid pace of mobile phone penetration in the region.

    According to a UN report, Africa has 650 million mobile phones, higher than the number of cell phones in the U.S. or Europe. The report indicates that in some countries in Africa, more people have access to mobile phones than people who have access to clean water, a bank account or even electricity. Just to clarify, I am not saying that the scenario that I have just described is a good thing. The point that I am trying to make is that things just work differently in Africa sometimes where there are completely different market dynamics than in other areas. This is why the cut and paste models do not quite apply to Africa. This high number of cell phones is driven by a situation where too many people have been waiting for a service for so long when a disruptive solution does come, it is pretty much over-subscribed. And as a result, Africa has led the world in the solutions around mobile money today. Africa also has the of not being tied down by legacy banking mind-sets of old because the penetration for bank accounts was not very high in the first place, they are free to experiment in a sense. Therefore we have seen how well M-pesa has done as a payment solution for rural and urban businesses alike.

    To take another example, also from an emerging market, and in our space this time, one can also observe what happened with the Indian diaper market. One school of thought concludes that Unicharm’s strategy to introduce pants style diapers in India was aided by several factors that prevailed at around the same time. When Unicharm launched pants format diapers in India, per capita household income was beginning to rise, as more women were beginning to join the workforce. Salaries were also increasing because the economy was doing well. Diaper penetration at that time was very low anyway at 3%, according to a Cyber Media Research.

    Unicharm’s aggressive marketing and aggressive pricing for pants, which was slightly below tape diapers, ensured that pants outpaced tape diapers. By the time diaper penetration had doubled to about 6%, pants diapers were the leading format so open diapers could not keep up with the pace. This means for most new users, the pants style diaper was the first diaper format they were exposed to. This is what entrenched the pants format in the consumer’s mind and hence in the market. Other Asia-Pacific markets like Bangladesh, Philippines and China are not like that. They do not have the 90% pants format penetration that India has.

    My personal opinion though, as someone who has launched pants diapers in a market dominated by tape diapers, I think that any mother, presented by pants and tape diapers at more or less the same price, would take pants. I do not know the price differential for pants and diapers in those other markets but I would argue that it is a relevant factor. But that is a discussion for another day.

    These two examples from emerging markets illustrate very clearly that entering emerging markets takes a certain level of conviction. You have to have conviction in your strategy in order for it to work. The other simpler term for it is courage. I may add that when Unicharm was building their factory in Egypt as the Arab spring swept across North African countries. But they stayed the course. When Hayat was constructing their $100 million factory in Nigeria, the currency devaluation, driven by low global oil prices, hit the economy so hard a number of businesses went under. In fact, around that time Wemy stopped manufacturing their baby diaper range, and started importing. Then they stopped baby diapers altogether, only to re-launch about three years later in 2019. But Hayat stayed the course. Investing in emerging markets requires conviction. More than any other markets.

    So for players that want to take the decision that AfCFTA may not work and ignore it, the question that you want to ask yourself is this. What if it works? Are you prepared to be left behind in this market where more than half of the fastest growing economies on the globe are situated? Are you prepared to play second fiddle to your competitors who may have taken a different decision from yours?

    Africa Continental Free Trade Area
    Now back to Africa. How does a diaper manufacturer prepare for the Africa Free Trade Agreement? I have already said it and I will repeat it. You need conviction. I joke. But more seriously…I repeat this point because it is key.

    I would look at this in two ways. Whether the diaper manufacturer is already operating in Africa or not. If yes, there are a number of things that current players in the region are already doing that put them in the position of readiness. For example, the model of manufacturing in one hub and taking the goods to several other markets within the region is already happening now anyway. The big multinationals are manufacturing in South Africa and exporting product to East Africa and in some cases West Africa, as well as other markets within SADC. The added advantage this time is that there will be no duties to pay and delays, where they were happening are likely to reduce. A no duties reality means that your product can land in the new markets cheaper than before, so the uptake and category penetration may improve from this point forth and it will mean better revenues, better margins and better business for you. Good reasons to step forward and consider AfCFTA rather than to stay on the side-lines.

