BABY AND CHILD-SPECIFIC PRODUCTS IN INDIA

Euromonitor International September 2012

BABY AND CHILD-SPECIFIC PRODUCTS IN INDIA

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LIST OF CONTENTS AND TABLES

Headlines ..................................................................................................................................... 1 Trends .......................................................................................................................................... 1 Competitive Landscape ................................................................................................................ 2 Prospects ..................................................................................................................................... 2 Category Data .............................................................................................................................. 3 Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Sales of Baby and Child-specific Products by Category: Value 20062011 ............................................................................................................. 3 Sales of Baby and Child-specific Products by Category: % Value Growth 2006-2011 ....................................................................................... 3 Baby and Child-specific Products Premium Vs Mass % Analysis 2006-2011 .................................................................................................... 4 Baby and Child-specific Products Company Shares 2007-2011 .................. 4 Baby and Child-specific Products Brand Shares 2008-2011 ........................ 4 Baby and Child-specific Skin Care Brand Shares 2008-2011 ...................... 5 Forecast Sales of Baby and Child-specific Products by Category: Value 2011-2016 .......................................................................................... 5 Forecast Sales of Baby and Child-specific Products by Category: % Value Growth 2011-2016 ............................................................................. 6 Forecast Baby and Child-specific Products Premium Vs Mass % Analysis 2011-2016...................................................................................... 6

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BABY AND CHILD-SPECIFIC PRODUCTS IN INDIA

HEADLINES
Baby and child-specific products increases by 14% in current value terms in 2011, to reach Rs6.7 billion Baby and child-specific products is driven mainly by rising penetration in second-tier and thirdtier cities Unit prices of baby and child-specific products increase by 9% in 2011 Johnson & Johnson (India) continues to be the largest player in baby and child-specific products, accounting for three quarters of value sales in 2011 Baby and child-specific products is expected to increase by a constant value CAGR of 5% during the forecast period 2011-2016

TRENDS
New pockets of demand in second-tier and third-tier cities such as Jaipur and Kanpur, and growing acceptance amongst rural consumers due to increased awareness, propelled sales of baby and child-specific products in 2011. Media and promotional campaigns by companies such as Johnson & Johnson (India) played a significant role in pushing these products to rural consumers. In addition, urban consumers started to switch to organic and herbal products, due to growing concerns about their babies health. Baby and child-specific products increased by 14% in current value terms in 2011, compared with a CAGR of 10% over the review period. The higher growth in 2011 was mainly due to the growing acceptance and use of baby and child-specific products in second-tier and third-tier cities. Moreover, the higher birth rate in 2011 compared with the review period pushed sales even higher. Baby wipes continued to grow at the fastest followed by baby and child-specific toiletries in 2011. The fatser growth in baby wipes was mainly attributed to the growing hygiene concerns amongst urban mothers. Addtionally, toiletries witnessed high growth due to the growing use of baby and child-specific toiletries in second-tier and third-tier cities and the strong push from rural areas. Average unit prices of baby and child-specific products continuously increased due to the launch of premium products, which are readily being accepted by consumers. The launch of herbal and organic products in baby care pushed unit prices even higher. Baby wipes continued to perform well in 2011 due to growing hygiene concerns amongst females which lead to the increased uptake of baby wipes. However, the use of baby wipes remains largely restricted to urban consumers. Mass brands such as Johnsons Baby and Dabur continued to dominate baby and child specific products in 2011. Premium baby and child-specific products remained a niche in India; however, it picked up at a rapid pace in 2011. Premium organic baby and child-specific toiletries witnessed widespread acceptance in urban areas, facilitated by growing purchasing power amongst urban women. Childrens soaps such as Doy Care from VVF performed well; however, they registered slower growth compared with baby care products. Manufacturers focused more on baby care

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products compared with child-specific products. However, other manufacturers, such as Emami, announced plans to launch child-specific products by 2013. The company also announced plans to test-market talcum powder for children under its flagship brand Boroplus in 2011. With Indian consumers shifting to herbal brands, natural and organic baby care started to pick up rapidly in 2011. For instance, companies such as Kruter Healthcare, which focus on herbal baby products, witnessed rapid growth despite higher prices.

