Could you introduce UNIDO’s work in the cosmetics industry and some of the key projects you are working on right now?
UNIDO is the specialized agency of the United Nations with a unique mandate to promote and accelerate sustainable industrial development. We work with our Member States to ensure globalization is fair and creates opportunities for all.
A key trend in the cosmetics industry has been the shift towards natural and organic ingredients. This presents a tremendous opportunity for developing countries where the natural ingredients of most of these products come from.
Some countries are already exporting large amounts of natural ingredients used in cosmetics. However, these are exported as raw materials, with minimal value addition. This is where UNIDO comes in, working on processing and transforming the ingredients, so that new businesses flourish and jobs are created.
For example, in Ghana, UNIDO targets the value addition of shea-based products. Shea butter is a versatile ingredient that has a wide range of applications in the cosmetics industry. UNIDO brings producers and enterprises together to manage common challenges and build shared opportunities, helping them make competitive cosmetic products that comply with international standards.
Similarly, in Colombia, UNIDO has focused on building infrastructure to ensure product quality. Colombian cosmetics manufacturers and suppliers can now get their products tested in laboratories to check they meet international standards and thus access international markets.
In Morocco and Tunisia, UNIDO has helped producers of argan oil and prickly pear seed oil to comply with quality and origin labels. These natural oils are in high demand for their anti-aging properties, and quality and origin labels give consumers confidence, making these producers more competitive in global markets.
How is UNIDO supporting the cosmetics industry in Africa to become better connected to the international markets?
UNIDO's efforts in supporting the cosmetic industry in Africa strongly focus on market demand. And the market wants quality, safety and sustainability. For this reason, UNIDO is working on product quality, ensuring compliance with international standards, and developing business clusters.
We also encourage cosmetic companies to adopt environmentally friendly production practices and ethical sourcing of ingredients. For example, in South Africa we are actively involved in preserving biodiversity and improving the production processes for essential oils by helping meet standards and involving local communities through female entrepreneurs.
How is the proliferation of digital and emerging technologies impacting the industry in up and coming markets?
New technologies can improve operational efficiency, product innovation and sustainability efforts.
The evolution of e-commerce and fintech is making the purchasing of cosmetic products faster and easier. Technological advancements also allow companies to better track market trends and to profile customers. At the same time, customers can much more easily check on the origin and quality of products.
Cosmetics companies in emerging markets must adapt to and embrace digital transformation to remain competitive and meet the changing needs of their customers. UNIDO supports this transition towards a more traceable and sustainable cosmetics sector by introducing innovative processes in supported companies, including promoting the use of blockchain and other new technologies.
What are the key trends in Africa’s cosmetics industry?
About 70% of sub-Saharan Africa’s population is less than 30 years old. Over the last three decades, Africa’s middle class has tripled in size. The combination of these two factors means that consumers are likely to increase their spending on luxury items and that there will be a growing market for cosmetics in Africa.
The big international cosmetics companies are already positioning themselves to supply this new market, and therefore there is great potential for the producers of ingredients for cosmetics in African countries.
Investment is needed and, for producers, it is important to be aware that investors are increasingly considering environmental, social and governance (ESG) issues as part of their financial analysis when deciding which companies to invest in. Companies along the cosmetics supply chain need to ensure sustainable sourcing and fair labour practices, assess their carbon footprint and reduce the amount of resources used in production and packaging.
We also see that while large international brands still hold a significant portion of the market share in Africa, new consumer trends may favour local producers. Smaller manufacturers and brands in Africa can be more flexible and more aware of demand for products that address local tastes. Local brands are already filling a gap in the African market for hair and skincare products not provided by the international companies. The advent of the African Continental Free Trade Area is creating the conditions where African cosmetics companies can supply African customers.
