The evolution of the Disposable Hygiene products industry in China
The Disposable Hygiene products industry in China is at a turning point. Once characterized by quantitative accumulation, it is now going through a qualitative metamorphosis, where the challenges of the past are leaving room to new ones. Cutthroat domestic competition, trade wars, overcapacity and product homogeneity are now its distinctive traits.
In response to this shift, players in the Disposable Hygiene industry are seeking new paths to keep growing. First, by restructuring the value chain under the spirit of technological innovation. In such a new paradigm, premiumization is the main shaping force. Industrial upgrades, product diversification, personalisation and a greater focus on the high-end customer segment are the new drivers of the market.
The retail infrastructure has also changed. In parallel with traditional distribution channels composed of brick-and-mortar stores, Disposable Hygiene brands in China are strengthening their online presence in ecommerce and social media platforms. With the world's biggest internet user base at its disposal, China detains an unmatched favorable position. Social commerce is worth $300 billion and is poised to grow even more in the coming years. As of today, more than 300 million people use social media in China, roughly equal to the combined population of France, Germany, Italy, Spain and the United Kingdom.
Sustainability has become paramount. In the ever-changing global order, China is taking the lead on sustainability, promoting environmental and social responsibilities at a corporate level. At the same time, the Chinese Disposable Hygiene industry has made a point of incorporating eco-friendly products in their offer, prioritizing organic raw materials and natural fibers.
Looming threats over the Chinese Disposable Hygiene products market
From a macroeconomic perspective, China’s economic growth is moderating. A slowdown in debt accumulation, more severe financial regulations and a reduction of the account surplus show a healthy economic development. Yet, trade uncertainty and the need for further reforms cloud the outlook. As far as Disposable Hygiene is concerned, the huge population, improving living standards and increased domestic consumption bode well for the future of the nonwovens industry.
For one, China’s rapidly ageing population is becoming more of a factor and is bound to push the Chinese Disposable Hygiene products market into a new reorganization. According to the United Nations, by 2050 China will be the third country by percentage point increase in the share of older people in the world. It is not a stretch to imagine that most manufacturers will shift some of their investments in the country from the Baby Diapers market to personal hygiene products and Adult Inco solutions.
Another issue is that of global trade. In 2019, the impediments to international commerce due to US taxes on export, not to mention the restrictions put into place to defuse the COVID-19 pandemic, forced Chinese Disposable Hygiene manufacturers to change their game. As a result, the Baby Diapers market, already characterized by overproduction spiraled into a intense domestic battle. In this scenario, Chinese hygiene products manufacturers are following a two-pronged strategy.
First, they are moving their export focus elsewhere. In the face of the Baby Diapers’ boom in the APAC region, manufacturers are looking at the Baby disposable market in South East Asia and India to expand their reach abroad. With protectionist policies making a comeback, players have diversified their product and marketing strategy and boosted production efficiency. Still, nonwoven investments are stronger than ever in China, as foreign companies, despite the trade uncertainty, look to globalize their business in the country.
Secondly, Disposable Hygiene products companies have doubled down their efforts innovation-wise, launching new, premium product features to capture a younger audience. Despite being slower at it than previous generations, Millennials are finally starting their own families and the industry is not staying idle. On the contrary: Disposable Hygiene players have upped their social media game, launched in-depth partnerships with several e-commerce shops and crafted new marketing programs.
Personal hygiene products: how personalisation has become the norm
A significant novelty in the landscape of Disposable Hygiene products is personalisation. Once infeasible at mass scale, it is now the standard in the Chinese Baby Diapers market. To satisfy Millennials, already used to tailored ads, search results and shopping experiences, Baby Diapers manufacturers are making efforts to let the client stay in control and fully customize the product, picking the features they favour the most. Yet, it's not only a Millennial thing. Consumers of all ages look kindly at this opportunity.
In particular, when it comes to materials and premium features. Customers have high expectations in terms of softness, thinness and comfort, being the main drivers of the market. Still, it's a tricky balance, as the need for sustainability must always take the price into consideration to avoid losing market share.
This focus on raw materials beget innovation in the field. To keep up with the customer demand, suppliers of raw materials introduced new equipment and developed new technologies to boost industrial development. As a result, the business of hygiene materials is forecast to expand together with the heightened demand for Disposable Diapers.
Organic personal hygiene products: natural becomes as a selling point
Since Millennials are more green-conscious than those before them, companies in the field intensified their pledge on sustainability, with a renewed focus on natural materials such as corn, batatas, cotton, bamboo and silk fiber. For youngsters, “natural fiber” became the most appealing feature in the Baby Diapers market, as organic personal hygiene products with fewer additives met the customer expectations in terms of health and wellness.
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