Analysis of the diaper market

Analysis of the diaper market Baby diaper market has been growing at a nominal rate for some time now. Declining birth rates in the developed world has adversely affected the diaper manufacturers’ ability to expand their businesses. As per data provided by Euromonitor International, birth rates among the developed nations have declined by almost 20% during the last 30 years and are now only half the global average. The global market for diapers was worth $22.2 billion, a 2.9% increase YOY. However, the major markets of Western Europe, the U.S. and Japan posted nominal decline. As a result, companies like Procter & Gamble and Kimberly Clark are relying more on innovation to their rescue. This has also been a major contributor of success for P&G in the past few years. The new found focus is the developing country markets, from which 40% of global diaper revenue is derived. Markets such as China and Russia are providing brands with excellent opportunities for longer term growth. It is also worthwhile to noti ce the trend in the developed markets towards greener products as shown in the chart below Diaper Market in Developing Country There is huge growth potential for these products in emerging markets such as China, Brazil and India, as these markets are still quite underdeveloped and new. For example, China is world’s most rapidly developing nation. While it has taken developed Western economies some time to realise the environmental price of their development this is not the case for today’s emerging nations. In this case even the global recession will enable China to have more time to better make arrangements for considering more sustainable and greener options for its growth. Middle-class consumers are at the forefront of environmental awareness as the environmental consequences of rapid industrialisation and urbanisation in countries such as China and India are becoming increasingly apparent Also in countries such as India, the Philippines and Malaysia, levels of cons umer awareness regarding hygiene products are very still very low. Indian Diaper Market In 2009, manufacturers have been now more focused on more categories such as disposable nappies/diapers. With the increasing buying power of Indian consumers, companies are looking for options which are more convenient and safe to use for the children. Increase in awareness about hygiene is a big factor for thus development. Some of the major development last year is as follows: Procter & Gamble Hygiene & Health Care Ltd introduced Pampers Magic Nickers Kimberly-Clark Lever Ltd introduced Huggies New Born, a product specifically targeting the mothers of new born babies. With increasing awareness regarding the advantages of using the use of disposable nappies/diapers over cloth substitutes, Indian parents are now spending more on purchasing such products which in turn led to an increase in sales value for the manufacturers. Convenience has been one of the driving factors in this change. Even in ti er 2 towns and cities, parents are willing to spend money on disposable nappies/diapers to use when the baby is taken out of the home, for added convenience. Also as babies get older, some young mothers look to go back to work. This encouraged the use of nappies/diapers, as they are more convenient, and they do not need to spend time washing cloth nappies. Also, as babies become more active, and nappies are a more comfortable and hygienic alternative to cloth nappies. However currently the majority of the sales is restricted to customers in urban India. So the penetration rate of disposable nappies/diapers has been increasing, as more young parents are finding it convenient to switch from cloth nappies to disposable nappies.