MALDE: Step up war on fakes to make Kenya global cosmetics hub

Since the Austrian scholar Joseph Schumpeter identified innovation as a disruptive economic force over six decades ago, the concept has acquired great significance in business.

Firms globally have since embraced innovation as the cornerstone of their competition strategy. With consumers becoming more demanding and sophisticated, innovation has truly become the paramount differentiator between businesses.

Innovation can be simply defined as new ideas or creative ways of doing things and conducting business. Talking innovation is however the easy part; leveraging its influence to keep up with ever-changing consumer demands and expectations requires hard work. Innovation has emerged as a key parameter in the personal care and beauty industry where consumer expectations are in constant flux.

The global personal care industry, estimated to hit $650 billion (Sh65 trillion) by 2024, continues to experience the disruptive force of innovation. Be it cosmetics, skincare products, detergents and fragrances, the influence of mutating consumer preferences is being felt across the industry.

Estimated at about Sh100 billion in 2015, Kenya’s personal care market is not an exception to the emerging global trends. The local market is becoming crowded with new entrants. Consumers are now spoilt for choice given that most personal care products come with colourful packaging and many different fragrances. This has spawned a whole new level of sophistication. Consequently, the barriers to entry into the business have risen as focus shifts to innovating beyond the functional needs of the consumer.

The shift is also being driven by the burgeoning youth market whose needs are completely different from those of the traditional consumer. Also, most products are now available through e-commerce channels, targeting youthful consumers. Image-conscious youth are now spending more on personal care products.

Another market trend worth noting is that consumers are now paying more attention to products that meet their health and fitness aspirations. As consumers become more aware of the health aspects of ingredients used in making products, there will be greater demand for products with natural components. Innovation to meet this demand dynamic will work at two levels namely, natural production of ingredients, and partnerships with local producers.

At Pwani Oils, we are particularly keen on making products and partnerships that drive this approach to innovation and meeting consumer demand for quality products that meet their functional, aesthetic and health needs. We are exploring ways to support local production of natural ingredients like aloe vera and neem as part of our agenda to sustainably grow our personal care business value chain.

Counterfeits, however, continue to pose a major challenge. Personal care is a lucrative business thus prone to counterfeiting. To grow the local market, the government needs to rein in rogue importers of products that are craftily packaged to resemble those of genuine manufacturers using fake wrappers and bottles.

Most of these counterfeits in fact do not conform to international and local quality and health standards and thus harm consumers.

Coupled with the fact that Kenya has emerged as the regional manufacturing hub, local innovation in the sector deserves support with the right mix of policy and incentives. Counterfeits should also be eliminated from the market.

Global personal care and beauty brands have seen the immense opportunity in the domestic and regional market. As a result, many international brands are eyeing the local market, evidence that the local consumer has come of age. Local manufacturers, Pwani Oils included, are ramping up their game to meet the growing demand.

This is precisely the reason why we should support indigenous firms that have over the years built a solid manufacturing base in this niche and created thousands of jobs while contributing significantly to Kenya’s economic growth. In doing so, we will be making positive progress toward making Kenya a global personal care manufacturing hub and realizing the Big Four Agenda pillar on job creation.

RAJUL MALDE, Commercial director, Pwani Oils.