Sahiba Puri, Euromonitor International03.10.22
The global retail disposable hygiene market was valued at $112 billion in 2021 and is expected to reach $129 billion by 2026. Asia Pacific contributes more than 40% to the global retail sales. Evolving hygiene standards, growing consumer awareness, increasing purchasing power, innovation, and improved product availability support positive sales performance in the region.
Within the Asia Pacific region, China and Southeast Asia (SEA) collectively account for more than 70% of sales, with China accounting for the lion’s share. In 2021, China represented $28 billion in retail sales while SEA accounted for $6 billion, with Indonesia and Vietnam as the engines of growth in SEA.
Declining Birth Rates Across the Region Challenge Long-term Growth Prospects in Baby Diapers
Baby diapers are among the largest contributors to the retail disposable hygiene sales in Asia Pacific. However, demographic headwinds have curtailed the category growth, as markets across the region are being challenged by the declining birth rates. Indonesia—the country with the largest population in SEA—has seen its birth rate come down to 17 births per 1000 in 2021, compared to 18.8 five years ago. China’s birth rate dropped to eight births per 1000, down from 13 five years ago, representing over 11 million drop in the number of children ages zero to four. By 2026, China’s diaper population is estimated to be about two-thirds of what it was back in 2016.
A combination of family planning policies, changing social attitudes about family and marriage, increasing educational levels and rising labor force participation among women are among the key factors leading to the declining birth rates in the region. In May 2021, China announced the three-child policy, to reverse the aging population trend. It is still unclear whether the new policy will have a significant impact on the population. The country’s two-child policy introduced in early 2016 failed to generate a sustained upsurge of new births.
Despite a contracting consumer base, retail sales of baby diapers in the region are still expected to see a positive growth over the next five years, with disposable pants driving the growth. Given still low per capita consumption, compared to the developed countries, there is a room for organic growth. Pant format, despite higher pricing, shows healthy demand, owing to convenience and durability. Pants are increasingly becoming the preferred format among parents as they help support toilet training and foster a greater sense of independence. Manufacturers are also responding with new product development. In Indonesia, for instance, leading player Softex (now owned by Kimberly-Clark) introduced All-New Sweety Gold Pants NextGen in 2021, which promotes the freedom of baby movement.
With still low per capita consumption and a significant untapped consumer base in the region, the industry has an opportunity to drive further the market penetration through retail expansion, product innovation, and attractive pricing strategies. However, while innovation in premium segment through more sophisticated value-added products and pant format can help value growth in the category, affordable pricing strategies will remain crucial to wider product adoption.
Innovation and Education are Key to Driving Growth in Feminine Care
Feminine sanitary protection is the largest contributor to the retail disposable hygiene sales in Asia Pacific, in both value and volume terms. In SEA, where the female population aged 12-54 is expected to reach $189 million by 2026, the feminine care category is projected to grow at a CAGR of 5% between 2022 and 2026 to reach $1.9 billion. In China, on the other hand, feminine care faces a number of challenges, including already high per capita consumption of towels (pads)—the preferred format—and aging demographic. Subsequently, the category is expected to see only a modest growth ahead, chiefly led by trading up and premiumization.
Improving disposable incomes among women, as well as ongoing educational efforts by governments and non-profit agencies to address feminine health and hygiene have been helping to drive retail growth, along with the industry innovation.
Innovation efforts in the category are centered around product functionality and value-added features. In Indonesia, for instance, the leading player Softex launched a number of value-added products over the past couple of years, including Softex Celana Menstruasi - sanitary towels in pant format. The success of this format prompted other leading players to introduce similar products, such as Unicharm’s Charm Sleep Protect Panties. In China, market leader Sofy launched a new hybrid product in 2020, which uses proprietary Japanese technology and incorporates a body warming function into the sanitary towel that extends to the lower abdomen for added comfort. This kind of innovation, however, comes with a higher price tag and can limit growth prospects to upper income consumer groups.
Over the years, the region has also seen a growing concern around waste generated by feminine hygiene products and the need for more sustainable alternatives. Euromonitor International Voice of the Consumer: Health and Nutrition Survey released in 2021 revealed that 21% respondents across China, Indonesia and Thailand turn to reusable underwear, while 8% use reusable pads. While costs can be a consideration for turning to reusable products, more consumers are also looking for environmentally sustainable options. In Vietnam, local Vietnamese brand—Green Lady Vietnam—offers reusable sanitary products targeted at young environmentally conscious consumers. Also, Chinese lingerie brand NEIWAI and Uniqlo launched washable underwear as an alternative to disposable products. Even though retail sales of these products remain small, compared to disposable, reusable alternatives have been gaining traction. This trend poses both challenges and opportunities for the disposable feminine care brands to address the issue of sustainability through innovative products and packaging that would appeal to the eco-friendly consumer segment.
