Market Research India - Baby Care Market in India 2009

Baby Care Market ‐
Baby Care Market India
July 2009

Executive Summary

 Total baby care market in India valued at INR 15 bn in 2008; Estimated to reach INR 10.9 bn
Market  Market dominated by unorganized sector with organized sector making up 39% of total market
 Market comprises of four segments baby food, skin care, toiletries & diapers and hair care
 Market is presently restricted to urban areas and fast expanding to rural areas

Drivers: Challenges:
– Increase in disposable income – Competition from cheaper substitutes
Drivers & – Birth rate
Bi h – C l
Cultural aspects
l
Challenges – Increasing working women population – Regulations on Infant Food Promotion
– Introduction of innovative products and
reduction in prices

IIntroduction of organic baby product
d i f i b b d
Trends  Introduction of premium range of baby care products
 Expansion of market in rural areas
• Johnson & Johnson is the market leader in total baby care market with about 80% market share
• Major players in different segments are ‐
Baby Food Skin Care Toiletries & Diapers Hair Care
Competition
•Nestle • Johnson & Johnson •Kimberly Clark • Johnson & Johnson
•Wockhardt
W kh d •Wipro
Wi •P&G
P&G
•Amul •Godrej

BABY CARE MARKET – INDIA.PPT 2

•Market Overview
•Drivers & Challenges
Drivers & Challenges
•Trends
•Competition
•Key Developments


Baby care market in India is dominated by the unorganized
sector
Overview Organized Baby Care ‐ Market Size
•Total baby care market is valued at INR 15 bn
INR mn
y
in 2008 and is estimated to reach INR 28 bn by
15,000
2012 +17% 10,920
•Rising income levels, better product 10,000
5,900
availability and increasing awareness level is
5,000
driving the baby care products industry in
di i h b b d i d i
India 0
2008 2012
•At present the market is in nascent phase,
restricted to urban areas, with tremendous
restricted to urban areas, with tremendous Organized Vs Unorganized Split
growth potential
•Baby care product market in India is
dominated by Johnson & Johnson which Organized
39%
enjoys 80% market share in all categories
except massage oil and diapers 61%
Un organized


Baby food is the largest segment

Segment Products Penetration Size (2008)

Baby Milk
PC INR 2280
Baby Food
Baby Food Baby cereals
Baby cereals
Gaming mn
Baby Snacks

Soap
Massage Oil
Massage Oil
Powder INR 1840
Skin Care
Creams mn
Lotions
Baby Wash (liquid)

Toiletries & Diapers INR 1530
Diapers Wipes   mn

Hair Oil   INR 250
Hair Care
Shampoos mn

High Medium Low


Baby food segment is dominated by Nestle while Johnson &
Johnson dominates the skin care segment
Baby Food Market Market Size and Growth
•Baby food market comprises of products like
INR mn
baby milk , cereals and snacks
•In India the baby food industry is governed by 6,000 +20% 4,686
Infant Milk Substitutes (IMS) Act 4,000
•Baby food Industry is dominated by Nestle and 2,280
Wockhardt 2,000

0
2008 2012

Baby Skin Care Market
Baby Skin Care Market Market Size and Growth
Market Size and Growth
•Market comprises of products such as soaps, INR mn
massage oil , powder, creams, and lotions 4,000
+15% 3,220
•Major players in this segment includes
j p y g
Johnson & Johnson (J&J), Wipro, Dabur India 1,840
2,000
and JL Morrison (India)
•Products like soap and massage oil have high
penetration with year round usage
penetration with year round usage 0
2008 2012


Kimberly Clark leads in toiletries and diapers segment while
Johnson & Johnson dominates the hair care segment
Baby Toiletries & Diapers Market Market Size and Growth
•Market comprises of products such as wipes
INR mn
and diapers
3,000
3 000 +15% 2,670
2 670
•Disposable diaper market is at a nascent stage,
with extremely low consumption 2,000 1,530
•Leading players in this segment include 1,000
Kimberly Clark ,P&G and Godrej
Kimberly Clark P&G and Godrej
•Majority of Diaper brands are imported 0
2008 2012

Baby Hair Care Market
Baby Hair Care Market Market Size and Growth
Market Size and Growth
•Market comprises of products such as hair oil INR mn
and shampoos +8%
400 340
•Leading players in this segment include
gp y g
300 250
Johnson & Johnson
200
100
0
2008 2012


