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    Online Exclusives

    Unicharm: First Asia, Then The World

    The number one hygiene company in Japan and much of Asia is focused on growing globally

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    Karen McIntyre, editor04.10.18
    Unicharm continues to be the largest manufacturer of hygiene products in Asia and the third largest in the world. It continues to hold the top spot in all three of its key categories—baby care, feminine hygiene and healthcare (adult incontinence)—in Asia and is in the third position in baby care and feminine hygiene globally. It is the second largest healthcare supplier in the world.

    It continues to consider the fast-growing Asian market as its priority market and it has been successful in this market by focusing on improved nonwoven fabrics and better absorbent material processing and forming technology, allowing it to launch high quality products that are popular with consumers in Japan and internationally.

    While Asia is an important area for the company, it has a presence in 80 countries and regions worldwide. Currently 42.6% of sales are in Japan, 42.9% are elsewhere in Asia and 14.5% are spread throughout the rest of the world.
     
    A Long History
    In 2017, the Tokyo, Japan-based company celebrated 50 years of sustained business and sales of about ¥700 billion ($6.5 billion). In the early 1990s, aware that its domestic Japanese market was maturing, Unicharm began actively expanding its business in overseas markets, positioning Asia as its main market. This strategy has worked. The company has a leading share and has achieved strong and sustained expansion in many key Asian markets.

    Unicharm’s wide range of businesses supplies products for people from infancy to old age and this is a key source of growth. By launching the right products at the right time based on market characteristics and consumer needs in each business field, Unicharm can counter the impact of population trends and deliver steady sales growth, according to the company.

    As societies continue to age and birth rates decline, Unicharm expects to see an increase in spending per child as well as a growth in the number of elderly people seeking healthy retirements. This will strengthen Unicharm’s businesses in baby care, pet care and retirement incontinence and Unicharm will continue to manufacture and sell high value-added products to respond to these trends.

    Meanwhile, emerging markets will lead to economic growth, and growth in the number of middle class consumers will expand the reach of its baby care and feminine care businesses.
    Unicharm expects to continue to be successful by focusing on four key strategies–shifting a focus from creating products to creating value; building a pet care business with distinctive differentiation in Japan, the U.S., China and Taiwan; developing a winning pattern in the personal care business; and channeling resources into priority countries and regions and converting all subsidiaries to local management units and nurturing resonant personnel.

    While Unicharm’s initial strategy in China—where it was an early entrant—was not as initially successful as the company hoped, in 2016 the company shifted gears and started exporting diapers from Japan rather selling ones made locally.

    One misstep, according to observers, was the positioning of its affordable MamyPoko diapers as its main brand in China rather than the high-end Moony. The company also used large supermarkets and other conventional venues as sales channels. This game plan worked well until consumers sought higher-quality versions and turned to the online market.In response to these problems, Unicharm is ramping up exports of Japanese-made diapers to China. This will be in part achieved through an energy-efficient, smart factory in the Fukuoka Prefecture town of Kanda, which is slated to be completed this year. The plant is expected to drastically increase the company's capacity to export Moony diapers not only to China but to other Asian markets as well.
    Unicharm will also increase sales of pant-style diapers, which are now made in China and Japan, to meet the shift in demand and bolstering e-commerce efforts by boosting spending on related marketing. The company reported that sales are growing rapidly in the e-commerce market, which is the largest sales channel for diapers in China.
    Meanwhile, feminine hygiene sales are flourishing in China, where attractive designs and high quality have been popular with younger women. This has encouraged Unicharm to introduce high value added products like the shorts-type sanitary napkins.

    Outside of China, Unicharm continues to focus on growth in many smaller Asian countries. In Indonesia, a deteriorating economy has led to slower growth in disposable diaper sales but this business continues to be the clear market leader in the country, with a 58% marketshare. In fact, Unicharm also dominates feminine hygiene with a 38% share and healthcare with a 50% share. Unicharm is also dominant in the Southeast Asian markets of Thailand and Vietnam where its brands hold the number one market positions across all the hygiene categories.
    One of the next great frontiers for growth will be India. In late 2017, the company announced it would open its third disposable diaper plant in India, aiming to boost its output capacity in the growing market by 50%. The new facility, valued at up to ¥20 billion ($176 million), will be located in Ahmedabad, in the state of Gujarat.