COMPETITIVE LANDSCAPE
Johnson & Johnson (India) continued to lead baby and child-specific products, accounting for a 75% value share in 2011. The company pioneered baby products in India, and it still benefits from the trust that it has built over the years. Smaller brands, including Kimberly-Clark Levers Huggies brand and Pigeon witnessed the biggest increase in value share in 2011. This can be attributed to the rapid increase in sales of baby wipes by Huggies, driven by growing health and hygiene concerns amongst urban consumers. International manufacturers such as Johnson & Johnson continued to rule baby and childspecific products in 2011. However, domestic manufacturers, including The Himalaya Drug Co and Kruter Healthcare, continued to launch new products in toiletries, and increased rapidly. Emami launched a range including baby massage oil, baby shampoo and baby powder in June 2012. The entire range of products is based on ayurvedic ingredients, which outperformed overall baby care. No significant advertising campaigns were carried out to promote baby care products, and baby care relies more on trust and word of mouth marketing. However, Johnson & Johnson organised an awareness campaign to educate consumers in rural areas in 2011. Packaging in baby and child-specific products remained the same in 2011. Most childrens soaps continued to be packaged in attractive colours, and baby care products continued to be light-coloured to give them a gentle appearance. Baby care continued to be dominated by mass products in 2011. Indian consumers are much more familiar with mass brands such as Johnsons Baby and Hi malaya, and these mass baby care brands have long been trusted by Indian families in terms of their quality. However, premium baby care products, including products such as Garfield Baby India from Zen Hygiene have started to pick up gradually in urban areas such as Mumbai.

PROSPECTS
With baby and child-specific products moving towards premium and herbal products, the category is likely to witness a range of new launches from international players. The leading players in herbal baby care products, including Kruter Healthcare, are expected to increase strongly, in line with the growth in herbal baby care. Many international players are likely to make a foray into the category to leverage the potential growth in the forecast period. This potential growth is well-supported by demographic and socioeconomic factors, including a healthy birth rate and an increasing number of consumers willing to spend more on baby and child-specific products. Baby and child-specific products is expected to increase by a constant value CAGR of 11.4% in the forecast period, compared with a current value CAGR of 10% in the review period.

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Growth during the forecast period is likely to be driven by faster growth in baby skin care and baby toiletries. The availability of cheaper alternatives in baby toiletries, such as home-made oils, coupled with the traditional consumer mindset, which discourages the use of chemical-based products for babies, might threaten growth in baby and child-specific products during the forecast period. Baby skin care is expected to outperform overall baby and child-specific products in terms of constant value growth in the forecast period, largely due to the growing shift towards premium and organic baby skin care products amongst urban consumers. Urban consumers are moving away from chemical-based products, especially for the skin, which is considered to be very sensitive and delicate. Average unit prices are likely to continue rising during the forecast period, mainly due to the launch of organic and premium brands in baby care. Since Emami enjoys brand equity in India, and in Calcutta in particular, new launches by the company are expected to perform well. The new range of products is ayurvedic, and is available at lower prices, further driving sales. Herbal baby care is picking up rapidly, and other existing herbal baby care manufacturers, such as The Himalaya Drug Co and Kruter Healthcare are expected to launch new products. Leading companies such as Johnson & Johnson and Hindustan Unilever are likely to make efforts to penetrate rural India, which has huge growth potential. Such companies will start initiatives to educate rural consumers on child hygiene and care in order to penetrate rural India. In addition, companies such as Emami are likely to launch products specific for children above the age of five, to leverage the existing gap in baby and child-specific products.

CATEGORY DATA
Table 1 Rs million 2006 Baby and Child-specific Hair Care Baby and Child-specific Skin Care Baby and Child-specific Sun Care Baby and Child-specific Toiletries Baby Wipes Nappy (Diaper) Rash Treatments Medicated Baby and Child-specific products Baby and Child-specific Products
Source:

Sales of Baby and Child-specific Products by Category: Value 2006-2011

2007 680.0 2,133.0 1,778.9 15.3 4,607.1

2008 723.2 2,300.3 1,930.0 18.4 4,971.8

2009 776.7 2,502.9 2,098.7 22.9 5,401.2

2010 838.0 2,736.1 2,292.7 27.9 5,894.7

2011 950.2 3,127.5 2,633.5 35.2 6,746.4

634.4 1,959.7 1,626.8 12.7 4,233.7

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 2

Sales of Baby and Child-specific Products by Category: % Value Growth 2006-2011

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% current value growth 2010/11 Baby and Child-specific Hair Care Baby and Child-specific Skin Care Baby and Child-specific Sun Care Baby and Child-specific Toiletries Baby Wipes Nappy (Diaper) Rash Treatments Medicated Baby and Child-specific products Baby and Child-specific Products
Source:

2006-11 CAGR 8.4 9.8 10.1 22.5 9.8

2006/11 Total 49.8 59.6 61.9 175.9 59.3

13.4 14.3 14.9 26.1 14.4

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 3 % retail value rsp

Baby and Child-specific Products Premium Vs Mass % Analysis 2006-2011

2006 Premium Mass Total

Source:

2007 0.0 100.0 100.0

2008 0.0 100.0 100.0

2009 0.0 100.0 100.0

2010 0.0 100.0 100.0

2011 0.0 100.0 100.0

0.0 100.0 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 4 % retail value rsp Company

