SHIFTS TO PREMIUM AND E-COMMERCE PROPEL CATEGORY TO RANKING DEBUT
The baby care category appears for the first time in the BrandZ Top 100 Most Valuable Chinese Brands, driven by the brand Anerle, a newcomer at number 76. The Hengan Group, a Chinese fast moving consumer goods (FMCG) manufacturer, specializing in household paper and personal hygiene prodcuts and personal hygerine products makes markets Anerie disposable diapers, and promoted the brand in maternity shops and through e-commerce.
Relatively new to China, the disposable diaper category is crowded with international brands anticipating significant growth potential because of current low category penetration, increased a uence, desire for convenience, and the repeal of the one child policy. In addition, diapers were among products that qualified for lower tari s at China’s new cross border e-commerce zones. Although, the economic slowdown hurt diaper sales at the low end of the market, premium priced products appealed to wealthier members of the middle class as they shifted purchasing priorities from price alone to quality and value for money. Lower raw material costs, specifically the drop in prices for petroleum products, helped boost category profits.
The growth of the diaper sector was part of an overall increase in sales of baby products. Sales of baby products rose 7.3 percent year-on-year in 27 Chinese cities studied by Kantar Worldpanel, compared with a 3.6 percent growth a year earlier, and 2.8 percent for FMCG products overall.
E-commerce proved an especially productive channel for diapers, which experienced both high penetration and sales. Between 2012 and 2014, almost half of all households that purchased diapers, bought diapers at least once online, and e-commerce accounted for about a third of all diapers sold, according to Kantar Worldpanel. Online spending for diapers increased at a 41 percent compounded annual growth rate between 2012 and 2014.