Growing population, rising demand for oral care enlarge market for toothpastes
Growing up on the Mainland of Lagos in the early 1980s, Bola lived with her parents and grandparents in a three bedroom apartment. She recalls that her grandparents preferred to use the ‘chewing stick’ to clean their teeth and would have nothing to do with the foreign methods of oral hygiene adopted by Bola’s educated, middle class parents. Bola’s mother introduced the family to the Macleans toothpaste brand.
Thirty years later, a middle class parent herself, Bola lives in a four bedroom bungalow on the Island with her ageing mother, who constantly needs dental care. Of the many life and hygiene lessons she learnt from her mother, Bola has steadfastly brushed her teeth twice a day and continually used one form of mouthwash or the other. She has changed brands of toothpaste from McLeans to Close-Up, to Oral-B and now to Sensodyne. Her brand loyalty unlike her mother’s is determined by complex factors such as price, quality, durability, availability, advertising and brand perception.
This generational change in toothpaste brand loyalty in Bola’s family represents a growing opportunity and an intensifying competition in the oral hygiene and care market. Euromonitor’s report of this burgeoning industry shows that the oral care market in 2015 in Nigeria witnessed a positive performance at a current retail value growth of 11 percent, the fastest growing segment of all beauty and personal care categories during the year.
This remarkable growth of the segment is attributed to the growth seen in the population of Africa’s most populous nation, resulting in new consumer groups becoming more interested in the category. Despite the economic crisis which continued to plague Nigeria in 2015 and carried over into the 2016 recession with slowed GDP growth, oral care products would generally be considered as quite essential and would continue to see strong growth rates.
Competition landscape
A random survey of consumers shows that Procter & Gamble (P&G)’s Oral-B, is gaining popularity among the middle class despite Unilever Close-up’s dominant market position. Euromonitor had in 2015 estimated Close-Up’s share of the oral care market at around 23 percent retail value.
Close-up was first introduced into the Nigerian market four decades ago and with demand driven by sustained advertising support and strong consumer loyalty due to its long-standing presence in the country. It takes full advantage of its robust and wide distribution network to expand sales; it also offers numerous different flavours under the Close-Up Toothpaste brand, which offers consumers wider choice, thereby systematically keeping them loyal to the brand.
Oral-B a later entrant into Nigeria’s oral care market launched in 2011 but seems to have been grappling with rampant counterfeiting which has also posed a challenge to its older and more established rival, Close-up, some years ago.
In recent time Close-up’s strong consumer loyalty has come under severe threat because like Bola above, consumers now have a variety of alternatives from which to choose and the factors driving this unsteady brand loyalty are: price, quality, durability, availability, advertising and brand perception. In addition there is a new generation of consumers for whom Close Up’s early entry into the market means little.
For instance, 21 year old Chukwunonso Okoye, a student of chemical engineering grew up in a home with parents who were loyal to Close-Up but in school, his friends are loyal to Oral-B and others to Sensodyne. This was not the case in the 1980s and early 1990s when you either used Close-Up or Macleans.
“Well, I am very health conscious and pay attention to the ingredients used by various toothpaste brands. The ingredients used, price, durability and accessibility among other factors influence my choice of toothpaste not inherited family loyalty” Okoye said.
Competition in the oral care market is heating up with each toothpaste brand fighting to keep and grow its market share by introducing innovative products to market to match the offer of competition. For instance Close-Up recently introduced an herbal based toothpaste brand because Dabur toothpaste brand was encroaching into its market share with its herbal toothpaste, which was perceived as medicinal by some customers.
On prospects for the oral care market segment, Euromonitor estimates there will be positive performance in Nigeria, with a compound annual growth rate (CAGR) of 2 percent anticipated at constant 2015 prices. With the current inflation rate at 18.3 prices may have spiked but the market fundamentals remain strong.
The need for proper oral hygiene, the growing population and consistent marketing activities by producers are expected to drive sales in the category. Spurred by prospects of rising incomes, especially young adults and professionals, Nigerian consumers are expected to increasingly appreciate the benefits of the regular usage of oral care products, which is expected to help to boost growth in the category.
STEPHEN ONYEKWELU