Chinese Securities Firms Turn Bullish on Africa’s Diaper and Personal Care Sector

(Yicai) Dec. 23 -- Chinese securities firms, including Citic Securities and Sinolink Securities, have released research reports expressing optimism about the long-term growth potential of Africa’s personal care industry.The bullish outlook is driven by favorable demographics, low penetration rates, and a clear trend toward consumption upgrades across the region. According to Sinolink Securities, Africa’s personal care market reached USD3.8 billion last year and is expected to exceed USD5.5 billion in 2029, before expanding further to more than USD10 billion in the long run, citing data from Frost Sullivan.Sinolink Securities attributed the expected growth to three main factors. First, Africa enjoys a significant demographic dividend, with East and West Africa together home to about one billion people, an average age of just 18, and a birth rate of around 4 percent. Second, penetration rates for key products remain low, with baby diapers and sanitary napkins reaching only about 20 percent and 30 percent of consumers, respectively, far below the 70 percent to 90 percent seen in mature markets in Europe and the US. Third, consumption upgrading is becoming increasingly evident.In terms of the competitive landscape, Sinolink Securities noted that international giants are mainly concentrated in relatively developed markets such as South Africa, while Chinese companies have rapidly gained ground in East and West Africa by leveraging cost-performance advantages. It cited Softcare as an example, noting that the company’s diapers sell for about 9 to 20 US cents per piece, significantly cheaper than those of Procter & Gamble, which are priced at 18 to 25 US cents. Data from last year showed that Softcare ranked first in market share by unit sales for both diapers and sanitary napkins, at 20.3 percent and 15.6 percent, respectively, but placed second by sales value.Citic Securities emphasized that deep localization is key to the success of Chinese companies in Africa. On the production side, it said firms need to flexibly build factories locally to avoid high tariffs and logistics costs. According to Sinolink Securities, as of April 2025, Softcare had established eight factories and 51 production lines across eight African countries, with local employees accounting for 97 percent of its workforce and a distribution network covering more than 2,800 dealers at various levels. Citic Securities said leading Chinese companies with an “integration of industry and trade” advantage are well positioned to benefit from the sector’s growth.Softcare was listed in Hong Kong in November, raising HKD2.4 billion (USD306.2 million), with its share price rising more than 30 percent on its first trading day. The company reported operating revenue of USD334 million and net profit of USD96 million in the first three quarters of last year, representing a net profit margin of 21.5 percent.Zheshang Securities also urged investors to pay attention to opportunities in the sector, saying it is optimistic about the development prospects of leading Chinese infant care companies such as Haoyue Personal Care.Editor: Emmi Laine