CMR has released the CMR Initial Market Guidance (IMG) report on the baby diapers sector that construes the big picture and captures current demand and supply drivers; opportunities and challenges. The market for baby diapers in India will reach US$707 Million by 2020, growing at an impressive CAGR of 21%, from US$303 Million in 2016. The penetration of disposable diapers stands at 3%, and >80% of the diapers market is controlled by the top three market participants. The key business driver for baby diapers in India is increasing disposable incomes, coupled with increasing awareness on sanitation. The rising proportion of working urban population, currently at 160 million with an annual average wage of US$3000, is driving the growth of the diapers market.Another factor for rising diaper consumption is the eCommerce channel, which is increasingly being used by the millennial population. Greater convenience and lower costs are driving diaper sales on eCommerce platforms.As it stands,millennials are driving the sales for premium, imported diapers online. In rural India, the increasing literacy levels have contributed to adoption of baby diapers. As a result, rural India is seeing more uptake than before. There is an ever-growing awareness about baby’s health. More women in the workforce, growing at 5.6% annually, are also boosting the growth of the baby diapers market. Lastly, technology has been instrumental in development of new, novel baby diapers that have positively impacted the India market. The market is benefiting from new technological advances resulting in novel baby diapers with superior properties. The baby diapers market has benefited from improved supply-side infrastructure; thrust on technology-led cost-efficiencies; and from the awareness campaigns run by market participants. The baby diapers market in India comprises of market leaders, niche brands and Eco-friendly brands. The leading players include Unicharm, P&G, and Kimberly-Clark. For capturing the leadership position in a market, one has to rewrite the rules of the competition by spotting new, untapped opportunities, and capitalize on them. Unicharm has done that precisely in India by introducing new innovations into the market. They focused on both new market development and market expansion, and in the process, made the competition follow suit. In terms of raw materials, there is a continuous challenge for non-woven suppliers to deliver cost competitive diaper fabrics with the specific functional performance and aesthetic properties.Suppliers have secured flexibility from diaper manufacturers to change raw material formulations to accomplish cost efficiencies while maintaining high performance standards.

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An ISO 9001: 2008 Company
BABY
DIAPERS

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India:
Emerging
Trends
Increasing
presence
of
women
in
workforce
with
urban
female
work-­‐force
par7cipa7on
rate
growing
5.6%
annually.
Increasing
purchasing
power,
customer
aspira7ons
and
reduc7on
in
diaper
prices
26M
Babies
are
born
in
India
every
year.
5.6%

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India:
Market
Size
[Source:
CMR
Analysis
and
Industry
Es7mates]
Indian
Baby
Diapers
Market
Size
US
$
300M
3%
Penetra7on
of
Disposable
Diapers
in
India
80-­‐85%
Market
controlled
by
top
3-­‐4
players.
B R A N D E D
D I A P E R S
I M P O R T E D
D I A P E R S
Market
Segments:

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COST
CONVENIENCE
COMFORT
SUCCESS
Value
Proposition
in
India
In
India,
parents
look
at
three
factors
when
buying
a
diaper:

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India:
Market
Share
56%
2013
[Source:
CMR
Analysis
and
Industry
Es7mates]
The
Mamy
Poko
Pant
capitalized
on
its
simple
pull-­‐up
kind
of
diaper,
instead
of
tape
like
s7ckers.
Lower
price
and
higher
margins
catapulted
the
brand
to
the
top.
18%
18%
47%
17%
34%
2015
ShiQing
Fortunes:
2013
to
2015

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India:
Market
Share
Breakdown
34%
57%
17%
3%
Others
[Source:
CMR
Analysis
and
Industry
Es7mates]
In
2015,
Unicharm
gained
ground,
while
P&G
and
K-­‐C
lost
their
market
share.

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Demand/Supply
Side
Drivers
Increasing
awareness
and
penetra7on
in
rural
markets
More
women
in
the
workforce
than
ever
before
Greater
hygiene
awareness
Increase
in
purchasing
power
Thrust
on
innovaUon
and
cost
efficiencies
by
new
market
entrants.
Improved
supply-­‐side
infrastructure
Awareness
generaUon
by
diaper
manufacturers
on
TV
Digital
is
boosUng
diaper
sales
with
next-­‐day
deliveries
D
S

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Taped
Diapers
Diaper
Pants
Swim
Diapers
India:
Diaper
Types
Cloth
Diapers
Sizes:
S,
M,
L
and
XL.
Prices
(in
INR):
270
to
2000

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India:
Competitive
Landscape
MARKET
LEADERS
P R IVAT E
L A BE L S
ECO -­‐ F R I E N D LY
BR A N D S
OT H E R
BR A ND S

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Diaper:
Material
Trends
SOFTNESS
ABSORBENCY
BODY-­‐
HUGGING
FIT
Three
key
thrust
areas
for
diaper
manufacturers
Con7nuous
challenge
for
non-­‐woven
suppliers
to
deliver
cost
compe77ve
fabrics
with
the
specific
func7onal
performance
and
aesthe7c
proper7es.
There
is
a
clear
focus
on
achieving
op7mized
absorbent
cores
with
improved
performance
in
fluid
acquisi7on/distribu7on
materials.
Suppliers
have
secured
flexibility
from
diaper
manufacturers
to
change
raw
material
formula7ons
to
accomplish
cost
efficiencies
while
maintaining
high
performance
standards.

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India:
Key
Influencers
Family
and
Friends
TV
Adver7sements
Internet:
Social
Media
and
Websites
Paren7ng
Magazines
[Source:
CMR
Analysis
and
Industry
Es7mates]
The
key
influencers
driving
diaper
sales
in
India
include:

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Digital
Diapers
Greater
convenience
and
lower
costs
are
driving
diaper
sales
on
ecommerce
placorms.
eCommerce
in
India
is
emerging
as
a
channel
for
premium
imported
diaper
products,
catering
to
rich
Indians.

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India:
Diaper
Capacity
Expansions

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India:
Diaper
Market
Forecast
[Source:
CMR
Analysis
and
Industry
Es7mates]
2016
2018
2020
[In
US
$/Million]
2017
2019
CAGR
21%

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CMR
Cognitive
360™
D E M A N D
The
baby
diaper
market
in
a
country
takes
off
when
per
capita
GDP
breaks
through
the
US
$3,000
level.
India
is
an
afrac7ve
market,
and
poised
for
take
off.
With
increasing
awareness,
this
is
the
right
7me
for
new
companies
to
enter
India.
D E L I V E RY
Companies
with
premium
diapers
will
achieve
success
even
with
ecommerce
only
channels.
Same-­‐day
diaper
delivery
will
be
a
game
changer
in
the
India
market.
D I S C OV E RY
In
diapers,
brand
loyalty
is
fickle.
Its
useful
to
constantly
assess
and
discover
drivers
underlining
customer
behavior
through
user
research
studies.
Note:
CMR
Cogni7ve
360
provides
a
clear
view
and
guidance
on
what’s
next
for
businesses
focused
on
the
target
market.
D E L I V E RY
India
is
ripe
for
a
door-­‐to-­‐door
diaper-­‐
delivery
service,
shipped
weekly
or
fortnightly,
in
Tier-­‐
1
and
Tier-­‐2
ci7es.

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About
CMR
CMR
is
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bou7que
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enables
its
clients
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find
answers
to
its
most
pressing
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and
challenges,
through
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research,
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services.
This
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glance:
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Ram
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M:
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CONSULTING
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