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What's Different About India's Nappies Market?

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Euromonitor estimates that India’s nappies/diapers/pants market to double and reach US$ 1.7 billion in 2023. This growth will be driven in part by time-pressed, convenience-seeking parents looking for an alternative to traditional cloth nappies. Additionally, discounts offered by the retailers will attract price-conscious Indian consumers. The internet further facilitates sales as consumers are more aware of the products available in the market and how to use them.

Favourable demographics aid further growth

In 2023, two in five babies aged zero to two years in the APAC region will be born in India –a huge potential target consumer base.

With more responsibility and lack of time, workings parents are expanding usage from only night time to during the day as well. Increased usage means increased sales, however, Indian consumers are known to be price sensitive. Though mindful of spending, they are more willing to spend on better products for their children.

According to Euromonitor Lifestyle Survey 2017, about one in five (19%) consumers are willing to pay when buying children’s products that are convenient to use. Increased disposable income also has a role to play. As the disposable income of Indian consumers grows, consumer spending on nappies/diapers/pants is expected to grow at CAGR 15% (2018-23).

Why are pants dominant in India?

Disposable pants have a higher market share in India than nappies/diapers in total sales. In fact, pants have a mammoth share of 90% in the category. The disproportionate share can be attributed to the convenience of use they offer in comparison to tape-style diapers. Additionally, the unit price of tape-style and pant style diapers are almost the same unlike in other countries where pant style are premium products. Consumers usually upgrade to disposable pants after using tape-style diapers.

Mamy Poko pants triggered growth in pant styles diapers

Pampers (P&G) and Mamy Poko (Unicharm) continued to be the two dominant brands in terms of value sales in 2018. Over the years, the category grew due to better availability of products courtesy distribution channels, affordability and marketing efforts of the top players.

Until 2012 brands like Pampers (P&G) and Huggies (Kimberly Clark) had decent distribution, but limited sales. The market gained momentum with the entry of Mamy Poko (Unicharm) in 2010, which launched disposable pants in India.

The initial offerings of Mamy Poko were priced relatively lower than tape style diapers. With their marketing efforts, they were able to establish a strong foothold. The growing popularity of disposable pants, due to the price point and convenience of use, caused other players to invest in this sub-category with competitive offerings. This saw the category grow with exponential growth in pants since 2014.

As a result, before the tape style diapers became prominent, pants outpaced them. In the category, the pants are priced at par with tape-style diapers. In 2018, the share of nappies/diapers and disposable pants in the category is 11% and 89% respectively. The growth will come primarily from pants and nappies/diapers will degrow.

Consumers shift towards internet retailing

The majority of consumers from smaller cities still prefer to buy smaller unit sizes from local stores and have less familiarity with eCommerce platforms. Store-based retailing remains the most preferred channel for consumers to purchase nappies/diaper/pants.

However, internet retailing is gaining popularity, especially among urban consumers. These consumers know the product and brand that suits their needs and prefer to buy bigger pack sizes online.

To carter to this group of consumers, the eCommerce retailers like Amazon, Firstcry and Flipkart offer massive discounts on diapers packs with the option of convenient home delivery. To compete against internet retailers, the modern grocery retailers, particularly supermarkets and hypermarkets, have been offering discounts and run promotions regularly to keep consumers engaged.

Internet penetration is expected to rise from 39% in 2018 to 89% in 2023. This paired with the convenience offered by eCommerce platforms in terms of savings, discounts, and delivery, online retailing sales for diapers/pants is expected to more than double to contribute 25% of the overall sales by 2023.

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