    In terms of packaging, the products of multinationals that are currently exporting are already compliant with labelling legislation in the various jurisdictions. French in Francophone markets and so on. Most products from South Africa have multi-lingual labelling anyway, from Portuguese, French, English, Arabic and sometimes even Spanish, Korean and Japanese. Some markets are more stringent than others. Take Nigeria, where one has to be registered with a government body called NAFDAC, the National Agency for Food and Drug Administration and Control. This is the government agency that is responsible for regulating and controlling the manufacture, importation, exportation, advertisement, distribution, sale and use of food, drugs, cosmetics, medical devices and chemicals.

    Consumer goods being what they are, one needs the consumer numbers for the economies of scale and the higher the concentration of consumers in the same area, the better and easier it is to service them. That is why it is easier to service urban markets than rural far flung markets that are more scattered. That is why it is better to think of your African markets in terms of cities rather than countries. Think of what you will do in the sub-regions, North Africa, West Africa, East Africa, Southern and Central Africa. Next you want to think what you will do in the cities in those sub-regions. Forget the borders. Think cities. Think what you will do in the West African sub-region. In Lagos, Abuja, Accra, Abidjan and Dakar. For East Africa think Nairobi, Dar Es Salaam, Kampala, Kigali.

    By approaching your markets this way, you are already halfway to being aligned with the AfCFTA model, which aims to remove borders. Win the cities and next you can think of how you will manage the smaller cities. They will be more difficult to service. But they will add some numbers to your base volume of the big cities.

    You will also need someone at the executive level to be responsible for your AfCFTA project. If not at executive level, the designated head of the AfCFTA must be granted executive powers. The reason for this is because tough decisions will need to be made along the way and quickly, and if whoever is responsible for this project does not have the power to decide, the project will ultimately fall flat. The team will face some difficulties but above all they will learn. From this core team some champions will emerge. You want to use these to be the leaders of your regional projects. You want to deploy them to oversee the places where you are having bottlenecks.

    For a new player in the African market, I would keep the cities approach in my launch strategy. I would start with the modern trade, which is the low hanging opportunity, because it is growing and also very familiar. Your key account management principles that you are used to apply here. You can run your loyalty programs and execute your promotional calendars with ease. This is familiar territory. Things change when you must now deal with the informal channel, which the bigger chunk of the business anyway. For this one, put on your learning hat. Be prepared to learn as you go. Think of it as parenting. That crucial role and probably one of the most important roles any human may have to perform. And yet for a task so huge and so crucial for the future the species, there is no school for it. You learn as you go. You make and correct your mistakes as you go. And yes… some mistakes you never get a chance to correct. Such is life. And such is business in Africa. Over-stated I know but do I make my point hit home?

    It is probably easiest to work with distributors that already have a regional footprint. They will have the capacity to take your product far and wide. But it also means that they are already big and they may not be as hungry. And if their core revenue is coming from other categories, they may not be as hungry to build your business as you may want. This is where it may count to build your own capacity. Perhaps with a medium sized distributor whom you will support slowly and organically until they grow regionally. They will be hungrier to grow. You will be their bread and butter. In all that time mutual trust will be built. The trust element will count for a lot in future when you must co-invest and make bigger investments for the future of your mutual businesses. The distributor will learn more about the category with time. They will teach your team about the market dynamics, especially the informal channel, which may vary by region and by country. Those slight nuances can make or break your strategy. So there will be a lot to learn.
    Related Searches
    • south africa
    • diaper
    • egypt
    • Unicharm

    Related Diaper Duty

    • East Africa: Months Away From First Meltblown Line

      East Africa: Months Away From First Meltblown Line

      African entrepreneurs are stepping up to make their contribution to Africa’s Covid preparedness and near-sourcing strategy
      Raymond Chimhandamba, Handas Consulting 11.12.20

    • Looking Outside Africa’s Biggest Market

      Looking Outside Africa’s Biggest Market

      What to do when you want to enter the Nigerian market but you find it is too complex for your appetite? Create your own Nigeria.
      04.03.20