•Market Overview
•Trends
•Competition
•Key Developments



Challenges

Drivers
i Availability of cheaper substitutes

Increase in Disposable Income
Cultural aspects

Birth Rate
Regulations on Infant Food Promotion
Increasing Working Women
Population

Introduction of Innovative Products


Increase in disposable income has empowered Indian parents to
spend more on baby care products
Increase in disposable income Impact
• With economic growth driving incomes, the purchasing power will increase significantly across
all consumer groups creating one of the largest consumer groups globally
• Majority of the Indian families don’t consider baby products as an essential item and prefer
using home‐made food and adult personal care products for their babies. But with the increase
in disposable income, the middle and upper classes will be willing to spend more on their new ‐
borns

Total No. of Household (mn) Per household annual Aggregate Annual Disposable
income (INR ‘000) Income (INR tn)
281 Core target 90
244 3%
12% consumer
cons mer
2% 1% 24%
207 groups
5% 1% 1% 23%
34% Globals >1000 23%
44% Strivers 500‐1000 44
43% 15%
Seekers 200‐500 9%
34%
33% 24
9% 34%
Aspirers 90‐200
49% 13% 7%
30% Deprived <90 49% 33% 15%
18%
23% 9% 3%
2005 2015 2025 2005 2015 2025


Increasing birth rate has led to an increase in demand for baby
care products
Birth rate Impact
• India has about 25% more infants than China and almost six times more babies than the US
• Though Indian birth rate reduced slightly in 2008, Indian parents are spending more money on
their children compared to their earlier generations
Number of babies

India 359.6
China 270.1
Indonesia 67.5
USA 60.9
Pakistan 60.8
mn
0 50 100 150 200 250 300 350 400

Birth rates
%
30
23.28 22.32 22.32 22.01 22.69 22.22
20
10

0
2003 2004 2005 2006 2007 2008


Working women are key target segment for this industry

Increasing Working Women Population Impact
• About 17% of the Indian women are working making up ‐
 31% of the Indian workforce
 60% of all Metro homes
 30% of the IT workforce
• Almost 80% of urban working women work 6 days a week and 90%  of them are in regular full
time jobs
• Steady increase in the working women have helped the baby care industry as working mothers
Steady increase in the working  women have helped the baby care industry as working mothers
are spending more on baby care products
 Disposable diapers are offer convenience and ease of use, they can be disposed off in  trash when they're
used and they eliminate the need  to maintain  extra laundry thus offering savings in terms of time
Working women in IT sector
g Mean time spent on child care
p
‘000 5
4.2
3,000 3.9
2,237 4
2,110
2,000 1,621 3

671 2 1.3
13
1,000 421 563 1.1
1
0 0
2006-07 2007-08 2008-09e Urban Rural
Total Employees Non- Working Mothers
Women Employees Working Mothers


Reduction in prices and introduction of innovative products
driving the growth in baby care market
Introduction of New Products and Reduction in Prices Impact
• Innovation in diapers has helped in driving growth in baby care market in India
 Kimberly Clark Lever Pvt Ltd (KCL) is offering its Dri‐Fit diapers with 50 % more absorbent material using
super absorbent material (SAM) for its Huggies brand
b b t t i l (SAM) f it H i b d
 The New Huggies diapers not only absorbs more but also lasts longer
 KCL has innovated with cheaper variants of diapers in the form of Nappi‐pads which can be inserted inside
the cloth nappies
• Diapers when launched in India was priced at a premium making the product beyond the reach
of many customers
• Reduction in prices of diapers has led to expansion of diaper segment

Price of Diaper per piece
-50%

INR
20
20
10
10

0
1987 2008


Competition form cheaper substitutes and cultural aspects
impede industry growth
Competition from Cheaper Substitutes Impact
• Disposable diapers are still not affordable as the manufacturing requires huge capital and high
end technology
• In India, cost of diapers are very high in relation to the cost of labor
 Six diapers per day on a kid  cost INR  40‐60 per day working out to be INR 1200 to 2000 per month on
diapers alone. That is a major expense for a middle class family
 It is still possible to hire a maid at  a cost less than INR 4800 per month
• Cost conscious parents often use cloth diapers in the day and non woven diapers in the night
Cost conscious parents often use cloth diapers in the day and non‐woven diapers in the night
• Many Indian parents, in order to save cost, use their own personal care products for babies thus
restricting the growth of baby care products market

