Nappies/diapers/pants - IndiaEuromonitor International : Category Briefing May 2011 ............ 5 Euromonitor International Page i ............................................ 2 Prospects ........................ 2 Category Data .................................................................................................................................................................. 1 Competitive Landscape ............................................................ 4 Table 5 Forecast Retail Sales of Nappies/Diapers/Pants by Category: Value 20102015 ............................................................................................................................................................................................................................................................... 3 Table 1 Retail Sales of Nappies/Diapers/Pants by Category: Value 2005-2010 ................. 1 Trends ............................................ 4 Table 6 Forecast Retail Sales of Nappies/Diapers/Pants by Category: % Value Growth 2010-2015............................... 3 Table 3 Nappies/Diapers/Pants Retail Company Shares 2006-2010 .......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................Nappies/Diapers/Pants India List of Contents and Tables Headlines ............................ 3 Table 2 Retail Sales of Nappies/Diapers/Pants by Category: % Value Growth 20052010 ........... 4 Table 4 Nappies/Diapers/Pants Retail Brand Shares 2007-2010 ........................ Indian families used cloth-based products to serve as washable nappies/diapers for babies and toddlers in the household. This was despite a much higher volume sales growth rate of 17% in the same period. junior nappies/diapers represented the fastest growing product category in 2010. Snuggy Dry (Godrej Consumer Products Ltd) and Baby Soft (Wipro Ltd) were involved in intense price competition during the year. The additional spend on such products is another discouraging factor that inhibits parents’ willingness to invest in them. Volume sales growth remained sturdy in 2010. Pampers. with the falling prices of such products and the increasing number of nuclear households in India. as leading brands such as Huggies. Disposable pants remains a highly niche product in India in 2010. Actively marketed brands such as Huggies Dri Fit (Kimberly-Clark) and Pampers (Procter & Gamble) have led to gradual acceptance of nappies/diapers as a useful baby care tool in India. The use of junior nappies/diapers is considered essential in cases where parents utilise day-care centres. value sales growth for nappies/diapers/pants in 2010 was lower than the review period CAGR of 15%. In India. Most rural as well as urban households still consider disposable nappies/diapers to be unhygienic and even unhealthy for the young child’s skin in the long run. The most noticeable unit price reduction was for new born nappies/diapers. potty training for children is done around the age of 2-3 years. Daily use of disposable nappies/diapers/pants was still very uncommon even in urban areas. This is also a primary reason for minimal sales of disposable pants in India. Pampers and the relatively new Mamy Poko Pants (Uni-Charm India Pvt Ltd) in the category. nappies/diapers saw healthy sales growth over the review period. shows rapid growth in 2010 Value sales of nappies/diapers/pants are expected to rise at a constant value CAGR of 13% over the forecast period TRENDS • Procter & Gamble Home Products Ltd continued its efforts to cut unit prices in order to garner volume share in 2010. Traditionally.Nappies/Diapers/Pants India NAPPIES/DIAPERS/PANTS IN INDIA HEADLINES • • • • • Nappies/diapers/pants value sales grow 12% to reach Rs5 billion in 2010 Value sales growth limited by decrease in unit prices Unit prices are lowered by several national manufacturers in 2010 Kimberly-Clark Lever Ltd continues to lead in terms of value share. In spite of the presence of national brands such as Huggies. it sees negligible sales due to the concept being new to the country. Godrej Consumer Products Ltd and Wipro Ltd over 2009 and 2010 were in fact much more severe compared to Procter & Gamble due to their initial higher unit prices in 2009. as manufacturers tried to spur volume growth in the smallest nappies/diapers category in 2010. which has to be washed repeatedly. The unit price reductions for competing players such as Kimberly-Clark Lever Ltd. Overall. However. Influenced by a drop in unit prices. With less than 1% of the age group having access to nappies/diapers. With current value sales growth of 13% in 2010. the category presents immense opportunity for growth over the forecast period. however Procter & Gamble Home Products Ltd. The low average age of potty training further reduces the target market for nappies/diapers/pants. • • • • • • • Euromonitor International Page 1 . The trend of cutting unit prices in order to make the product affordable to a wider consumer base led to suppressed value sales growth of 12% in 2010. The category is gaining popularity due to the tendency of employed couples to go back to full-time jobs after initial maternity leave. and may not rely on these to wash and replace cloth substitutes for nappies/diapers. ranked second. unit prices fell almost 5% in 2010. The penetration rate of nappies/diapers (percentage of 0-2 year olds using nappies/diapers) remains