Nigeria’s child-bearing couples are reaping the benefits of fierce competition among diaper manufacturing companies, which is crashing prices and introducing affordable smaller sales units.
The United Nations Children Emergency Fund put annual childbirth in Nigeria at 5.9 million. By the time you finish reading this article, about 35 newborns would have been added to Nigeria’s population, swelling the baby diapers market size by another 35.
Some baby diapers, nappies and pants brands in Nigeria are subsidiaries of some multinationals such as Procter and Gamble, P&G (makers of various pamper brands, like Pampers, Pampers Baby dry, Swaddlers sensitive and cruisers dry) and Hayat Kimya (makers of Molfix) as well as Wemy Nigeria Limited, manufacturers of Dr. Brown, Huggies, produced by Huggies Nigeria and other fringe players like Cuddsies diaper, produced by Rainbow Fame Industries, RFI, Taiwan, imported into the country, Tourjour among others.
Competition in Nigeria diaper market is spurring innovation among retailers who now break down units to a level where consumers buy three diapers for N150. This is putting pressure on market leaders like Pampers, Huggies and Hayat, but they have no plans to compromise on quality in response to competitive strategies of fringe players in the market.
Fringe brands have broken into the market with smaller units, where consumers buy three pieces of diaper for N120, which is resold by roadside store owners for N150, while those of leading brands are sold N100 for a single diaper (N300 for the three units).
“This is indeed a positive development because it will make diapers more affordable and accessible to more people” Loise Ogbonna, a mother of two told BusinessDay.
According to Euromonitor, a market intelligence firm, nappies, diapers pants in Nigeria saw volume growth of 6 percent and current value growth of 16 percent in 2015. While this growth is driven by the increase in urban populations (who are more likely to use such products than rural residents), the increase in women in formal working environments, and a growing baby population, growth in 2015 was also supported by marketing activities and the increased visibility of a wide range of brands.
From only one dominant brand about 15 years ago (Pampers), there are now numerous brands on offer in Nigeria. Sales of nappies, diapers, pants in Nigeria are also very low in per capita terms, with a usage of only 60 units per child per year compared to 1, 204 in North America and 959 in Western Europe. This means it is a developing category with strong growth prospects.
Nappies, diapers, and pants are expected to see a strong performance in value terms over the next 10 years with a compound annual growth rate (CAGR) of 7 percent at constant 2016 prices. Growth in the baby population, as well as in the middle-income population, and rising brand awareness will help drive growth over the forecast period.
In volume terms, nappies, diapers, pants are expected to grow at a CAGR of 7 percent, to reach 2,070 million units by 2020. If the infrastructure supporting local production is improved, particularly the electricity supply, and if import tariffs are not lowered to favour imported brands, local players will be much more capable of competing and providing lower-priced and better-quality products, helping to improve competition and demand.
Baby product businesses in Nigeria in general and the baby diapers market are booming because both birth and fertility rates in Africa’s most populous nation are rising rapidly at 35 per 1000 live birth per annum.
Growing awareness regarding baby’s health and novel products resulting from technological advances are other critical factors that are presumed to positively impact the baby diaper market over the next decade. Increasing working women ratio is another key factor that is expected to aid the market over the next seven years.
‘Birth rate’ refers to the number of live births in an area (like Nigeria) for every 1,000 people in a year and ‘fertility rate’ is the average number of children born to one woman over the course of her life, both figures are high Nigeria. The average birth rate in sub-Saharan Africa currently stands at 35 babies per 1, 000 Africans. This figure approaches 25 million babies born every year in Africa of these, 24 percent are born in Nigeria.
STEPHEN ONYEKWELU