Cultural Aspects
Cultural Aspects Impact
• Indian consumer, in general, has an attitudinal barrier towards disposables, which is one of the
main impediments in the growth of this market
 Indian mothers are cost‐conscious and prefer recycling most of the products used for household. The same
applies to the products used for babies too. This acts as a main barrier towards disposable diapers in India
applies to the products used for babies too This acts as a main barrier towards disposable diapers in India
 Many parents believe that cloth diapers are better choice and does not cause any rashes
 Disposable diapers' usage is mainly restricted to out‐of‐home occasions
• In baby food segment also, many parents prefer feeding babies with home‐made food rather
than buying baby food products from the market
than buying baby food products from the market


Regulations on marketing and promotion of infant food hinder
the growth of baby food segment
Regulations on Infant Food Promotion Impact
•In India, marketing of baby milk and other infant food products is restricted
•Baby food manufacturers have to adhere to the regulations laid down under The
•Baby food manufacturers have to adhere to the regulations laid down under “The
Infant Milk Substitutes, Feeding Bottles and Infant Foods Act “
 Act defines “infant milk substitute” as any food being marketed or otherwise represented as
a partial or total replacement for mother’s milk, for infant up to the age of two years
 Act Prohibits the advertisement of infant milk substitutes and feeding bottles
 Act prohibits manufacturers from using  health care system for distribution or  promotion of
the infant milk substitutes or feeding bottles or infant foods
 Act makes it mandatory for manufacturer to display :
– A statement “mother’s milk is best for your baby” in capital letters
– a warning that infant milk substitute or infant food is not the sole source of nourishment of an infant
– Instructions for  appropriate preparation & warning against consequences of inappropriate preparation


Trends

•Market Overview
•Trends
•Competition
•Key Developments


Introduction of Organic Baby Products

Trends ` Introduction of premium range of baby care products

Expansion of market in rural areas


Introduction of organic baby care products has helped in
expanding the scope of the market
Introduction of Organic Baby Products
• Many baby product manufacturers are offering organic baby products in India
• Organic baby products are similar to the regular ones, except that no chemical fertilizers, Organic baby
Organic baby
pesticides, preservatives, antibiotics, hormones and others are used while producing  them care products in
demand
Company Products
Aditya Birla Group • Puretta, 100% natural and biodegradable baby care wipes
• Wipes are alcohol free, hygienic, hypoallergenic and dermatologically tested
• Wipes are made  from Cellulose, a 100% natural and biodegradable fibre, it soothes
the baby’s tender skin with its soft and nature‐friendly properties
Emami • Range of products manufactured using  natural ingredients such as neem, aloe vera,
honey, saffron, gold, silver, almond and oil using ayurvedic recipes as opposed to
honey saffron gold silver almond and oil using ayurvedic recipes as opposed to
chemicals
Kräuter • Range of herbal baby care products
• Herbal baby care products are priced 10 ‐ 15% higher than non‐herbal products
• To ensure the quality of its products, the company sources 70% of its raw materials
from its own farms in Manesar, Najafgarh and a few other locations

Pristine Organics • The organic baby foods are sold under the brand name 'First Bites.'
• These include milk cereal and multigrain products varieties
• The baby food contains no preservatives or additives


Players introducing premium range of products and focussing on
rural areas for growth
Introduction of Premium range of Baby Care Products
• International brands such as Avent, Nuby and Tenderils are planning to introduce specialized
premium baby care products in the Indian market Premium
products
products
• Nuby is planning to launch  25 premium products under the brand Nuby Natural Touch in the broadening the
Indian market scope of the
• Consumer electronics and lifestyle products company Philips, is planning to launch its Avent market
brand with specialized mother and baby‐care products in India next year
 The brand includes products ranging from milk bottles to skin care range and is currently sold in countries
The brand includes products ranging from milk bottles to skin care range and is currently sold in countries
like the UK, US, Spain and Italy