extremely low in India. as the convenience and disposability of such products prompted parents to use them in place of cloth. while regional brands such as Teddy (from Nobel Hygiene Pvt Ltd) and Koochees (from Hygiene Wear International Ltd) represented the economy segment. with a rise of four percentage points. The constant value CAGR for nappies/diapers/pants over the forecast period is expected to be higher than the corresponding rate for the review period. the company had an appreciable lead over second-placed Procter & Gamble Home Products Ltd. standard and economy price segments in 2010. Huggies Dri Fit and Pampers respectively. The opening up of new and small product categories such as • Euromonitor International Page 2 . Smaller brands included Snuggy Dry from Godrej Consumer Products Ltd. Given the low penetration of nappies/diapers/pants in India. the different size offerings under the brand Mamy Poko were still only sporadically present in retail outlets. most products from these national brands were positioned in the standard segment. Prices of nappies/diapers for all brands increase with product size. Two other international manufacturers. the brand did not have a significant impact on nationally established brands such as Huggies and Pampers. Wipro Ltd’s Baby Soft was positioned as a premium product. Uni-Charm India Pvt Ltd expanded its product portfolio to encompass standard and junior nappies/diapers. both Huggies and Pampers straddled premium. Primarily through their flagship brands. With Kimberly-Clark and Procter & Gamble both being international manufacturers. increased their presence across retail channels in 2009 and 2010. The company adopted an aggressive pricing strategy. they accounted for 84% of nappies/diapers/pants value sales in 2010. and the newly emerging brand Mamy Poko from Uni-Charm India Pvt Ltd. looking for continuous sales growth. as it looked to add to its presence in disposable pants over 2010. thus upsetting shares and competitor positioning in the absence of strong brand differentiation between national brands. national manufacturers focused on improving this situation rather than investing in green campaigns in 2010. Bella Premier Happy Hygiene Care Pvt Ltd and Uni-Charm India Pvt Ltd. Godrej Consumer Products Ltd was the biggest player in value terms as the company accounted for 7% of nappies/diapers/pants value sales in 2010. value sales for nappies/diapers/pants were dominated by international players in 2010. As the new generation of young working couples develops in urban India. in order to drive volume and value sales in 2010.Nappies/Diapers/Pants India COMPETITIVE LANDSCAPE • Kimberly-Clark Lever Ltd was the value sales leader for nappies/diapers/pants in 2010. Procter & Gamble Home Products Ltd was the largest gainer in terms of value share in 2010. Controlled unit prices on the part of manufacturers will further encourage consumers to opt for such product offerings instead of the cumbersome cloth alternatives. New entrant Uni-Charm India Pvt Ltd (brand Mamy Poko) also adopted aggressive television promotions as it occupied slots on most major networks to promote its brand and gain recognition for the same. • • • • • • • PROSPECTS • Penetration rates for nappies/diapers/pants are expected to increase drastically over the forecast period. However. The top two leading brands in India – Huggies and Pampers – were advertised heavily through television and print channels in 2010. Thus. Among domestic manufacturers. hence maintaining their dominance of the category. along with strategic television advertisements. National brand operators are also expected to pursue specific marketing campaigns to target tier-III cities and rural areas. There was no brand positioned as “green” and environmentally friendly in India. thus fuelling volume sales growth. Accounting for more than half of overall sales. the need for disposable nappies/diapers will heighten. International players invested heavily in expanding retail distribution and marketing campaigns throughout the review period. However. With many brand variants present in the retail environment. Pantaloon Retail India Ltd’s flagship brand Caremate was the fastest growing private label nappies/diapers brand in 2010. The Pampers brand was the first to cut prices in 2009 and 2010. Chained chemists/pharmacies such as Apollo Pharmacy and Guardian also launched private label brands over 2009 or 2010. New Born Nappies/ Diapers . It may not challenge Huggies and Pampers anytime in the forecast period. with its aggressive positioning and marketing to retailers.2 2. thus minimising the need for disposable products. The standard product type appeals most to Indian households.2 12.115.Standard Nappies/ Diapers Nappies/Diapers/Pants Source: Retail Sales of Nappies/Diapers/Pants by Category: Value 2005-2010 2006 2. unit prices for the entire category are expected to decline over the forecast period. such a development would dampen both volume and value sales growth. trade interviews.838.873. especially in urban India. may challenge Huggies for the position of number one brand by value sales within the forecast period.3 2.2 488.3 Euromonitor International from official statistics.3 943. he/she is carefully tended to with cloth nappies/diapers.436.873. With cost being one of the major reasons for consumers not switching to disposable