While innovation in functionality, material, formats and value-added benefits will remain among the drivers of growth in SEA and China, brands would need to find a balance between quality and pricing to draw more users from the vast low income consumer base that constitutes the main portion of the untapped consumer base.
Aging Population Trend Benefits Adult Incontinence
While still small in absolute value, retail adult incontinence is the most dynamic disposable hygiene category in Asia Pacific, registering upper single digit growth in 2021. While SEA and China are considered to be relatively young compared to more developed markets like Japan, the evolving demographic landscape and growing number of the elderly people provide a significant customer base to secure category growth.
In 2021, retail adult incontinence sales in SEA totaled $429 million, with projected CAGR value growth of 15% over 2021-2026. Indonesia is a primary contributor to growth in the SEA region. While the country’s share of population aged 65+ is not as significant as in countries like Singapore or Thailand, the substantially larger population base in absolute numbers creates abundant opportunities for organic growth. On the other hand, China ranks the second in market size across the Asia Pacific region, after Japan, with retail sales of $972 million in 2021. By 2026, China is expected to top Asia, with retail sales increasing by 18% CAGR over 2021-2026. Increasing penetration of retail disposable adult incontinence products in the country will be driven, among other factors, by the largest number of elderly in the world.
However, demographic shifts are not the only factors to consider when thinking about growth strategies for adult incontinence. Consumer awareness, social stigma and affordability remain among the key barriers to higher penetration in the region. These factors also often restrict the category to product formats designed for moderate/heavy incontinence, such as adult diaper which is typically seen as more cost efficient by consumers. Costs are also among the factors behind high usage of reusable adult incontinence products. Euromonitor International Voice of the Consumer, Health & Nutrition survey released in 2021 revealed that adult diaper remains the leading format used by consumers in China and Thailand, with 46% of respondents reporting the use in China and 31% in Thailand. At the same time, in China, 42% of respondents indicated the use of reusable adult incontinence products, in Indonesia—38%, and in Thailand—19%.
The survey also revealed a high proportion of respondents who use feminine menstrual products for adult incontinence protection—more than 30% of respondents in China, Indonesia and Thailand. These findings are indicative of further opportunities to drive specialized disposable adult incontinence protection use through product awareness, innovation and better access.
Innovation in adult incontinence across the region has been evolving around product functionality (e.g. breathability, absorbency), as well as thinness and discretion to address concerns related to social stigma. In Indonesia, Softex launched Confidence adult pants, touting discreet cut and style as well as “Flexible Move Tech” that allows for more movement flexibility while also being discreet. Furthermore, in China, Kimberly-Clark introduced the Poise brand in 2021, marketed primarily to Chinese women with light incontinence issues. Hangzhou Coco Healthcare also launched incontinence products targeting women, expanding incontinence product lines.
Preventative Hygiene Practices Remain on the Agenda and Support Demand for Wipes
Wipes benefited most from the pandemic in 2020, but pace of growth decelerated in 2021 as demand normalized. However, in per capita terms, wipes usage remains above the pre-pandemic levels. In value terms, SEA and China expect healthy growth to continue, with value CAGRs of 11% and 8% over 2021-2026, respectively. Improving incomes, increased awareness of wipes, innovation and rise of e-commerce are also positive drivers of demand and sales.
In terms of new product development, while antibacterial properties remain a popular feature and focus of innovation, other product claims include natural, hypoallergenic, water-based, skin benefits and biodegradable. Recyclable packaging has also become more notable as the industry seeks to meet sustainability goals.
Significant Unmet Potential Amplifies Opportunities in Southeast Asia and China
Over the next five years, China and SEA are expected to see positive growth in sales of retail disposable hygiene, contributing close to 85% of absolute growth in the Asia Pacific region. While the changing demographic landscape might present a growing challenge to organic growth of baby diapers, increased consumer awareness of disposable hygiene products, improved affordability, habit persistence and product innovation will help drive the performance across disposable hygiene categories, especially in view of still significant unmet potential in the region. It is, however, also necessary to acknowledge economic and cultural nuances within each market in Southeast Asia and China in order to successfully address the needs and demands of local consumers.
