Competitor Strategies in Tissue and Hygiene

December 2023

Tissue and hygiene players face a challenging environment of tighter consumer spending. Volume declines and softness are recurring themes that are forcing market players to reassess their priorities. Those banking on premiumisation, the blurring wellness trend, digitalisation, inclusivity and sustainability, while diversifying their business portfolios with adjacencies and efficiency in mind, will be best positioned in such a volatile environment.

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Key Findings

Leading multinationals continue ceding share to smaller players over market proximity and agility

While the top global players remain in the lead with established brand equity, their dominance is gradually challenged by more agile regional and local players in especially fragmented developing APAC and MEA markets. Such competition has accelerated top players’ geographical expansion, portfolio segmentation and cross-industry diversification.

Supply chain resilience a linchpin to competitiveness

Supply-demand imbalance, worsened by global events such as the war in Ukraine and China’s restrictions under its zero-COVID policy, continues weighing on businesses’ supply chains and balance sheets, accelerating investment in supply chain resilience, especially through manufacturing localisation, supplier diversification and automation.

Tangible and trustworthy health benefits, when well communicated, lead value creation

As consumers take a more simplified yet deliberately conscious approach to personal care, companies are increasingly focused on value creation by harnessing the power of tangible functional benefits in product development and brand communications.

Holistic positioning and digitalisation strengthen value creation

The growing consumer awareness of personal wellness that encompasses skin, body and mind has accelerated value creation through holistic positioning and digitalisation in especially the retail hygiene industry, with the former bringing consumers more self-care options across adjacent need states and the latter providing a more individualised shopping and care experience.

Sustainability initiatives delivering tangible results top of agenda

Growing consumer demand for purposeful living and environmental stewardship will continue shaping competitive strategy. To align key sustainability objectives with consumers’ value perception and businesses’ financial agenda, companies are increasingly focused on green features communicating visible and tangible consequences.

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Scope
Key findings
Companies at a glance
Most top players grapple with share stagnation or declines despite sales increase
Essentiality of daily-use self-care products help generate market momentum
Top players diversify across portfolios, while Hengan takes a concentrated approach
While P&G maintains leadership, Empresas and Daio Paper gain in active category shares
Developing markets continue to drive growth, yet at a slowing pace
Daio seeks cost-efficient entry into developing world via partnerships, M&A and localisation
Hayat solidifies in MEA region via local production buys while building SEA hub in Vietnam
Margin decline forces Essity’s review of Vinda ownership, putting its APAC sales in question
Consolidation in Latin America foretells rise of local players Empresas CMPC and Suzano
Local rivals and private label drive market fragmentation most notably in tissue
China’s Babycare capitalises on pan-category approach and the thin core/zero-feel trend
Narrowing quality gap plus value sustain private label’s foothold in developed regions
Essity cedes shares to private label in core WE markets, reassessing business composition
E-commerce and overall market share mismatch signifies online under-representation
Private label further attracts consumers across Western Europe with sustainability initiatives
Pricing advantage has supported private label’s share gains in toilet paper
Multi-category approach within adjacency supports long-term business resilience
Lingering macro challenges confront companies with an uphill battle for value creation
P&G: Occasion penetration and cost efficiency support leadership in largest US market
K-C: Overnight care and skin health drive innovation pipeline across markets
Essity: Incontinence releases emphasise anti-irritation sensitive skin care
Companies step further into the digital space
Procter & Gamble and Kimberly-Clark continue making gains in e-commerce
Social commerce in China as an incubator for small, local brands fast-tracking breakthroughs
Daio Paper: Destigmatisation through no-hide packaging and celebrity partnership
Essity: Away-from-home release and gamified education address period poverty and taboo
Products with sustainable attributes account for 40% of Kimberly-Clark’s sales in 2022
Varied perceptions of health lead to a broad wellness, lifestyle positioning
Unicharm and Essity expand hygiene offerings with tech-infused fertility testing, therapeutics
Local players in Asia introduce disposable facial cloths segment, followed by multinationals
Transforming women’s health: Intimate hygiene as a dynamic pillar
Investment themes in intimate hygiene are downstream from dominant industry trends
Sustainability and APAC expansion themes lead M&A activities targeting intimate hygiene
Leakproof functional apparel has dominated intimate hygiene corporate acquisitions
Areas to watch within intimate hygiene M&A
Exploring further synergies between intimate hygiene and adjacencies
Key takeaways

Tissue and Hygiene

This is the aggregation of retail and away-from home tissue and disposable hygiene products as well as Rx/reimbursement adult incontinence.

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