How will the diaper market develop in the future?
In the consumption habits of baby diapers, China has different characteristics from developed countries. For example, many families mix diapers with traditional cotton diapers, or use them only at night or when they go out. This directly leads to a lower per capita use of baby diapers in China. It is low, only about 3.2 tablets/day, while the average usage in Japan is 4.9 tablets/day, and the average usage in developed countries in Europe and America is 5.6 tablets/day.
This consumption characteristic is related to the tradition of frugality of the Chinese people and the ethical culture in which many old people are willing to help take care of the third generation and use washable diapers. In recent years, this consumption habit has changed from the original 3/day to 3.2/day, and the average usage of some first- and second-tier cities has reached 6/day or more, especially in the newborn period ( 0~3 months). With the expansion of the sales network of diaper manufacturers, affordable mid- to low-end diapers will surely have a significant substitution effect on existing diapers; secondly, with the increase in the proportion of parents after 80, the business is still in its infancy. At the stage, the work pressure is tight, and the cleaning of traditional cotton diapers is relatively troublesome. Disposable diapers have become the best alternative.
Global average daily use of baby diapers
Per capita GDP growth, increase diaper sales to improve the structure of high-end products. Consumers' consumption and quality demand for disposable diapers are affected by factors such as consumption habits and customs in different countries and regions. However, in countries and regions of the same cultural region, per capita consumption and quality requirements for baby diapers are basically equal to the per capita GDP of the country. Positively related. This correlation stems from the evolution of consumer demand and spending power: When the economy is in an underdeveloped period, the people's spending power is insufficient, and most people are only willing to buy the lowest necessary consumption at a low price; when the per capita GDP rises, people are healthy. The demands of life have generally increased, and are willing and able to afford higher-end baby diaper products. This has led to a rapid increase in per capita consumption of baby diapers as per capita GDP has risen, while the proportion of high-end products has continued to expand.
The rapid growth of new-born population and policy factors jointly support the development of diapers. Since the founding of New China, the three obvious birth peaks that China has experienced have appeared in 1949-1955, 1962-1986, and 1985-1990 respectively. According to the legal marriage age and social reality in China, the population born at the third peak of birth from 1985 should enter the childbearing age from 2010 to 2015.
Policy factors support the development of diapers
With the implementation of the second-child policy and the economic development, the demand for diapers has increased. The separate two-child policy was gradually implemented across the country in 2014. 2015 was the second year after the policy was fully implemented. However, according to the data released by the National Bureau of Statistics, the total number of births in 2015 was 16.55 million, a decrease of 32% from 2014. Million. Not only did the number of births not continue to rise but decreased slightly. This was due to the large decrease in the number of women in the fertile period, which led to a decrease in the birth rate of one child and a drop in the number of births in our country. According to the data analysis, in the total number of births in 2015, one child had a birth loss of about 850,000, and second childbirth increased about 450,000. It is predicted that the birth population will continue to decline for the whole of 2016 and 2017 will see growth, which will help baby diapers consumption. According to estimates of researchers of the Institute of Population and Labor Economics and Institute of Sociology of the Chinese Academy of Social Sciences, after the full release of the second child, there will be an additional 7.5 million newborns in China in 2015-2019. At the same time, the penetration rate of Chinese diapers in urban areas is 92%, but it is still less than 10% in rural areas. It can be predicted that the market potential of China's baby diapers will gradually expand.
Market competition is fierce, foreign companies grab half of the country
In 2015, industry data showed that the sales volume of diapers was nearly 30 billion yuan. There were more than 600 manufacturers, more than 2,000 diapers production lines, and more than 1600 brands competed for this market. Among them, the top six domestic and foreign brands accounted for about 80% of the total. . Pampers accounted for about 26%, curiosity accounted for about 19%, mommy baby accounted for about 12%, Kao accounted for about 10%, Hengan accounted for about 8%, King accounted for about 4%. The remaining 20% of the market share is dominated by many domestic brands and new foreign brands. There are more than 1,500 brands competing for the 6 billion market, while the domestic brands ranked in the top 10 also account for about 50% of the remaining 20% of the market capacity – the competition is fierce for brands with new brands or weak market operations. And cruelty can be seen here. In 2015, China's imported diapers accounted for more than 20% of the domestic market's consumption. Under the impact of imported products, domestic diaper companies face no small challenge.
Decline in import tariffs exacerbates competition among domestic diaper companies
The Ministry of Finance issued a notice that starting June 1, 2015, China will reduce the import tariff rates on certain consumer goods such as clothing, footwear, skin care products, and diapers, with an average reduction of more than 50%. The import duty on diapers has been reduced from 7.5% to 2%, which means that the price will be reduced, which will affect the current diaper market. Since the quality of foreign diapers is superior to that of domestic diapers, the market share of domestic diapers will be squeezed when the price of imported diapers falls. Domestic diaper companies are facing severe challenges.
Different manufacturers' development strategies
In order to compete for market share, size manufacturers have adopted different development strategies based on their own conditions. 1) The big manufacturers rely on strong R&D strength, continuously upgrade the technology and products, use patents as their core competitiveness, and promote the development of diaper products. 2) Small and medium-sized companies often take market dominance and seizure of shares as the first goal, and few companies have patented technology. With their capital advantages, technological strengths, and market expansion, big manufacturers gradually clear out the backward manufacturers from the market and further expand their market share.
Small and medium-sized manufacturers lack the competitiveness of core technologies, and the entry barriers in low-end and middle-end markets are low, local competition is fierce, and the living environment is not optimistic. The trend of two-level differentiation in the baby diaper market will become even more pronounced: In developed regions, competition will mainly occur among large manufacturers. Competition will focus on branding, new product development and popularization, and meet people’s demands for upgrading. In economically underdeveloped regions, on the one hand, large manufacturers will continue to sink sales channels by extending the product chain and developing inexpensive baby diapers. This will squeeze the share of small and medium-sized manufacturers. On the other hand, local small and medium-sized manufacturers will make full use of local products. The established regional awareness will deepen production, supply and marketing, and seek opportunities to expand a broader sales network.
The traditional channels of diapers have not disappeared and there is still room for survival
For the traditional channels, diaper manufacturers generally set up regional offices to carry out unified shipments, distribute them through first-level and second-tier dealers, and finally sell to consumers through terminal outlets such as small supermarkets and grocery stores. Therefore, the price increase link during the period mainly includes three aspects: dealers, second batch of merchants, and terminal sales. According to the survey, the final mark-up rates for various links in the traditional channels are between 80% and 100%.