Nappies/Diapers/Pants in China

PROSPECTS

The two-child policy underpins steady growth, yet it falls short of expectations

Nappies/diapers/pants continued to see steady current value growth in 2018, thanks to the execution of the two-child policy since 2016, in addition to rising disposable incomes and rising hygiene standards amongst local consumers. The frequent change of nappies and trading-up to better-quality products also drove the steady growth rate in 2018.

Disposable pants records the most dynamic value growth, from a smaller base

From a much smaller base, disposable pants recorded the most robust current value growth in 2018, supported by consumers’ rising household incomes, as disposable pants usually have an average unit price 25% higher than nappies/diapers in China. On the other hand, the faster pace of life, especially in higher-tier cities, gave rise to the use of disposable pants, which are more convenient to change than nappies/diapers, and can also provide more comfort for active babies.

Buoyant e-commerce boosts sales

E-commerce is registering vigorous development in China, which has also boosted online sales of nappies/diapers/pants. Premium nappies/diapers brands made in Japan, such as Moony from Shanghai Uni-Charm, are able to shine in the domestic market, thanks to cross-border e-commerce.

COMPETITIVE LANDSCAPE

Multinational players take the absolute lead in the category

Multinational players hold the absolute lead in nappies/diapers/pants in China, occupying the top four positions in value terms in 2018. The established reputation of international brands caters to local parents’ rising demand for quality products, especially urban young parents in higher-tier cities.

Competition from domestic brands

In spite of their leading positions, multinational players are facing rising competition from domestic producers, with some leading international manufacturers suffering value share losses in the review period. More domestic players, led by Hengan Fujian Holding, have strengthened their product development and enhanced their product quality.

Increasingly fierce competition leads to price cuts

The competition in nappies/diapers/pants is increasingly fierce, with multinational and leading domestic players concentrating more on top-tier cities and small- and mid-sized manufacturers on lower-tier cities and rural areas. Besides product innovation, price cuts are also used to attract consumers, especially in online stores, where various discount vouchers are released, almost year-round, to encourage consumers to purchase.

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