Expansion of market in rural areas
• About three quarters of the Indian population reside in the rural areas
• Indian rural market is growing at 3‐4% p.a., adding more than 1 mn new consumers every year
• Rural India  accounts for almost 50% of the volume consumption of fast‐moving consumer goods
in India Market
expanding to
• Many Baby Care Product manufacturers are targeting rural areas for further growth:
rural areas
rural areas
 Dabur, is banking on the country’s rural and semi‐urban areas for growth in the baby care segment
 Dabur has three products in its portfolio, which includes  Dabur Lal Tel, which has an overall market share of
over 25%
 Dabur is planning to increase its spend in rural areas by 15 to 20% in FY 2010
 Emami is planning to improve its foothold in rural areas in the baby care range
p g p y g


•Market Overview
•Trends
•Competition
•Key Developments


Baby care market is dominated by Johnson & Johnson

Competition Overview Market Share ‐ Overall
• Johnson & Johnson is the market leader in total baby 0thers
care market with about 80% market share 13%
Wipro Babysoft
• The leading brands in the baby food market includes 7%
Nestle Cerelac and Nestum, Wockhardt’s Farex
• In baby toiletries segment, the diapers are primarily
dominated by imported brands
•M k
Market comprises of mainly urban areas however
i f i l b h 80%
baby product companies are now focusing on rural
areas Johnson and Johnson

Market Share ‐ Baby Food Market Market Share ‐ Diapers
Others Snuggy ( Godrej)
Wockhardt
5% 10%
15%

Pampers (P&G) 30%
60%
80%
Nestle
Huggies (Kimberly Clark)


Players (1/7)

Company Name Food Skin Care Toiletries Hair Care Business Description

Actifit • The company is based in Mumbai
 • The company  manufactures and exports, baby diapers,
adult diapers and other hygiene products

Amul • It manufactures baby  milk powder which is sold under the
brand name Amulspray
• Amul is planning to increase its production capacity it is
 planning to setup additional processing facilities in Delhi
and Mumbai

Dabur
Dabur • Dabur's baby range of products made with Ayurvedic herbs
Dabur s baby range of products made with Ayurvedic herbs
and plant extracts

  • Baby products include Dabur Lal Tel, Janma Ghunti and
Gripe Water
g g p
• Dabur is targeting  rural areas for expansion
Financial Performance:
• The company reported total income  of INR 3.16 bn and a
net loss of INR 777 mn in FY09

Note: This list is not exhaustive


Players (2/7)


Emami • It markets its products under the brand name “The Healthy
and Fair”
• It entered the Baby Care segment in June 2009
• In first phase it has launched oil, soaps and talcum powder
 • In subsequent phase it will launch creams, lotions &
shampoos
• Its offerings are priced 35% lesser than its competitors
• The company is looking to garner INR 1‐1.20 bn from baby
care segment in next 3‐4 years
• It recorded a total income of INR 6.04 bn and net profit of
INR 927 mn in FY 08
Godrej • Godrej manufactures diapers under the brand name Snuggy
p y p
• It plans to extend the brand to other baby care products
 Financial performance:
• Reported total income of INR 9.2 bn in FY09 and a net profit
of INR 186.8 mn in FY 09



Players (3/7)


Hygiene • It market Diapers under the brand name Koochees
Wear Intl • It manufactures diapers through a joint venture between
 Hygiene Wear International and Braco Manufacturing
Company, USA
• The company is based in Indore
Infantino • Company is based in Chennai
p y
   • It markets its products under the name Anakku brand

Johnson and • It established and R&D centre in Mumbai in April 2009
Johnson
Johnson • It has a website babycenter in for promoting baby care
It has a website babycenter.in for promoting baby care
(J&J) • The website is targeted at expectant and new mothers and
   covers aspects ranging from the various stages of pregnancy
to caring of infants.
• J&J plans to introduce an online store in its Indian website
J&J plans to introduce an online store in its Indian website
• The company recorded total sales of INR 3060 bn and a net
profit of INR 622 bn in FY08



Players (4/7)