Within the Asia Pacific region, China and Southeast Asia (SEA) collectively account for more than 70% of sales, with China accounting for the lion’s share. In 2021, China represented $28 billion in retail sales while SEA accounted for $6 billion, with Indonesia and Vietnam as the engines of growth in SEA.
Declining Birth Rates Across the Region Challenge Long-term Growth Prospects in Baby Diapers
Baby diapers are among the largest contributors to the retail disposable hygiene sales in Asia Pacific. However, demographic headwinds have curtailed the category growth, as markets across the region are being challenged by the declining birth rates. Indonesia—the country with the largest population in SEA—has seen its birth rate come down to 17 births per 1000 in 2021, compared to 18.8 five years ago. China’s birth rate dropped to eight births per 1000, down from 13 five years ago, representing over 11 million drop in the number of children ages zero to four. By 2026, China’s diaper population is estimated to be about two-thirds of what it was back in 2016.
A combination of family planning policies, changing social attitudes about family and marriage, increasing educational levels and rising labor force participation among women are among the key factors leading to the declining birth rates in the region. In May 2021, China announced the three-child policy, to reverse the aging population trend. It is still unclear whether the new policy will have a significant impact on the population. The country’s two-child policy introduced in early 2016 failed to generate a sustained upsurge of new births.
Despite a contracting consumer base, retail sales of baby diapers in the region are still expected to see a positive growth over the next five years, with disposable pants driving the growth. Given still low per capita consumption, compared to the developed countries, there is a room for organic growth. Pant format, despite higher pricing, shows healthy demand, owing to convenience and durability. Pants are increasingly becoming the preferred format among parents as they help support toilet training and foster a greater sense of independence. Manufacturers are also responding with new product development. In Indonesia, for instance, leading player Softex (now owned by Kimberly-Clark) introduced All-New Sweety Gold Pants NextGen in 2021, which promotes the freedom of baby movement.
With still low per capita consumption and a significant untapped consumer base in the region, the industry has an opportunity to drive further the market penetration through retail expansion, product innovation, and attractive pricing strategies. However, while innovation in premium segment through more sophisticated value-added products and pant format can help value growth in the category, affordable pricing strategies will remain crucial to wider product adoption.
Innovation and Education are Key to Driving Growth in Feminine Care
Feminine sanitary protection is the largest contributor to the retail disposable hygiene sales in Asia Pacific, in both value and volume terms. In SEA, where the female population aged 12-54 is expected to reach $189 million by 2026, the feminine care category is projected to grow at a CAGR of 5% between 2022 and 2026 to reach $1.9 billion. In China, on the other hand, feminine care faces a number of challenges, including already high per capita consumption of towels (pads)—the preferred format—and aging demographic. Subsequently, the category is expected to see only a modest growth ahead, chiefly led by trading up and premiumization.
Improving disposable incomes among women, as well as ongoing educational efforts by governments and non-profit agencies to address feminine health and hygiene have been helping to drive retail growth, along with the industry innovation.
Innovation efforts in the category are centered around product functionality and value-added features. In Indonesia, for instance, the leading player Softex launched a number of value-added products over the past couple of years, including Softex Celana Menstruasi - sanitary towels in pant format. The success of this format prompted other leading players to introduce similar products, such as Unicharm’s Charm Sleep Protect Panties. In China, market leader Sofy launched a new hybrid product in 2020, which uses proprietary Japanese technology and incorporates a body warming function into the sanitary towel that extends to the lower abdomen for added comfort. This kind of innovation, however, comes with a higher price tag and can limit growth prospects to upper income consumer groups.
Over the years, the region has also seen a growing concern around waste generated by feminine hygiene products and the need for more sustainable alternatives. Euromonitor International Voice of the Consumer: Health and Nutrition Survey released in 2021 revealed that 21% respondents across China, Indonesia and Thailand turn to reusable underwear, while 8% use reusable pads. While costs can be a consideration for turning to reusable products, more consumers are also looking for environmentally sustainable options. In Vietnam, local Vietnamese brand—Green Lady Vietnam—offers reusable sanitary products targeted at young environmentally conscious consumers. Also, Chinese lingerie brand NEIWAI and Uniqlo launched washable underwear as an alternative to disposable products. Even though retail sales of these products remain small, compared to disposable, reusable alternatives have been gaining traction. This trend poses both challenges and opportunities for the disposable feminine care brands to address the issue of sustainability through innovative products and packaging that would appeal to the eco-friendly consumer segment.