    • Africa’s Hygiene Sector Leaders and Significant Players

      Africa’s Hygiene Sector Leaders and Significant Players

      New players are coming up to dominate categories that have traditionally been the space of multinationals
      02.07.20


    • Diaper, Baby | Middle East/North Africa

      The Pull-up Diaper in Africa: Opportunities, Myths and the Self-fulfilling Prophecies

      Brands should look at winning strategies from other regions and add local flair
      Raymond Chimhandamba, Handas Consulting (Africa Market Specialist), Johannesburg, South Africa 01.03.20

    • Sustainability, Africa Region and the Hygiene Sector

      Despite the shocking statistics, many African nations are actually at the forefront of the fight against plastic
      Raymond Chimhandamba, Handas Consulting (Africa Market Specialist) 12.10.19

    • Diaper, Baby | Middle East/North Africa | South Africa
      E-Commerce in Africa and the Opportunities for a Hygiene Manufacturer

      E-Commerce in Africa and the Opportunities for a Hygiene Manufacturer

      E-commerce in Africa is growing, but it is still in diapers. How can a diaper brand take advantage and be ahead of the curve?
      11.08.19


    • Deciphering the Nigerian Diaper Consumer

      Looking at the consumer’s social influences, social pressures and habits that shape the consumer’s brand and purchase decisions
      10.11.19

    • Diaper, Baby

      The South African Diaper Market

      South Africa is Africa’s second biggest economy and the most developed
      Raymond Chimhandamba, Handas Consulting (Africa Market Specialist), Johannesburg, South Africa 09.13.19

    • Nigeria Hygiene Space is About to Get Exciting

      Nigeria Hygiene Space is About to Get Exciting

      Country is Africa’s biggest market by population size.
      Raymond Chimhandamba, Handas Consulting, South Africa 08.05.19


    • Diaper, Baby | Middle East/North Africa | South Africa

      Technology, Low Income Channels and the Diaper Category

      Innovation does not have to be complicated or fancy to be effective
      Raymond Chimhandamba, Handas Consulting (Africa Market Specialist), Johannesburg, South Africa 07.11.19

    • Of Shoes and Diapers

      It is not what you see/know that matters but rather how you interpret what you see/know
      Raymond Chimhandamba, Handas Consulting, South Africa 06.05.19

    • Taboos in Our Industry

      Customers still have trouble discussing menstruation, incontinence
      Ray Chimhandamba, Handas Consulting, Johannesburg, South Africa 05.03.19


    • How to Use Tech to Address Africa’s Hygiene Challenges

      An aunt sitting in London could order a pack of sanitary pads for a niece in the remotest African village. What possibilities does technology present?
      Raymond Chimhandamba, Handas Consulting 04.05.19

    • Africa’s Changing Retail Space and the Implications for the Diaper Category

      At the end of 2015, 16 countries in the world, 15 of which were sub-Saharan, had more mobile bank accounts than traditional bank accounts
      Raymond Chimhandamba, Handas Consulting, Johannesburg, South Africa 03.15.19

    • The Top 5 Indicators of Quality for Baby Diapers

      The Top 5 Indicators of Quality for Baby Diapers

      Lessons from low income consumers.
      Raymond Chimhandamba, Handas Consulting, Johannesburg, South Africa 02.08.19

    Trending
    • Precision Textiles Offers Biodegradable Medical Fabric
    • Northshore Launches Megamax Briefs In New Colors
    • European Nonwovens Production Exceeds 3 Million Tons
    • Fitesa Develops Antiviral Line
    • Aplix Expands In France
    Breaking News
    • Precision Textiles Offers Biodegradable Medical Fabric
    • Northshore Launches Megamax Briefs in New Colors
    • Essity Acquires Distribution Rights to Sorbact in Australia and New Zealand
    • Metrex Launches CaviWipe 2.0 Surface Disinfectant Wipes
    • Aplix Expands in France
    View Breaking News >
    CURRENT ISSUE

    Household and Personal Care Wipes Spring 2021

    • A Conversation with the Responsible Flushing Alliance
    • Nice-Pak Meets Consumer Demands
    • Wipes Manufacturers Meet Demand Surge
    • Home Care Wipes: Sustainability in Sharper Focus as Cleaning Frenzy Simmers Following Pandemic
    • View More >



    Cookies help us to provide you with an excellent service. By using our website, you declare yourself in agreement with our use of cookies.
    You can obtain detailed information about the use of cookies on our website by clicking on "More information”.