JL Morrison • The company is based in New Delhi
• JL Morison India markets its products under brand name
 Morison Baby Dreams
• Its products include Baby oil, nappy cream, soothing
powder, nourishing bath soap and moisturizing baby bath
• The company was  erstwhile licensee of the Nivea brand
Kimberly • It is a 50: 50 Joint Venture between Kimbely Clark and
Clark Lever Unilever
• It Sells Diapers  under brand name Huggies
 p y p
• The company  has innovated with cheaper variants in the
form of Nappi‐pads
• The company has innovated its  Dri‐Fit diapers with 50 %
more absorbent material using super absorbent material
Maneesh
Maneesh • It is a Mumbai based company
p y
Pharmaceuti   • It  has signed an exclusive licensing agreement with  Disney
Consumer Products in February 2009
cals
• Under the agreement, it markets  Symle range of baby care
products of the  Disney Baby brand



Players (5/7)


Marico • It entered baby care market in September 2005 with the
introduction of Sparsh baby oil
 Financial Performance:
• It recorded a total sales of INR 19.02 bn and net profit of
INR 1.43 bn in FY09
Nestle • It markets its products under the brand names
p
 Nido and Lactogen for milk
 Cerelac and Nestum for cereals
• In 2003 Nestle launched Nestle Development Nutrition Plan
 for infants and has launched its infant foods graded to the
needs of infants in each stage of the plan
Financial performance:
• It recorded total income of INR 43.89 bn and net profit of
INR 5.34 bn in FY 08
Nobel • The company is based in Mumbai
Hygiene  • It markets its diapers under the brand name Teddyy



Players (6/7)


Nuby • Company plans to come up with comprehensive range of
baby cutleries and toiletries
• Company plans to come up with organic baby food products
 • It is in the process of setting up new facility in Noida
• The company has tied up with retail majors such as
Spencer’s, Big Bazaar, Apollo Pharmacy, Lifestyle, Heritage
Stores  for expanding its reach
Procter & • Introduced Pamper brand in Indian market in December
Gamble 2006
• The manufacturing centre for Pampers is based in Bangkok.
• Diapers are available in 3 sizes
 • The company is planning to organize door to door efforts for
consumer education  and organize events with the medical
community
Financial Performance :
• The company reported net  sales of INR 6,450 mn and net
profit of INR 1,314 mn  in FY 08



Players (7/7)


Raptakos, • It is based in Mumbai
Brett & Co.
 • It markets its infant milk under the brand name Lactodex

Wockhardt • In 2006 it acquired Dumex India Pvt Ltd along with its two
products Protinex and Farex
• It already owns Dexolac, Nusobee and Firstfood brands
 • Wochardt plans to reposition the Farex brand
Wochardt plans to reposition the Farex brand
• It plans to launch Farex in different flavours
Wipro • Wipro Markets its products Diapers , Soaps ,oil, Talcum
Babysoft Powder under brand name of Babysoft
• It launched an economy range of diapers in June 2008
It launched an economy range of diapers in June 2008
• In order to build its brand Wipro Baby Soft has launched an
information program in hospitals, providing valuable
information on pregnancy, child birth and baby care through
  the use of posters and leaflets. It is also sponsoring regular
p p g g
'Healthy Baby Contests' at retail outlets
• It recorded total revenues of INR 254 bn and net profit of
INR 34,415 in FY 09



•Market Overview
•Trends
•Competition
•Government Regulations
•Key Developments


Key Developments

Date Development
17‐Jun‐2009 Emami launched its ayurvedic `Healthy & Fair' range of baby care products

1‐May‐2009 Nuby of USA, a manufacturer of infant care products launched its latest baby care products in India
Nuby of USA a manufacturer of infant care products launched its latest baby care products in India
8‐ April‐2009 Mahindra Retail launched its "Mom and Me" store, which specialises in products related to infant and
maternity care, in the national capital region
28‐Feb‐2009 Maneesh Pharmaceuticals Ltd (MPL) has signed an exclusive licensing agreement with  Disney
Consumer Products. Under the agreement, MPL will market its Symle range of baby care products
d d h ll k l fb b d
under the  Disney Baby brand. The  Baby range includes oil, soap, baby massage oil, bath, shampoo,
talc powder, wet wipes and lotion
28‐Feb‐2009 Johnson and Johnson, has launched 'Top‐to‐Toe' wash for the new born infants. The product prevents
trans epidermal water loss in infants which means that the moisture of the baby's skin will be
infants, baby s
maintained even after the bath


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Market Research India - Baby Care Market in India 2009

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