The increase in newborn numbers in Africa has caught the attention of various business ventures, and among them stands out the couple Shen Yanchang and Yang Yanjuan, who have carved a remarkable niche in the market with their company, Sen Da GroupTheir story unfolds against a backdrop of emerging markets as they have established a significant presence in Africa, particularly in the baby diaper segment, generating an impressive annual revenue that surpasses 30 billion yuan.
Shen and Yang’s journey began in 2000 when they set their sights on the burgeoning markets of AfricaWith keen foresight, everything about their strategy hinted at an ambitious goal: capturing the lucrative opportunities in hygiene productsBy around 2016, Shen expanded into ceramics manufacturing in Africa through a partnership with Keda Manufacturing, investing hundreds of millions into the ventureThis decision marked the beginning of a dual strategy focused on both hygiene and ceramic products tailored to meet local market demandsFast forward a few years, and their brand, Leshush, became synonymous with baby diapers in regions where birth rates have soared rapidly.
Leshush focuses primarily on producing baby diapers, training pants, sanitary napkins, and wet wipes, showcasing a wide range of personal care productsBy concentrating on regions such as Africa, Latin America, and Central Asia, Leshush has tailored its business operations to meet local needsAccording to their own reports, over 98.2% of their revenue in the first three quarters of 2024 derived from the African market alone, a testament to their focused investment strategy.
Statistically, 2023 was a landmark year for the brand, with total sales of diapers reaching approximately 3.714 billion pieces, which translated into an astounding revenue of around 324 million USD, constituting a staggering 78.7% of the company’s operational income for that yearOther product lines, such as sanitary products and wet wipes, contributed to the brand as well but were relatively lesser in influence on overall sales.
The company's rapid ascendance in the African market is no mere coincidence
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Since its establishment in 2009, Leshush has consistently targeted hygiene products, allowing it to establish a robust channel over the yearsCiting statistics from Frost & Sullivan's reports, Leshush now ranks first in both the baby diaper and sanitary napkin markets in Africa, holding approximately 20% and 14% market shares, respectivelyThis dominance extends notable traction in countries like Ghana, Kenya, Cameroon, and Tanzania, moving Leshush into the ranks of significant market players.
Leshush's reputation in the market has drawn parallels to Transsion Holdings, often dubbed the "King of Mobile Phones in Africa." The fast-moving consumer goods sector regards Leshush as the "Transsion of hygiene products," given their similar growth trajectoryBy employing localization tactics like establishing overseas manufacturing plants, Leshush has accelerated its presence in the African market substantially; for instance, in 2018, they initiated local production facilities in Ghana that encompassed various hygiene products.
As of September 30, 2024, Leshush operates eight production facilities across Africa, boasting an impressive designed annual capacity of 5.578 billion baby diapers and additional lines for training pants, sanitary napkins, and wipesThe strategic move to a Hong Kong listing and the subsequent fundraising aims to further enhance production capacities and support marketing efforts across Africa and Latin America while facilitating strategic acquisitions in the hygiene sector.
The brand umbrella of Leshush comprises several key names, including Softcare, Veesper, Maya, Cuettie, and Clincleer, primarily focusing on sanitary solution productsThe Softcare brand, positioned as a mid to high-end brand, has expanded over time from diaper sales into a more extensive product rangeNotably, the demand surge in the newborn demographic in Africa, which has experienced the highest compound growth rate globally from 2019 to 2023, has been vital for Leshush’s revenue mobilization
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They reported revenues peaking at 320 million USD in 2022, climbing to 410 million USD in 2023, followed by impressive figures in early 2024.
These financial milestones signify an annual revenue range of approximately 30 billion yuan, placing Leshush in a favorable middle to upper tier among domestic A-share companies linked to maternal and baby productsEarly market entry allowed Leshush to establish a strong local manufacturing presence, translating into favorable pricing strategies that made their diaper prices among the lowest in the African market at just 0.087 USD per piece, in stark contrast to competitors like Procter & Gamble, whose products average around 0.12 USD.
Even with a volume-driven sales model, Leshush’s proprietary brand management has successfully elevated profit margins in recent yearsMargins grew to 23% in 2022, skipping to 34.9% and 35.4% in subsequent years, supported by a reduction in raw material costs and minimized currency lossThe impressive financial results owe much to their understanding of the local market dynamics that have allowed them to capitalize on favorable conditions.
Behind this commercial success stands Shen Yanchang’s multifaceted approach to businessAs the founder of Sen Da Group, which commenced operations in 2000 in Guangzhou, Shen has steered the group through various industrial sectors, from international trade to manufacturing and investments in diverse fields like ceramics, hygiene products, and personal care itemsThis strategic evolution traces back to the international trade in hygiene products that began with Leshush’s establishment.
A significant part of Shen and Yang’s strategy also involves their collaborative ventures with Keda ManufacturingInitially focused on building materials machinery, the duo expanded aggressively into the ceramics sector, meeting the infrastructure demands of developing countries in AfricaBy establishing joint ventures throughout several African nations, Shen ensured that Sen Da Group capitalized on the synergy brought by its partnership with Keda, marking their position further through local production and export dynamics.
Their early investments laid a robust foundation and allowed for substantial capital inflows into projects across Africa, such as the construction of ceramic production lines in Senegal and Zambia, with considerable venture sums
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