Baby and Child-Specific Products in Brazil

2021 DEVELOPMENTS

Sanitary concerns continue to influence purchases of baby and child-specific products

Brazil was one of the countries hit hardest by COVID-19, with a peak in cases at the beginning of 2021. The federal government did not coordinate a response, so each state government acted independently.

Conservatism marks sales in uncertain scenario as brands try to remain relevant

2021 continued to be marked by uncertainty and challenging macroeconomic indicators. Higher production costs, exchange rate instability, mounting inflation and high unemployment rates eroded Brazilians’ purchasing power, which led to more conservative consumption patterns.

Licensing and segmentation as strategies to add value to increasingly competitive landscape

The unfavourable scenario posed by Brazilians’ decreasing purchasing power and fertility rate challenges has encouraged players to invest in further innovation to attract and retain customers and consequently gain share. Although the leading players have shown stability in terms of position throughout the years since 2017, new brands are emerging, with manufacturers launching their own lines and expanding their portfolios by targeting children in different age groups.

PROSPECTS AND OPPORTUNITIES

Physical stores to remain as consumers’ preferred destination, while warehouse clubs increasingly penetrate category

During the pandemic, players showed flexibility and adapted to e-commerce solutions to maintain sales. Consumers also benefited from finding the best purchasing opportunities online, with this channel retaining higher sales in 2021 compared to pre-pandemic levels.

Baby showers and gifting: Cultural habits can contribute to category’s resilience

Although data from national statistics show that the fertility rate in Brazil is dropping, more people are born than die in the country, with Brazil only expected to reach its population peak in 2047. The arrival of an expected baby is usually cause for celebration, and is often accompanied by friends and family organising “baby showers” for expectant parents, whereby guests offer gifts and presents for the baby’s care.

Product claims and social responsibility to retain relevance

Safety and functionality are likely to remain as key concerns when purchasing baby and child-specific products, as parents seek to reduce the risk of allergies, rashes or exposure to chemicals. Quality attributes such as hypoallergenic, tear-free, and tested by paediatricians or dermatologically tested will remain relevant, especially for parents of new-born babies.