Baby and Child-specific Products Company Shares 2007-2011

2007 76.0 11.6 3.4 2.0 0.8 0.5 0.4 0.2 5.1 100.0

2008 76.1 11.6 3.4 2.1 0.8 0.5 0.5 0.3 4.9 100.0

2009 76.2 11.1 3.3 2.1 0.8 0.5 0.3 0.3 5.3 100.0

2010 75.8 11.3 3.2 2.2 0.9 0.5 0.4 0.3 5.5 100.0

2011 74.9 11.3 3.0 2.2 0.9 0.5 0.4 0.3 6.5 100.0

Johnson & Johnson (India) Ltd Dabur India Ltd Wipro Ltd VVF Ltd Himalaya Drug Co, The Karnataka Soaps & Detergents Ltd Oriflame India Pvt Ltd Tainwala Personal Care Products Ltd L'Oral India Pvt Ltd Others Total
Source:

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 5 % retail value rsp Brand Johnson's Baby

Baby and Child-specific Products Brand Shares 2008-2011

Company Johnson & Johnson

2008 76.1

2009 76.2

2010 75.8

2011 74.8

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Dabur Lal Tail Doy Wipro Baby Soft Oil Wipro Baby Soft Soap Himalaya Moisturising Baby Soap Mysore Sandal Baby Soap Himalaya Gentle Baby Shampoo Fresh Ones Oriflame Baby Care Dabur Baby Olive Oil Garnier Ultra Doux Others Total
Source:

(India) Ltd Dabur India Ltd VVF Ltd Wipro Ltd Wipro Ltd Himalaya Drug Co, The

11.1 2.1 1.7 1.7 0.5

11.1 2.1 1.7 1.6 0.6

11.3 2.2 1.6 1.6 0.6

11.3 2.2 1.5 1.4 0.6

Karnataka Soaps & Detergents Ltd Himalaya Drug Co, The Tainwala Personal Care Products Ltd Oriflame India Pvt Ltd Dabur India Ltd L'Oral India Pvt Ltd

0.5 0.3 0.3 0.3 0.5 5.0 100.0

0.5 0.3 0.3 0.2 5.4 100.0

0.5 0.3 0.3 0.3 5.7 100.0

0.5 0.3 0.3 0.3 6.7 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 6 % retail value rsp Brand

Baby and Child-specific Skin Care Brand Shares 2008-2011

Company Johnson & Johnson (India) Ltd Dabur India Ltd Johnson & Johnson (India) Ltd Johnson & Johnson (India) Ltd Wipro Ltd Oriflame India Pvt Ltd Dabur India Ltd

2008 36.6 24.0 20.8 10.3 3.6 0.3 1.1 3.3 100.0

2009 36.8 24.0 21.3 10.5 3.6 0.2 3.6 100.0

2010 37.0 24.3 21.5 9.8 3.5 0.2 3.7 100.0

2011 37.4 24.5 21.5 9.0 3.3 0.2 4.2 100.0

Johnson's Baby Cream Dabur Lal Tail Johnson's Baby Oil Johnson's Baby Lotion Wipro Baby Soft Oil Oriflame Baby Oil Dabur Baby Olive Oil Others Total
Source:

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 7

Forecast Sales of Baby and Child-specific Products by Category: Value 20112016

Rs million 2011 Baby and Child-specific Hair Care Baby and Child-specific Skin Care Baby and Child-specific Sun Care Baby and Child-specific Toiletries Baby Wipes 950.2 3,127.5 2,633.5 35.2 2012 985.1 3,262.3 2,758.0 40.0 2013 1,028.8 3,435.4 2,885.5 46.4 2014 1,086.0 3,638.1 3,028.4 54.3 2015 1,139.9 3,847.1 3,163.9 63.7 2016 1,197.3 4,083.6 3,307.9 74.7

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Nappy (Diaper) Rash Treatments Medicated Baby and Child-specific products Baby and Child-specific Products
Source:

6,746.4

7,045.5

7,396.2

7,806.8

8,214.5

8,663.5

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 8

Forecast Sales of Baby and Child-specific Products by Category: % Value Growth 2011-2016

% constant value growth 2011-16 CAGR Baby and Child-specific Hair Care Baby and Child-specific Skin Care Baby and Child-specific Sun Care Baby and Child-specific Toiletries Baby Wipes Nappy (Diaper) Rash Treatments Medicated Baby and Child-specific products Baby and Child-specific Products
Source:

2011/16 TOTAL 26.0 30.6 25.6 112.4 28.4

4.7 5.5 4.7 16.3 5.1

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 9

Forecast Baby and Child-specific Products Premium Vs Mass % Analysis 2011-2016

% retail value rsp 2011 Premium Mass Total

Source:

2012 0.0 100.0 100.0

2013 0.0 100.0 100.0

2014 0.0 100.0 100.0

2015 0.0 100.0 100.0

2016 0.0 100.0 100.0

0.0 100.0 100.0

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

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