While innovation in functionality, material, formats and value-added benefits will remain among the drivers of growth in SEA and China, brands would need to find a balance between quality and pricing to draw more users from the vast low income consumer base that constitutes the main portion of the untapped consumer base.
Aging Population Trend Benefits Adult Incontinence
While still small in absolute value, retail adult incontinence is the most dynamic disposable hygiene category in Asia Pacific, registering upper single digit growth in 2021. While SEA and China are considered to be relatively young compared to more developed markets like Japan, the evolving demographic landscape and growing number of the elderly people provide a significant customer base to secure category growth.
In 2021, retail adult incontinence sales in SEA totaled $429 million, with projected CAGR value growth of 15% over 2021-2026. Indonesia is a primary contributor to growth in the SEA region. While the country’s share of population aged 65+ is not as significant as in countries like Singapore or Thailand, the substantially larger population base in absolute numbers creates abundant opportunities for organic growth. On the other hand, China ranks the second in market size across the Asia Pacific region, after Japan, with retail sales of $972 million in 2021. By 2026, China is expected to top Asia, with retail sales increasing by 18% CAGR over 2021-2026. Increasing penetration of retail disposable adult incontinence products in the country will be driven, among other factors, by the largest number of elderly in the world.
However, demographic shifts are not the only factors to consider when thinking about growth strategies for adult incontinence. Consumer awareness, social stigma and affordability remain among the key barriers to higher penetration in the region. These factors also often restrict the category to product formats designed for moderate/heavy incontinence, such as adult diaper which is typically seen as more cost efficient by consumers. Costs are also among the factors behind high usage of reusable adult incontinence products. Euromonitor International Voice of the Consumer, Health & Nutrition survey released in 2021 revealed that adult diaper remains the leading format used by consumers in China and Thailand, with 46% of respondents reporting the use in China and 31% in Thailand. At the same time, in China, 42% of respondents indicated the use of reusable adult incontinence products, in Indonesia—38%, and in Thailand—19%.
The survey also revealed a high proportion of respondents who use feminine menstrual products for adult incontinence protection—more than 30% of respondents in China, Indonesia and Thailand. These findings are indicative of further opportunities to drive specialized disposable adult incontinence protection use through product awareness, innovation and better access.
Innovation in adult incontinence across the region has been evolving around product functionality (e.g. breathability, absorbency), as well as thinness and discretion to address concerns related to social stigma. In Indonesia, Softex launched Confidence adult pants, touting discreet cut and style as well as “Flexible Move Tech” that allows for more movement flexibility while also being discreet. Furthermore, in China, Kimberly-Clark introduced the Poise brand in 2021, marketed primarily to Chinese women with light incontinence issues. Hangzhou Coco Healthcare also launched incontinence products targeting women, expanding incontinence product lines.
Preventative Hygiene Practices Remain on the Agenda and Support Demand for Wipes
Wipes benefited most from the pandemic in 2020, but pace of growth decelerated in 2021 as demand normalized. However, in per capita terms, wipes usage remains above the pre-pandemic levels. In value terms, SEA and China expect healthy growth to continue, with value CAGRs of 11% and 8% over 2021-2026, respectively. Improving incomes, increased awareness of wipes, innovation and rise of e-commerce are also positive drivers of demand and sales.
In terms of new product development, while antibacterial properties remain a popular feature and focus of innovation, other product claims include natural, hypoallergenic, water-based, skin benefits and biodegradable. Recyclable packaging has also become more notable as the industry seeks to meet sustainability goals.
Significant Unmet Potential Amplifies Opportunities in Southeast Asia and China
Over the next five years, China and SEA are expected to see positive growth in sales of retail disposable hygiene, contributing close to 85% of absolute growth in the Asia Pacific region. While the changing demographic landscape might present a growing challenge to organic growth of baby diapers, increased consumer awareness of disposable hygiene products, improved affordability, habit persistence and product innovation will help drive the performance across disposable hygiene categories, especially in view of still significant unmet potential in the region. It is, however, also necessary to acknowledge economic and cultural nuances within each market in Southeast Asia and China in order to successfully address the needs and demands of local consumers.
