Momentum continues in Chinese sanitary protection market

Author: Adrian Atterby

Date published: 11 Aug 2007

Despite growth slowing marginally in 2006, China is expected to be catalyst for global growth through to 2011

Value growth in 2006 across the entire product sector stood at 7%, as a result of increasing product penetration in rural areas and manufacturers encouraging more affluent women from urban areas to trade up to higher value products.

Continued improvement in production technology has lowered the costs of ultra-thin towels, which are more popular with consumers, driving growth at the expense of standard variants. Consumer education through varied and frequent marketing activity has ensured that consumers purchase the right product to meet their requirements; improving customers' satisfaction levels.

Premium distribution channels for premium products

The growth of chemists/drugstores (such as Watson's) has been the key driver in boosting sales of high-end towels. Kimberly-Clark re-launched its Kotex products during 2006, and a vast proportion of Kotex products are sold through this channel. Consumers are more likely to choose premium products through this channel, and less likely to purchase Kotex in supermarkets/hypermarkets where other varieties of less-expensive brands are present.

Pantyliners also saw rapid growth in 2006 largely due to the increasing awareness of personal hygiene, together with product innovations such as ultra-softness and herbal attributes. Pantyliners with aloe vera essence were the latest introduction during the review period.

Sales of tampons saw limited growth of less than 5%. Although Johnson & Johnson, the dominant player in the category, has paid much attention to consumer education, sales of tampons continued to be hindered by cultural beliefs, including the perception of tampons as invasive and associated with the loss of virginity.

Rural expansion becoming ever more important

As women in rural areas continue to shift from using traditional cloth materials to towels during menstruation, major manufacturers are likely to place more effort on expansion in these regions. More economy ranges are expected to be launched targeted at the more price-sensitive end of the market and in less-developed areas, to boost volume sales.

Leading manufacturers are likely to acquire volume shares from small local players through offering low-price products in rural areas. Due to ever-increasing production costs, many small players are likely to suffer, while the top players, capitalising on economies of scale, will be able to further consolidate their positions by increased product segmentation.

These factors will result in average annual growth of 5% during to 2011, and will see US$1.16 billion added to the size of the market. Although the majority of this growth will come from the ultra-thin towels with wings category, pantyliners will actually see the highest levels of growth at 7%, expanding the market by US$156 million.

Adrian Atterby; Industry Analyst Disposable Paper Products: adrian.atterby@euromonitor.com