Baby and Child-Specific Products in Argentina

PROSPECTS

Sharp contraction in consumption in the second half of the year

Usually, sales of baby and child-specific products do not feel the impact of an economic crisis, as in such circumstances parents prefer to cut other types of spending, but will try to maintain expenditure focused on their children. However, the crisis of 2018 was the worst of the review period, with a sharp increase in unemployment and a sharp contraction in real wages.

Promotions and discounts to soften the fall in sales

Sales of baby and child-specific products saw growth until July 2018, but in that month the trend was reversed in the face of the currency crisis. To try to soften the fall in sales, companies carried out a large number of promotions and discounts in supermarket and hypermarket chains such as Coto and Carrefour, as well as in drugstores/parapharmacies, such as Farmacity.

Farmacity ruling could result in distribution changes

At the end of 2018, the Farmacity chain initiated a lawsuit against the Province of Buenos Aires, given that the current legislation regarding pharmacies does not allow it to open premises because it is a limited company. In the event that the ruling is favourable for Farmacity, the opening of numerous stores is expected throughout the province of Buenos Aires, both by this chain and by other smaller ones.

COMPETITIVE LANDSCAPE

Unilever gains ground thanks to the launch of Dove Baby

Unilever de Argentina was the best performing company over the review period, thanks to the launch of Dove Baby – an extension of its renowned Dove brand – at the end of 2016. This relatively new brand is present in a large number of products, such as baby wipes, baby and child-specific hair care, and baby and child-specific toiletries.

Domestic companies are largely absent

A notable characteristic of baby and child-specific products is the negligible participation of domestic companies. With a few exceptions, such as Algodonera Avellaneda SA, the category is largely dominated by multinational companies.

In 2019, economy brands will have an advantage

The economic crisis has not yet come to an end, and it is expected that the contraction of the economy will be accentuated in 2019. This will continue to impact sales of baby and child-specific products during at least the first half of the year.

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