    Unicharm entered the Indian diaper market with its MamyPoko brand eight years ago and is already in the no. 2 position, behind only Procter & Gamble's Pampers brand. With sales growth as high as 30% per year, the Japanese company has been struggling to meet demand with its current capacity, amid a rise in births in the country.

    The plant is scheduled to get up and running this spring.

    Unicharm's two existing plants are located in Rajasthan and Tamil Nadu. The former is out of commission due to a fire that occurred last year; the company hopes to restart this plant in 2019.
    Other important markets include Myanmar, where it acquired a leading manufacturer of hygiene products in 2013, Brazil, where it started production in Sao Paulo in 2014, and the MENA region, where Unicharm has a strong presence in Saudi Arabia.
     
    Local Success
    Unicharm has captured a high share of the market in Japan by leveraging the strengths of two brands – Moony, which has the highest levels of quality in the disposable baby diaper range, and MamyPoko, which offers an excellent balance between quality and price. As the domestic diaper market has matured, Unicharm has continued to offer innovative value proposals and actively raised awareness about hygiene and comfort issues, helping it to achieve sales growth ahead of the market average and significantly boosting profitability.

    Unicharm launched the Natural Moony series in October 2016, using organic cotton-based surface sheets to create high-quality diapers that are even kinder on babies’ skin. Based on scientific principles, Unicharm has sought to create a disposable diaper that puts infants at ease by giving them the impression they are being held in their mothers’ arms.

    Despite a maturing market, Unicharm has continued to grow its feminine care business in Japan by continuing to offer new value proposals tailored to women’s changing lifestyles and by leveraging its nonwoven fabric technology to launch high value-added products. In Japan, women are taking a more active role in society due to changing lifestyles and an increase in the number of working women. This is spurring growing demand for well-designed feminine care products that are gentle on the skin, more comfortable and absorbent. Unicharm has launched products to address those needs, leading to steady growth in sales and its highest-ever market share in Japan.

    Unicharm has continued to create a steady stream of innovative products by carefully monitoring women’s concerns and the latest trends in their increasingly diverse lifestyles. This approach has helped it generate stable growth.

    Since moving into the disposable adult diaper market in 1987, Unicharm has led the industry in promoting wider use of adult incontinence care products in Japan. The company has developed products that address consumer needs in both the moderate and light adult incontinence categories and worked to create new markets. As a result, the healthcare business has built a dominant position in the retail market with a share of more than 50%.

    The target market for incontinence care products is likely to expand further in Japan. To tap into this growth, Unicharm aims to stand out in the market by offering a wider choice of products and new value proposals in order to strengthen its already dominant position in the market and generate sustained growth. To encourage even wider user of disposable adult diapers, Unicharm has worked with retail stores to create sales areas that make it easier for shoppers to select the right products. Also, through partnerships with many retailers, the company provides advice to shoppers about how best to use its products. The continued use of toilet facilities plays an important role in maintaining activities of daily living, motivation and care levels. In support of that, Unicharm has introduced patented elastic snug-fit gather technology for leg areas in its Lifree Pants range of disposable adult diapers, which are close-fitting but easy to put on. The improved technology allows users to wear the pants-type diapers for even longer periods.

    In the light incontinence and urinary incontinence care market, Unicharm is leading market growth in Japan with two brands – the liner-type Charm Nap range and the napkin-type Lifree range. The urinary incontinence care market is expanding, spurred by recent growth in the number of active seniors who take part in leisure activities. Until recently, the light incontinence market was focused on women, but a large number of men also suffer from this problem. To address this demand, Unicharm launched Lifree Comfortable Thin Pads for Men in 2014. This product, which is specially designed to be discreet and prevent staining, is aimed at men who avoid going out due to concerns about light incontinence. Also, amid growth in the market, Unicharm has expanded its lineup to give users more options to select the best products for their needs. This has supported strong growth, with sales of its light incontinence products for men increasing at an average annual rate of more than 60% in the last three years.
     
     
     
     
     
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