baby pops out a pile of diapers

A sneak peek to 2022’s baby diaper market

There's no stopping the baby diaper market. Looking at the data, 2022 is going to be even better than 2021. As of today, this behemoth worth 47.3 billion dollars globally is divided in two segments: Baby Pants, valued at 11 billion, and Open Diapers, which accounts for 36.3 billion. Speaking of baby diaper trends, the most important topics of the year are likely to focus around two major issues: increasing consumer awareness and price sensitivity[1].

Mainly due to declining birth rates, North America's and Europe's baby diaper markets are going through a period of stagnation. In these areas, consumer awareness is already at high levels. Vice versa, developing countries are registering a strong momentum, largely driven by rapid urbanization and product variety, with the smallest yet highest-growth format being Baby Pants in contrast with the dominant but lagging diapers category. Here, attention to hygiene is growing proportionally with improving living standards, especially in big urban areas where unemployment tends to be lower and access to capital greater.

Price sensitivity, on the other hand, is pushing companies to re-examine and optimize their diapers manufacturing facilities, streamlining inefficiencies. Major factors in the equation are inflation and lockdown-driven supply chain disruptions. Brands are taking actions, focusing on portfolio diversification, functionality-centric value propositions and a better communication targeting Millennial and Gen-Z parents. However, price sensitivity depends entirely on the area. In low-income regions, it coincides with the growth of price orientation. In developed countries, it is synonymous with value for money, i.e. the research for good quality at a fair price.

Diapers will keep booming in a few developing countries

The penetration of Open Diapers and Pants for babies aged 0-3 is the highest in developed countries like the West European and North American ones. The greatest opportunity in the baby diaper market is in MEA (Middle East Africa) and APAC (Asia-Pacific), where the average income is rising and the upside is significant. Indonesia, India and Nigeria made almost 10% of the global volume of baby diapers while their per-capita consumption is below average, showing plenty of room for growth if income, accessibility, hygiene awareness and product variety keep increasing.

Birth rates are rising in both the regions, making Asia-Pacific and Middle East and Africa interesting opportunities when it comes to baby diapers. According to the World Economic Forum, in less than a decade one in five people will be African[2]. This population boom is strongly counter trend when compared to the fertility rate in the rest of the world.

Open Diapers vs Baby Pants

Between Open Diapers and Baby Pants, the dominant format is the former, making about 70% of the entire category's total volume and value sales in 2020. It is most prominent in Africa and the Middle East, especially in Nigeria, Kenya and Egypt, largely due to its inherent affordability and growing appeal to low-income consumers switching to disposable diapers.

On the other hand are Baby Pants. While not the prevalent format, they are definitely the fastest-growing one, with a volume share of 23% of the category in 2020, which is expected to reach 30% in 2025. In countries such as China, India and Vietnam, more and more consumers favor Baby Pants due to their comfort, flexibility and convenience. If Open Diapers represent the affordable solution, Baby Pants lie on the affordable premium spectrum of the baby diaper market. Interestingly, Baby Pants are also growing in North America and Western Europe. Here, Baby Pants are mainly used for potty training, while in APAC they tend to be used from the very first months of the child’s life.

In both formats, natural ingredients and functionalities such as leak protection and skin-friendly materials are highly sought-after. A consistent phenomenon among consumers is the unwillingness to pay extra for must-have properties, paired with the willingness to punish those who don't include them[3].

The profile of the consumer in developed and developing countries

In 2020, women at their first childbirth were 23 years old on average globally - primarily Gen-Z and younger Millennial parents. Income-wise, the situation is quite complex. Excluding older millennials, most of these consumers have yet to enter or just entered the workforce. This should put them in the low-income category, but as a matter of fact, most of them are part of the highest income social class segment. This is no mistake: simply put, there is a wide income gap across this group.

A significant difference between Millennials and Gen-Z on the one hand and older generations on the other is the former's attention to a few topics, such as identity politics, diversity, environmental and social responsibility.

Manufacturers are switching to a regional production to get closer to end-consumers

Inflation is rising around the world[4]. With price sensitivity already being a major issue, it is no wonder that businesses are taking action, optimizing their value chain. But with worsening global shortages and rising wages, they can’t save their capital neither on labor nor on commodities, as they also are at record-high[5],[6]. That's why more and more corporations across the globe are trying to optimize their supply chain by going regional. Deglobalization is quickly becoming the new normal[7].

Unsurprisingly, Private Labels are coming to the fore, especially in Russia and Eastern Europe, gaining more volume and value market share than name brands over the last five years. The role played by Private Labels vary depending on the area. In Russia, they stand out for their lower pricing. In higher-income countries, such as Norway and the UK, the boundary between them and established brands has gotten blurred in recent years.

One thing is certain: 2022 will be full of opportunities, the greatest ones being in MEA and APAC, where birth rates are rising and living standards are improving, especially in the affordable premium category. If you want to stay on top of trends, contact us.


[1] Source:Euromonitor
[2] Source:World Economic Forum
[3] Source:Euromonitor
[4] Source:The Economist
[5] Source:Market Watch
[6] Source:TD Economics
[7] Source:Bloomberg
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