Tuesday 16 April 2013

Europe and Asia Nonwoven Market Update

Ian Bell, Tissue and Hygiene Research Manager at Euromonitor observed that Western Europe’s share of the global nonwoven market had fallen from 26% in 2002 to 19% in 2012 largely due to the preponderance of growth in Asian markets.  Over the same period, and in contrast to declines in WE as a whole, the UK birth rate had increased by 15%.  Here the retailers were aggressively pushing private label diapers as evidenced by the “Tesco loves Baby” promotion.  The withdrawal of “Huggies” will benefit PL and “Pampers” with the majority of the KC 15% share going to PL.
Germany’s population is growing mainly in the over-65’s group where there are now 27% more people than in 2002.  As a consequence of this and the falling birth rate most of the value growth in disposables now comes from incontinence products.  40% of diapers and 15% of incontinence pads are sold as PL.  Incontinence product sales are expected to overtake diaper sales in 2017.
Spain is an economic catastrophe with 27% unemployment overall and 55% in the under 24’s.  Disposable income has fallen by 7% since 2008. The only categories of disposables still growing are flushable wet wipes.
Eastern Europe is growing well mainly due to the Russian baby-boom, and this region is now the 3rd Global Growth area behind China and Brazil.  The government’s “Mothers Capital” scheme, started in 2007 now grants $13,000 to women having babies before the end of 2016.
Turkey hopes to join the EU and will be the next big growth area.
Asia-Pacific as a whole now accounts for 35% of the Global hygiene market, up from 26% in 2002.  China remains the largest market with India running about 25 years behind China.  India, outside the cities, lacks infrastructure to handle disposal (see below).
China’s hygiene sales at retail have grown from around $3bn in 2002 to $10bn now and are expected to reach $37bn by 2020.  In 2002 femcare accounted for the ~90% of sales.  By 2020 femcare will be around 35% and diapers around 60%, the rest being emerging inco.  GDP and per capita income growth have both fallen from the 20% pa peak in the middle of the last decade to around 10%p.a. now and are expected to continue at this rate through 2020.  China is now best viewed city-by-city with Xiamen (9% CAGR), Tianjin (18% GDP Growth in 2011) and Shenzen (7% CAGR) being key growth areas. 
Japan is struggling with low growth and an ageing population.  By 2017 incontinence pad sales will reach $2.5bn, up from $1.2bn in 2002, while diaper sales will fall to $1.7bn from $2bn.
South Korea was singled out as the new market with greatest potential.  Here the per capita income is only $13,000 but already 45% of the diapers sold are bought on the web.  For comparison, only 4.5% of diapers are bought on the web in the USA.

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