Although the COVID-19 pandemic has caused a severe setback in consumer spending in Africa, data shows that historically, sub-Saharan Africa has been in a much better economic standing than before COVID-19. Consumer spending in 1981 was $145.64 billion, whereas in 2021 it was over $1.2 trillion. This is a stark difference. Overall, there has been a 3.9% compound annual growth rate (CAGR) in consumer expenditure in Africa since 2010 and this momentum shows no signs of stopping. An industry that is exploiting the enormous market potential of 1.7 billion people is Africa’s beauty industry. The market growth in the industry is estimated to be $1.26 billion between 2020 and 2025, with a CAGR of 2%.
Africa’s Burgeoning Youth and Urbanization
High fertility rates coupled with lower mortality rates have led to Africa having the world’s youngest population. About 70% of sub-Saharan Africa’s population is less than 30 years old. Beauty and personal care products are favored by a younger demographic, who want to invest in fashion trends and their looks. This gives Africa the perfect leverage to boost its beauty and cosmetics industry.
It is estimated that by 2025, 45% of Africa’s population will be living in urban areas. According to McKinsey & Company, “per capita consumption spending in large cities in Africa is on average 79% higher at the city level than at the national level.”
Furthermore, as the country continues to develop, there is a shift from spending in informal markets (e.g., roadside stalls) to spending in more formal sectors, such as department stores, supermarkets, etc, according to Brookings. This is boosting beauty product sales.
Higher Purchasing Power
Over the last three decades, Africa’s middle class has tripled in size. By 2025, roughly 65% of African households will be earning more than $5,000, according to McKinsey & Company.
The increase in the number of people in the “discretionary spending income bracket” is likely to result in consumers increasing their spending on luxury items. This shift may also be due to a growing sense of personal hygiene among people and realizing the significant role that products such as soap, shampoo, etc. play in it. Africa’s beauty industry may help customers to realize and fulfill their body care goals.
It is no surprise that Africa’s beauty industry mainly caters to and is dominated by women. Greater access to education and high-paying jobs have increased the disposable income of African women. According to Beauty Africa, “…a significant chunk of [their] spending goes to the beauty and personal care products.”
Growth of E-Commerce
The GSM Association projects that by 2025, 615 million sub-Saharan Africans will subscribe to mobile services, 28% will have a 4G connection and 3% will have a 5G connection.
This will allow consumers to make electronic payments. In fact, mobile money “is growing five times faster in Africa than in any other region,” according to McKinsey & Company.
The evolution of e-commerce and fintech has made purchasing beauty products faster and easier. Additionally, technological advancements allow companies to better track market trends and profile customers, according to The Exchange.
Key Market Players
Nigeria’s beauty industry is attracting foreign direct investment because of its growing modern, fashion-conscious, female population. Her Imports, a U.S.-based hair-extension company, opened an outlet in Lagos, Nigeria in 2014. Patrick Terry, the CEO, said that their products were “performing sensationally in Africa,” according to Africa Business Pages.
According to The Guardian, the projected income for Her Imports from Africa “topped $100 million.”
South Africa is also a key market player. Between 2020-2025, it is expected that 53% of the market growth in Africa’s beauty industry will come from South Africa.
Many international companies are only now realizing Africa’s untapped potential. On May 27, 2022, global pop star Rihanna launched her beauty line, Fenty, in “South Africa, Botswana, Ghana, Kenya, Namibia, Nigeria, Zambia and Zimbabwe.” The launch of this premium brand comes as great news for African women who wanted a better representation of their skin tones.
Infrastructure and Poverty Alleviation Projects Helping
Infrastructure helps connect supply-demand chains, allows goods and services to move easily across borders and enhances overall efficiency in the production and consumption system. Improved infrastructure in the beauty and personal care industry not only generates more employment but also hikes up the sector’s growth rate, according to The Exchange. This increase in growth in turn attracts more investments for additional upgrades in infrastructure. This forms a continuous cycle that ultimately boosts the economic growth of Africa’s beauty industry.
Poverty alleviation projects could help people climb to the middle-income group and have greater purchasing power. Also, closing the gender gap and providing more women with education and equal opportunities could help them to earn income and spend it on the beauty and cosmetics market.
