Tapping into personal care products’ export potential

18 Sep, 2022 - 00:09 0 Views
Tapping into personal care products’ export potential

The Sunday Mail

Trade Focus
Allan Majuru

Globally, consumers are becoming more conscious about their health and well-being than ever before.

This trend is driven by consumers’ desire to use natural and organic products they feel have more benefits to their skin, do not have long-term health effects and are less harmful to the environment.

As the world begins to look at natural personal care and beauty products as the in-thing, Zimbabwean businesses are exploring emerging markets, riding on available resources.

Zimbabwe is endowed with indigenous plants and trees whose by-products such as organic oils are highly sought after in the cosmetics sector on both the international and domestic markets.

Today, a growing number of manufacturers in the cosmetics and pharmaceuticals sector are using these organic oils as active ingredients in the production of medical products for dermatological disorders.

Marula, ximenia, moringa, tea tree, aloe, avocado and eembeke oils, among others, are popular in Zimbabwe.

All these organic oils are used as active ingredients in the manufacture of various cosmetics products.

To tap into the potential of theseAC natural products, President Mnangagwa’s Government is making efforts to ensure local producers add value to local resources, resulting in high-end products that fetch more on the international market.

For example, following the identification of Mwenezi as a potential regional hub for marula products, President Mnangagwa commissioned a marula/mapfura processing and value-addition factory in Rutenga. This is a landmark and game-changing investment that has put the area on the cusp of industrialisation.

The plant is expected to rake in nearly US$400 million seasonally from marula/mapfura processing and value addition when operating at full capacity.

Undoubtedly, some of the products from the plant, including oils, have a ready market internationally, and proceeds from the exports will improve the livelihoods of local communities.

Marula/mapfura is one example of the many naturally growing plants found across the country that have been identified as a potential game changer for Zimbabwe’s exportation of essential oils, as well as personal care and beauty products.

To increase capacities around these products, ZimTrade, the national trade development and promotion organisation, is developing export clusters across the provinces, which will help organise producers and improve the quantities and quality of their export offerings.

In keeping with Government’s devolution programme, the export clusters currently under development are expected to increase personal care and beauty product exports at district and provincial level.

Global markets

The global market for personal care and beauty products has been on an upward trend over the past few years and is projected to continue growing.

According to a report by the Grand Review Research, the global market size for beauty and personal care products is expected to reach US$937,1 billion by 2030.

The report notes that natural and organic substitutes are gaining traction among a sizeable segment of consumers, driven by rising consumer awareness on the harmful effects of chemicals on the skin.

Industry trends show that people are now shifting towards beauty products that do not have long-term effects and are manufactured using natural and organic materials.

This has led to increased use of new active ingredients, including natural products with a defined and specific biological effect.

The shift towards natural products has seen an increase in demand for essential oils, which are produced from plant sources such as flowers, fruits, herbs, resins and wood.

According to Trade Map, the global import value of essential oils and resinoids, perfumery, as well as cosmetic or toilet preparations has been growing over the past five years from around US$128 billion to US$168 billion in 2021.

Top markets are found in China, United States of America, Hong Kong, Germany, France, United Kingdom, Singapore and Netherlands. Of this figure, the global import value of plant-based essential oils has grown from US$5,4 billion in 2017 to US$5,8 billion in 2021.

Top importing markets for plant-based essential oils that offer opportunities for Zimbabwean businesses include France, Germany, China, United Kingdom and Netherlands.

AC The import value of beauty or makeup preparations for skin care has also grown from US$48,8 billion in 2017 to US$74,3 billion in 2021.

In addition, the global import value for preparations for use on hair have been growing over the past five years, from US$13,8 billion in 2017 to US$16,3 billion in 2021.

Countries such as China, Germany, United Kingdom and Netherlands are among the top importers of products that Zimbabwean companies can provide.

Growing local capacity

Trade data shows that Zimbabwe’s essential oil exports have been growing over the past decade, although the country still has a negative trade balance in trading in the same products.

Naturally, as women are often more inclined to personal care and beauty products, there is need for a deliberate approach to capacitate women-led businesses in the sector.  The cosmetics sector value chain in most countries relies on women, who participate in production, manufacturing, marketing and sales.

This means easier wins could be achieved if capacity-building interventions are provided to women-led enterprises, which, in turn, will increase their participation in the economy, drive trade and create new jobs.

Financiers also need to come up with solutions that allow small businesses to access capital at favourable terms, as some small enterprises might not have collateral.

As personal care and beauty products are available in a wide range, businesses also need to capitalise on niche areas where they can enjoy competitive and comparative advantage.

Here, businesses can ride on, for example, natural products available in abundance in their communities and unique production techniques and product qualities that can differentiate their offerings from those of competitors.

For local producers who are riding on organic and other healthy selling points, there is need to invest in research and development so that they can effectively communicate the benefits of their products.

Here, producers need to identify specific components in their products, what health benefits they have and why consumers should be interested.

Investing in e-commerce will also allow local producers to reach consumers across the world.

As most producers in the country are small businesses, they normally do not have capacity to stock their products in major retail stores in international markets.

They can, however, make use of digital platforms to market their products and ship them when transactions are made.

Allan Majuru is ZimTrade’s CEO.


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