nappies/diapers.8 4. trade press.420.6 2008 3.6 1.9 2.6 2009 4.546. trade associations. junior nappies/diapers may see lower growth as children take up potty training at younger ages.9 112.3 2.4 1.2 1.959. • • • • CATEGORY DATA Table 1 Rs million 2005 Disposable Pants Nappies/Diapers .4 2005-10 CAGR 15. At the other end of the spectrum.8 430.6 1.3 4. store checks.0 1.520. but is likely to fight these two brands for shelf space in modern retail channels.6 8. standard nappies/diapers is expected to show the strongest value growth among all categories over the forecast period.313.6 1.291.6 557.8 12.026. Manufacturers may also look to deliberately reduce product prices and offer promotional packs in order to draw new families towards the convenience of disposable nappies/diapers.420.0 1. With the lower-priced categories of standard and new born nappies/diapers growing faster than junior nappies/diapers in terms of constant value sales. The operators of the national brands Huggies and Pampers are expected to indulge in product differentiation strategies in order to create a clearer consumer base for all three types of offerings in the forecast period.777.2 2007 3.6 3.Junior Nappies/Diapers . company research.092.7 384.Nappies/Diapers/Pants India disposable pants and new born nappies/diapers will add to the growth generated by the increased need for nappies/diapers/pants.1 632.959.000.0 1.New Born Nappies/Diapers 11. Pampers.4 16.273.Junior Nappies/Diapers .0 78.321. Although manufacturers managed to hold on to or even reduce unit prices over the review period.3 2. During the new born stage of the baby’s life. trade sources Table 2 Retail Sales of Nappies/Diapers/Pants by Category: % Value Growth 2005-2010 % current value growth 2009/10 Disposable Pants Nappies/Diapers . These will involve television advertisements and point-of-sale displays. Already the largest product category within nappies/diapers.6 2. Uni-Charm India Pvt Ltd’s flagship brand Mamy Poko is likely to gain prominence over domestic brands such as Snuggy Dry and Baby Soft over the forecast period.321. • Any major price increases by leading nappies/diapers brands in India may serve as a potential threat to growth over the forecast period.769.838.0 2010 4.3 2005/10 TOTAL 104.436. the increasing cost of production and transportation may lead to a situation where the rise may have to be passed on to the end consumer in the form of current unit prices.7 685.4 3.4 Euromonitor International Page 3 . as parents become more aware of the requirements for particular age groups. 105.3 2011 5.6 3.0 2010 49.209. trade sources Table 3 % retail value rsp Company Nappies/Diapers/Pants Retail Company Shares 2006-2010 2006 67.0 2008 59.0 2.3 0. trade associations.9 4.5 8.Standard Nappies/Diapers Nappies/Diapers/Pants Source: 12.333.0 2009 53.0 26.0 2007 63.1 3.6 23.3 0.5 3. trade sources Table 4 % retail value rsp Brand Huggies Dri Fit Pampers Snuggy Dry Baby Soft Caremate Snuggy Dry Fitti Libero Baby Love Snuggy Snuggy Others Total Source: Nappies/Diapers/Pants Retail Brand Shares 2007-2010 Company Kimberly-Clark Lever Ltd Procter & Gamble Home Products Ltd Godrej Consumer Products Ltd Wipro Ltd Pantaloon Retail India Ltd Godrej SCA Hygiene Ltd DSG International Ltd Godrej SCA Hygiene Ltd DSG International Ltd Godrej Consumer Products Ltd Shogun Diapers Ltd 2007 58.1 104.0 20.383.8 0.9 0.New Born Nappies/ Diapers .5 0.530.8 15.3 3.8 15.0 8.0 100. trade press. trade press.8 100.0 3.7 685.708. company research.4 100.8 30.3 2015 8. trade associations.3 981.5 0. company research.961.019. trade interviews.5 3.4 3.4 18.0 8.0 Kimberly-Clark Lever Ltd Procter & Gamble Home Products Ltd Godrej Consumer Products Ltd Wipro Ltd Pantaloon Retail India Ltd DSG International Ltd Godrej SCA Hygiene Ltd Shogun Diapers Ltd Others Total Source: Euromonitor International from official statistics.3 2. trade interviews.2 0.3 3.0 8.0 23.9 1.444.273.Nappies/Diapers/Pants India .3 870.3 0.0 20.0 7.8 2012 6.0 7.2 0. company research. store checks.9 9.9 1.0 2009 57. trade sources Table 5 Rs million Forecast Retail Sales of Nappies/Diapers/Pants by Category: Value 2010-2015 2010 Disposable Pants Nappies/Diapers .2 11.0 Euromonitor International from official statistics.3 0.Junior Nappies/Diapers .4 2.6 8.000.0 2010 54.0 8.7 Euromonitor International Page 4 .0 100.0 4.0 2008 55.7 100.9 3. trade associations.173.6 2.513.Standard Nappies/ 4.2 100.3 2.0 4.3 8.3 3.7 2014 7.6 2013 6.748.5 3.9 8.261.4 8.7 1.9 9.8 26.872.9 Euromonitor International from official statistics.1 100.959. trade press.9 100.6 2.5 3.5 30.0 3.0 0.9 3.4 108.243. store checks.0 100. store checks.8 0.951. trade interviews.1 1.858.3 2.3 3.7 772. 6 8.Nappies/Diapers/Pants India Diapers Nappies/Diapers/Pants Source: 4.0 6.7 12. company research.173.6 6.3 Euromonitor International from trade associations.6 11.1 12. trade interviews. trade sources Euromonitor International Page 5 .6 80.959.3 5.951.6 Euromonitor International from trade associations.8 12.7 13.5 90.513.3 7.7 69.Standard Nappies/Diapers Nappies/Diapers/Pants Source: 2010/15 TOTAL 80. trade sources Table 6 Forecast Retail Sales of Nappies/Diapers/Pants by Category: % Value Growth 2010-2015 % constant value growth 2010-15 CAGR Disposable Pants Nappies/Diapers .Junior Nappies/Diapers . trade press.New Born Nappies/Diapers . trade press.1 81. trade interviews.872. company research.961.