More private investment, advanced technology, improved infrastructure and greater contributions to poverty alleviation projects could help expand Africa’s beauty industry while keeping in line with United Nations Sustainable Development Goals and the African Union’s Agenda 2063.
– Anushka Raychaudhuri
Soles4Souls was founded in 2006 and is based in Nashville, Tennessee. It is a global nonprofit organization dedicated to providing clothing and shoes for the poor. It works in collaboration with local and global partners in the distribution of clothing and shoes, and provides micro-enterprise programs by creating jobs in disadvantaged communities.
Soles4Souls collaborates with various community partners, supporting them through organizational resources. Community partners include homeless shelters receiving shoe donations, women’s shelters receiving business wear donations and inner city hospitals receiving clothing donations. Collection and circulation of wearable donations, as well as providing micro-enterprise programs, are the organization’s focus.
There are two methods of collection that Soles4Souls utilizes. It provides clothing and shoes that are discontinued, floor models, non-marketable overstocks and returns from retailers in the United States and other countries. It also provides clothing and shoes that are collected from individuals, educational centers, faith-based organizations and other corporate partners.
Upon being collected, the items are shipped to designated micro-enterprise businesses in different countries. The organization then contracts with private and nonprofit organizations to provide business resources as support. These methods introduce additional streams of income, and the overall objective is to create self-sustaining opportunities in poor communities.
This initiation of micro-enterprise activities adheres to the Millennium Development Goals in terms of eradicating poverty. On the United Nation’s website, the goal outlines the ability to “achieve full and productive employment and decent work for all, including women and young people.”
Creating micro-enterprise programs in poor communities is a main focus of Soles4Souls. It believes these programs are key components for the social movement to promote social change. It aims to assist communities by providing sustainable jobs to impoverished people through business start-up opportunities. Soles4Souls states, “The concept itself is simple, an embodiment of the old saying, ‘Give a man a fish, he will eat for a day; give him a way to fish, and he will eat for a lifetime.'”
Additional areas of interest include responding to natural disasters and orphanages by providing clothing and shoes. Soles4Souls has a “ready-inventory” in order to provide resources to disaster areas. In recent years, it has sent inventory to Hurricane Katrina victims. Orphanages in Central and South America, including Haiti, Costa Rica, Honduras, Guatemala and Tanzania, receive recurring resources in order to help with school uniforms and other essentials.
Soles4Souls aims to impact the 1 billion children who lack basic necessities like shoes and running water.
– Erika Wright
Sources: Soles4Souls, UN
Sometime the desire to help others is smothered by the strain of life. Work, bills and other obligations can quickly pile up until any offer of assistance is impossible to carry out. But what if you could help others just by living? Here are three super ways to give something back and get some chores done at the same time.
1. Update Your Wardrobe
Cleaning out your closet can be tedious work, but it can also be therapeutic. Experts say that organization can improve a person’s mental and emotional state. Will Edwards, founder of White Dove Books, explains that organization has been proven to lower stress, boost motivation and save someone valuable time and energy. De-cluttering your wardrobe can help de-clutter your mind. Anything that hasn’t been worn in the last six months should be pulled. “Placeholder items” waste valuable closet space. Put unused clothes to use by donating to a local shelter or donating funds from a yard sale to your favorite cause.
For those needing to add to their wardrobe, online retailers offer weekly sales. Some sites, like Amazon, allow shoppers to donate a percentage of their purchase amount to their favorite charity. Beginning at their favorite charity website, donors locate the Amazon link and shop to their hearts’ delight. After checkout, a certain percentage is sent to the selected organization.
Need to compare different retailers? Some search engines donate change for each internet search generated.
2. Clean Out Your Pantry
Have a pantry full of staples that never seem to get used? Clean it out and donate non-perishables to the nearest food bank or volunteer your time. Fall and winter are the busiest times for charities and any assistance is appreciated. For those lacking the time, there are other ways to help others.
Non-governmental organizations worldwide have committed to providing food relief to developing nations. They recognize that people cannot focus on stimulating the economy if they go to bed hungry. Groups like Food for Life provide food relief for millions of impoverished people on a daily basis and donations are readily accepted.
3. Put On Some Music
When the stress of cleaning gets to be too much, turn on some music. It has been reported that music can greatly reduce stress and even reduce pain. Be sure to take a break and buy a new cd or check out a concert. But taking a break from chores does not mean that you can’t give back.
