Nappies/Diapers/Pants in China

PROSPECTS

Potential for growth despite falling number of newborns

Nappies/diapers/pants saw growth slow in both value and volume terms in 2019. Having seen a temporary rebound in 2016 immediately following the replacement of the one-child policy with a two-child policy, the number of newborns fell annually in the latter part of the review period, including a marked decline in 2018.

Disposable pants grows strongly from low base

From a much lower base than other categories, disposable pants registered strong double-digit growth in both value and volume terms in 2019. Disposable pants generally commands significantly higher unit prices than other nappies/diapers/pants categories, which acts as a notable obstacle to the category’s expansion.

E-commerce continues to gain share

E-commerce overtook supermarkets to become the largest distribution channel for nappies/diapers/pants in 2016 and continued to make significant gains in value share in 2019. As well as business-to-consumer (B2C) activities, consumer-to-consumer (C2C) sales on WeChat, led by a few brands such as Care Daily and Solove/Miffy, are also taking share from store-based channels.

COMPETITIVE LANDSCAPE

Most leading brands struggle, though some premium labels buck trend

Procter & Gamble’s market-leading Pampers brand saw modest value growth in 2019, while most other leading brands, with a few notable exceptions, experienced decline. Pampers continued to recover from a slump in the middle of the review period thanks to the performance of its premium import line, Ichiban.

High-end local brands see strong growth

The combined sales of brands outside the top 17 grew strongly in the final year of the review period, driven by the dynamism of a few premium local brands, which are owned and managed by Chinese manufacturers but not necessarily positioned as local brands. Strong performers included Lelch, Dodie, and Babycare, which offer high-quality products and managed to gain in popularity largely through word-of-mouth.

Innovation in disposable pants

Several major brands looked to take advantage of the growing demand for disposable pants with the launch of new products at the end of the review period. Huggies, Goo.

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