What are the challenges and opportunities for China and Southeast Asia’s sanitary products market in 2022?

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1.Declining birth rates in the Asia-Pacific region
Baby diapers are one of the largest contributors to retail sales of disposable hygiene products in the Asia-pacific region. However, demographic headwinds have limited the growth of this category, as markets throughout the region are being challenged by declining birth rates. The birth rate in Indonesia, southeast Asia’s most populous nation, will drop to 17 percent in 2021 from 18.8 percent five years ago. China’s birth rate has fallen from 13% to 8%, and the number of children aged 0-4 has fallen by more than 11 million. It is estimated that by 2026, the number of diaper users in China will be about two-thirds of what it was in 2016.

Policies, changes in social attitudes towards family and marriage, and improvements in education levels are key factors contributing to the decline in birth rates in the region. China announced its three-child policy in May 2021 to reverse the trend of an aging population, and it is unclear whether the new policy will have a major demographic impact.

Retail sales of baby diapers in China are expected to achieve positive growth in the next five years, despite a shrinking consumer base. Compared with developed countries, China’s per capita consumption is relatively low, but there is still considerable room for growth. Although they are more expensive, panty nappies are becoming the first choice for parents due to their convenience and hygiene, as they help potty training and foster a greater sense of independence in children. To this end, manufacturers are also responding differently to new product development.

With per-capita consumption still low and a large untapped consumer base in Asia Pacific, the industry has opportunities to further drive market penetration through retail expansion, product innovation and attractive pricing strategies. However, while innovation in the premium segment through more sophisticated value-added products and complementary models has helped the segment grow in value, affordable pricing remains critical for broader product adoption.

2.Innovation and education are key to advancing women’s nursing
Feminine hygiene products are the largest contributor to retail sales of disposable hygiene products in Asia Pacific, both by value and volume. In the Southeast Asia region, the female population aged 12-54 is projected to reach $189 million by 2026, and the female care category is projected to grow at a 5% CAGR to reach $1.9 billion between 2022 and 2026.

Rising disposable incomes for women, as well as ongoing education efforts by government and non-profit agencies to address women’s health and hygiene issues, have helped drive retail sales growth and industry innovation in this category.
According to the report, 8 percent of respondents in China, Indonesia and Thailand use reusable sanitary pads. While using reusable products may require cost considerations, more consumers are also looking for environmentally sustainable options.

3.The aging trend is conducive to the development of adult diapers
While still small in absolute terms, adult nappies are the most dynamic single-use hygiene category in the Asia-Pacific region, with high single-digit growth in 2021. While Southeast Asia and China are considered relatively young compared to developed markets such as Japan, changing demographics and a growing elderly population provide an important customer base to ensure category growth.
Adult incontinence retail sales in Southeast Asia totaled $429 million in 2021, with CAGR value projected to grow by 15% in 2021-2026. Indonesia is a major contributor to growth in southeast Asia. While the proportion of people over 65 in China is not as high as in countries such as Singapore or Thailand, in absolute terms the country has a much larger population base, creating plenty of opportunities for organic growth. China, on the other hand, ranks second only to Japan in terms of market size in the Asia-Pacific region, with retail sales of $972 million in 2021. By 2026, China is expected to be number one in Asia, with retail sales growing at a cagR of 18% from 2021 to 2026.
However, demographic changes are not the only factor to consider when considering strategies for increasing adult urinary incontinence. Consumer awareness, social stigma and affordability remain key barriers to increasing penetration in the region. These factors also often limit product categories designed for moderate/severe incontinence, such as adult diapers, which are generally viewed by consumers as less costly. Cost is also a factor in the high use of adult urinary incontinence products.

4 .conclusion
In the next five years, retail sales of disposable sanitary products in China and Southeast Asia are expected to achieve positive growth, accounting for nearly 85% of the absolute growth in the Asia-Pacific region. Despite the changing population structure may be organic growth of baby diapers are put forward more and more challenges, but the increase of the consumers’ awareness of disposable hygiene products and the improvement of affordable, habits of persistence and product innovation will help to push the disposable hygiene products category, especially considering that the region still has great potential of unmet. However, in order to successfully meet the needs of local consumers, it is also necessary to consider the economic and cultural differences in each market such as Southeast Asia and China.
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Post time: May-31-2022