Baby and Child-Specific Products in Hungary

2021 DEVELOPMENTS

Baby and child-specific sun care is the best performing category

After having posted the steepest declines in 2020, baby and child-specific sun care was the most dynamic performer within baby and child-specific products in volume and current value growth terms in 2021. Its impressive turnaround was largely attributable to an increase in domestic tourism, with continued uncertainty surrounding international travel bans and vaccine passports prompting many Hungarians to holiday at home instead of taking trips aboard.

Products with hypoallergenic and free-from formulas increasingly favoured

In keeping with the shift witnessed across beauty and personal care, in 2021 Hungarians continued to show a growing preference for baby and child-specific products that are made with natural, hypoallergenic ingredients and free from potentially harmful chemicals such as parabens and sulphates. Indeed, this trend remained stronger in this category than in many areas of the market, as parents inevitability prioritise the wellbeing of their children and are therefore more willing to pay the higher prices such health-oriented products typically command than they would be if buying for themselves.

Value share of e-commerce continues to rise

The value share of e-commerce in baby and child-specific products rose substantially in 2020 due to consumer concerns about exposure to COVID-19 in brick-and-mortar stores. The channel recorded another healthy gain in 2021 even as fear of the virus began to recede with the rollout of vaccines, as many Hungarians have recently developed a greater appreciation for the convenience, wider selection of choices and potential for more competitive price offers afforded by online shopping.

PROSPECTS AND OPPORTUNITIES

Government initiatives to boost birth rates will help to drive demand

Baby and child-specific products looks set to perform well throughout the forecast period, with total volume and current value sales expected to grow steadily and all categories projected to register consistently positive results in both respects. While the overall potential for expansion will be tempered by declining birth rates in Hungary, government-backed financial incentives intended to slow and ultimately reverse this demographic trend – such as the Babaváró Hitel childbirth loan or the CSOK family housing subsidy – should help to boost demand by improving purchasing power among parents with young children.

Private label penetration expected to continue rising

The overall aggregate value share held by private label in baby and child-specific products is expected to continue rising during the forecast period. With many Hungarians likely to remain highly budget-conscious in the short-to-medium term due to the negative economic impact of COVID-19 and the recent spike in inflation, further gains will be underpinned by the greater affordability of these products as compared to branded competitors.

Demand for products with a natural positioning set to remain buoyant

Baby and child specific products that are made with natural ingredients – including organic varieties – and contain fewer or no harsh chemicals such as parabens and sulphates will continue to gain popularity over the forecast period. Rising health-consciousness will remain the primary driver of demand for such products, though they will also benefit from growing concerns about environmental sustainability among consumers.