11.22.16
In a recent analysis of Kimberly-Clark, Forbes magazine researchers have found that the maker of personal care and paper based products should target developing markets for future growth. At the top of this list is the Chinese baby diaper market, which reported consumption of 27.4 billion pieces in 2015 a number that should rise along with per capita disposable income in the region as well as the relaxation of the “one child policy.” These factors should contribute to the baby diaper market growing at a rate of 10% or above in the next five years.
Kimberly Clark is already witnessing strong volume growth in China. Although competitive pricing is impacting revenues in this region, despite high sales, by working on cost savings programs, K-C could offer lower prices (and compete better) without impacting its margins. In the long term, if Kimberly Clark is able to innovate and offer competitive prices, it can strengthen its position in the region.
Forbes also pointed to Brazil, where K-C already has a strong presence, posting a 14% increase in revenues in the region last year. While Brazil is the world’s third largest market for disposable diapers, (following the U.S. and China). This market could grow quickly too. The average number of diapers used per day in the country is four, as opposed to seven in developed countries. This shows that there is a strong growth potential for the company’s Huggies & Pull ups Baby Care segment in this region. According to Forbes estimates, the global market size of baby diapers will increase steadily from $51 billion in 2016 to nearly $80 billion by the end of our forecast period and K-C should be able to maintain its market share at around 10% of this growing market.
Kimberly Clark is already witnessing strong volume growth in China. Although competitive pricing is impacting revenues in this region, despite high sales, by working on cost savings programs, K-C could offer lower prices (and compete better) without impacting its margins. In the long term, if Kimberly Clark is able to innovate and offer competitive prices, it can strengthen its position in the region.
Forbes also pointed to Brazil, where K-C already has a strong presence, posting a 14% increase in revenues in the region last year. While Brazil is the world’s third largest market for disposable diapers, (following the U.S. and China). This market could grow quickly too. The average number of diapers used per day in the country is four, as opposed to seven in developed countries. This shows that there is a strong growth potential for the company’s Huggies & Pull ups Baby Care segment in this region. According to Forbes estimates, the global market size of baby diapers will increase steadily from $51 billion in 2016 to nearly $80 billion by the end of our forecast period and K-C should be able to maintain its market share at around 10% of this growing market.