    • About Us
    • Privacy Policy
    • Terms And Conditions
    • Contact Us

    follow us

    Subscribe
    Nutraceuticals World

    Latest Breaking News From Nutraceuticals World

    Kyowa Hakko Launches Heat-Treated Probiotic Strain for Eye Health
    CGA-7 Green Coffee Extract by Vidya Herbs Achieves Self-Affirmed GRAS Status
    Nutritional Complex Evidenced to Reduce Preterm Birth
    Coatings World

    Latest Breaking News From Coatings World

    Barentz Expands Canadian CASE Team
    Shepherd Color Company Opens Sales Office in China
    Chromaflo Technologies Awarded Gold Status CSR Rating by EcoVadis in EMEA
    Medical Product Outsourcing

    Latest Breaking News From Medical Product Outsourcing

    CMS Establishes New Payment for Pelvalon’s Eclipse System
    Varian, Google Cloud Partner to Bring Convenience to Cancer Therapy
    Resonetics Leases New Manufacturing Space in Costa Rica
    Contract Pharma

    Latest Breaking News From Contract Pharma

    Frontage Expands Capabilities at its Clinical Site in Secaucus, NJ
    Ascendia Pharmaceuticals Poised for Expansion
    Bora Pharmaceuticals Adds Roller Compaction Capabilities
    Beauty Packaging

    Latest Breaking News From Beauty Packaging

    Revlon Unveils New Fragrances Featuring Megan Thee Stallion & Sofia Carson
    Henkel Management Board Welcomes Wolfgang König
    Mielle Organics Gets a Major Investment
    Happi

    Latest Breaking News From Happi

    Nature’s Beauty Debuts Vegan Natural Body Care at Walgreens
    Estée Lauder Expands Beautiful Fragrance Collection
    What You’re Reading on Happi.com
    Ink World

    Latest Breaking News From Ink World

    SE-DA Invests in Kornit Presto S
    Kumon North America Adds Speedmaster XL 106 from Heidelberg
    Iron Oxide Pigments Market to Register 4.7% CAGR from 2021 to 2028: GVR
    Label & Narrow Web

    Latest Breaking News From Label & Narrow Web

    Dantex elevates Joseph Sanchez to digital business development manager
    Mactac's Kevin Clunie joins TLMI panel
    MacDermid announces two new global sales roles
    Nonwovens Industry

    Latest Breaking News From Nonwovens Industry

    Precision Textiles Offers Biodegradable Medical Fabric
    Northshore Launches Megamax Briefs in New Colors
    Essity Acquires Distribution Rights to Sorbact in Australia and New Zealand
    Orthopedic Design & Technology

    Latest Breaking News From Orthopedic Design & Technology

    New Biosealant Could Stabilize Cartilage, Boost Healing After Injury
    Google Executive Joins SeaSpine's Board of Directors
    HSS and LimaCorporate Open Provider-Based 3D Design and Printing Facility
    Printed Electronics Now

    Latest Breaking News From Printed Electronics Now

    Tive Multi-sensor Tracker Solo 5G Relies on Sensirion SHT33
    VTT in 2020: Successful Year Despite Globally Challenging Times
    Lux Research: 3D Printing Market to Reach $51 Billion in 2030

    Copyright © 2021 Rodman Media. All rights reserved. Use of this constitutes acceptance of our privacy policy The material on this site may not be reproduced, distributed, transmitted, or otherwise used, except with the prior written permission of Rodman Media.

    AD BLOCKER DETECTED

    Our website is made possible by displaying online advertisements to our visitors.
    Please consider supporting us by disabling your ad blocker.


    FREE SUBSCRIPTION Already a subscriber? Login