According to its IPO prospectus, Softcare was Africa’s top supplier of baby diapers and sanitary napkins by sales volume in 2023, with revenues of US$411 million.
by Zhu Yongling
A Chinese company that has quietly risen to dominate Africa’s diaper market is stepping into the spotlight.
Softcare Limited, a leading Chinese hygiene products manufacturer, plans to go public in Hong Kong to raise funds for production expansion, marketing, and acquisitions. According to its IPO prospectus, Softcare was Africa’s top supplier of baby diapers and sanitary napkins by sales volume in 2023, with revenues of US$411 million that year and US$334 million in the first nine months of 2024, reflecting annual growth rates of 29% and 7%.
Spun off from Sunda Group’s FMCG hygiene business, Softcare is headquartered in Dubai, with factories in eight African nations. Sunda Group, founded in 2004, began as an Africa-focused trading firm and has since expanded into manufacturing and investment. While reports suggest Sunda may list in Hong Kong, Softcare is the only company pursuing an IPO.
Softcare’s core business consists of baby diapers and sanitary napkins, which accounted for 75.3% and 17.4% of revenue, respectively, in the first nine months of 2024. The remaining sales came from baby pull-up pants and wet wipes. While over 98% of its sales come from Africa, Softcare has attempted to expand into Latin America and the Middle East but has yet to gain significant traction.
Emerging markets like Africa, Latin America, and the Middle East are seeing growing demand for hygiene products due to youthful populations, low product penetration, and rapid economic growth.
From 2019 to 2023, Africa’s baby diaper and sanitary napkin markets grew at a compound annual rate of 6.7%, outpacing China (2.2%) and Japan (0.6%). The sector is concentrated, with the top five players holding a 62.7% market share. Key competitors include Procter & Gamble (P&G) and Kimberly-Clark. The sanitary napkin segment is less consolidated, with the top five firms controlling 37.9% of the market.
Softcare, a relative newcomer, competes against industry giants like P&G and Kimberly-Clark, which have over a century of experience.
Softcare offers a diverse product range, including premium brands like Softcare and Veesper, mid-tier Maya, and budget-friendly Cuettie and Clincleer. Despite its mid-to-high-end positioning, Softcare remains more affordable than global competitors. In 2023, its diapers were priced at US$0.0927 per unit, compared to P&G’s US$0.1158 and Kimberly-Clark’s US$0.1138.
Local production lowers costs and enhances responsiveness. Softcare operates the most hygiene product factories in Africa, according to Frost & Sullivan. Distribution is another advantage, with over 95% of its revenue coming from wholesalers and distributors. The company does not impose minimum order requirements, making it easier for partners to join its network.
Softcare also benefits from Sunda Group’s backing. Among its top five suppliers, the second-largest is Sunda Group, which provides equipment, leases, IT services, and operational support. Sunda has expanded into African industries such as ceramics manufacturing in partnership with China’s Keda Manufacturing.
While Softcare dominates in sales volume, profitability remains a challenge. In 2022, 2023, and the first nine months of 2024, it reported gross profit margins of 23%, 34.9%, and 35.4%, respectively, with net margins of 5.7%, 15.7%, and 21.6%. Profitability has improved due to lower raw material costs, but the company remains vulnerable to price fluctuations. It expects material costs to stabilize in the coming years.
Softcare’s flexible distributor policies may impact partner retention. In 2024, it delisted 711 inactive wholesalers, leaving 1,965 active partners.
Despite its success, Softcare’s presence is concentrated in West and East Africa, with no major operations in North or South Africa—both high-growth potential markets. The company plans to expand into Latin America, Central Asia, North Africa, and South Africa.
