Wednesday, September 25, 2013
Unicharm To Make Diapers In China For Upper-Income Bottoms
TOKYO (Nikkei)--Unicharm Corp. (8113) plans to produce top-end disposable baby diapers next year in China to broaden its consumer base in Asia's largest market.
The company aims to lift global sales by 72% from the projected figure for this fiscal year to 1 trillion yen in the year through March 2017.
To date, Unicharm has focused on standard disposable diapers for China's huge middle class. But its roughly 15% share of the country's disposable diaper market pales in comparison with the more than 30% share held by American giant Procter & Gamble Co. and is only three percentage points higher than U.S.-based Kimberly-Clark Corp., which has been making strides by offering top-of-the-line diapers.
With Chinese incomes rising, especially in coastal regions, demand is growing for high-quality diapers. Unicharm began selling pricier Japanese-made diapers online in China this year, finding strong support among wealthy consumers who, despite the relatively high price of 3 yuan apiece, appreciate the product's softness and breathability.
To better compete in this high-end market, Unicharm will install a line at a local factory next year to manufacture diapers of the same quality as those made in Japan. Local production will enable the firm to price the diapers more competitively with rival products.
In another move to boost business in China, Unicharm will upgrade its locally manufactured MamyPoko brand of standard diapers by October. The diapers will feature 20% greater absorbability but will sell for the same price, 1.5 yuan. They will be targeted at middle-class consumers who cannot afford the pricier diapers but want better quality.
Meanwhile, Unicharm is also stepping up its activities in India. It expects that a second factory slated to begin operating next fiscal year will help turn the Indian operations into the black in the year through March 2016. And it is hurrying to build a third factory so it can expand its diaper sales nationwide.
(The Nikkei, Sept. 25 morning edition)