In recent years, musicians have redirected global focus to the plight of the world’s poor. Every genre has at least one song about poverty and recent collaborations have generated an explosion of music relief efforts. Organizations such as Music For Relief have raised over $5 million since 2004 and music providers like iTunes have designed a variety of apps to assist non-profits in fundraising.
– Jasmine D. Smith
Sources: Amazon, Ezine, Food for Life, Huffington Post, iTunes
Photo: All Posters
Although it goes against the conventional wisdom of globalized business, a new business model looks to spend more money, not less, on its employees. Fostered by celebrity activist Matt Damon and led by Rob Broggi, a hedge fund analyst, Industrial Revolution II (IRII) sets its sights on evolving the clothing world into an industry with a conscience.
Previously working for Raptor Capital and Tudor Investment Corporation (one of the top hedge funds in the world), Broggi vaulted himself into an industry that combines garment manufacturing with humanitarian mindfulness.
Creating its first garment factory in Haiti, Industrial Revolution II plans to improve workers’ standard of living in a variety of ways. First, IRII pledges to invest 50% of its profits into health and education programs within the local community. On top of that, IRII will treat its workers humanely and provide safe work conditions.
Opposed to the current model of manufacturers focused on the cheapest labor possible to increase production at the most profitable rate, IRII sees both a niche and room for improvement.
What makes Broggi’s endeavor revolutionary in comparison to clothing competitors is his attention to his employees’ wellness.
IRII believes this improvement in health and working conditions will increase workers’ capabilities and production. When it’s all said and done, IRII anticipates its sales to be as competitive, in both price and quality, with other major brands.
What makes Broggi and Damon confident in IRII’s model is their focus on social purpose. With humane conditions, they believe that if they attain competitiveness their benevolent work will tip them over the edge in shoppers’ eyes. “If you can offer the same quality product at the same price you are going to win a tie-breaker nine out of 10 times” IRII’s CEO said.
That’s assuming it can compete with the businesses now dependent on child workers, cheap labor, and terrible conditions to continue their cost effectiveness.
According to Broggi, increased quality of life and improvements to health and education programs will enhance his workers’ productivity and lower turnover rates. With lower turnover rates, IRII can invest more in training its workforce, which promotes greater quality clothing.
Damon and Broggi believe that healthy and better trained workers with an incentive in the company’s profits will jump-start productivity and increase the quality of products, giving the major labels, quite literally, a run for their money.
With history and ethics on their side, Damon, Broggi, and their new founded workers hope to lead the garment industry as a new model to reduce poverty and increase profits. If successful, they may pull millions out of severe poverty.
– Michael Carney
Sources: Boston Common, Industrial Revolution II
Photo: Heritage Daily
How is it possible that your old clothes could be hurting Africa and its economy and you may not even know about it? The answer is not so simple.
Often times when Western countries have used, unwanted clothes they cannot get rid of, they end up a landfill. More recently though, charities that collect used clothes in North American and European nations can sell them to wholesalers who package and re-sell them to other countries, particularly those in Africa. Instead of decaying in a landfill, these clothes are desirable and affordable for people in lower-income countries.
“What’s the problem with that?” you may be asking yourself.
In the short-term it could be a win-win situation. People can donate their old clothes to charities, charities can sell them to earn revenue, third-party wholesalers can re-sell them to other countries, people in Africa have access to affordable, well-made clothing, and everyone’s happy. In the long-term, though, the African clothing manufacturers may not be so happy. If African countries continue to rely on Westerners giving away their old clothes, they may not be able to support their own clothing businesses within their borders. In fact, several Africa clothing industries have already gone out of business because of the cheap clothing coming in from other countries, which cuts jobs, decreases revenue, and increases reliance on Western nations.
So what can be done about this problem?
Some African countries are banning imported second-hand clothing to try to rebuild their own clothing businesses. But even with the ban on Western clothing, there is still access to hand-me-downs from other areas of the world – particularly China and the Far East, where clothing is even cheaper. Sylvia Owori, a clothing designer in Uganda, realizes the problem but is forced to accept reality. “As much as I don’t like second-hand clothes to be in the market, I don’t have an alternative,” she says. “I cannot make enough clothes to support a population of 33 million.”
– Katie Brockman