Global Baby Nappies/Diapers/Pants Update: Industry Potential and Consumer Preferences

July 2020

The category of baby nappies/diapers/pants sees positive growth globally, with increased usage in developing markets. Developed regions have seen a push for premium to improve value in the absence of organic growth. Performance in 2020 will be shaped by the extent of the economic fallout from the Coronavirus pandemic, with more focus on affordability. This report reveals key drivers behind category growth globally through 2024, consumer preferences across markets, and retail channel shifts.

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Key Findings

Large untapped potential but possibility for setback in pace of growth due to COVID-19

The category has a significant global untapped potential, mainly coming from developing markets. Stockpiling early 2020 led to a temporary spike in demand in the developed regions. However, the full impact of COVID-19 on the category will be determined by the extent of economic fallout from the pandemic and the pace of recovery. Affordability in products and innovation will likely take centre stage in the short to mid term. It is important to note that affordability does not equal cheap.

Consumer preferences vary across markets, with many focusing on functionality and price

In 2019, many nappy/diaper brands focused on the premium space, including natural ingredients. However, not all consumers are willing to pay more for premium features. It is important to understand consumer priorities in nappies/diapers and the features they are willing to spend on to tailor innovation, especially in the COVID-19-driven focus on cost efficiencies. For example, while natural features and softness appeal strongly to consumers in China, US parents prioritise leak protection and value.

Private label and exclusive brands to draw customer traffic and appeal to cost-conscious

Private label has gained a footing in the category over the years, and innovation and plans for expansion into private label continue in 2020. Consumers’ tendency to seek private label is expected to increase further in 2020, also supported by depressed incomes in the COVID-19 environment. In addition to private label developments, retailers are also turning to more partnerships to build exclusive brands across price segments to drive customer traffic.

Innovation and affordability boost demand in pants in developing markets

Pants remain on the agenda for the industry, with more products coming out in developed and developing regions. To support consumer demand among lower- income consumers, some brands have been introducing more affordable pants into the developing markets.

Scope
Key findings
Global long-term outlook optimistic with significant untapped potential
Potential lingering negative impact of COVID-19
Healthy long-term growth across MEA and Asian markets
Africa: lifestyle shifts and improved product access help demand
Alert as per capita reaching high levels in some developing markets
Rising per capita use reduces the impact of soft drivers in China
Tailoring innovation to preferred product features…
…and understanding consumer willingness to pay for those features
Case of China: natural, soft and high quality top of the mind
Case of the US: functionality and value top consumer agenda
Case of Brazil: high quality, leak protection and value for money lead
Retailers drive private label and exclusive brands to draw customers
Pants format: continuing growth globally
New affordable options emerge to aid adoption of pants
Unicharm enhances its mid- and premium range pants
Expansion in e-commerce further boosted by COVID-19
Unconventional platforms continue to rise
Facebook stands out in purchase related-activities
Subscription services tap into desire for tailored approach
Detecting the nuances of delivery services…
…and store-based shopping is still very much relevant
Strengthening omnichannel approach in mid to long term
COVID-19 impact: financial instability and category disruption
Our COVID-19 themes reflect shifting consumer behaviour
COVID-19 themes in nappies/diapers: re-evaluating brand value, channel shifts
Key takeaways (1): meet immediate and mid-term needs
Key takeaways (2): meeting long-term needs

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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