Kao Corporation has ceased production of disposable baby diapers in Hefei, Anhui, China.
In its latest round of earnings results, the Japanese company announced that sales of its Merries baby diapers had decreased due to market shrinkage and intensifying competition in China. Sales remained steady in Japan and Indonesia. Kao also announced it would review its Japanese facilities.
Kao began selling diapers in China in 2009 and started local production in 2012. Initial sales were strong as consumers favored their breathability and softness, but in recent years local competition has been able to offer similar products, eroding Kao’s marketshare in the country.
According to a report on Nikkei,net, the share of local brands in the Chinese diaper brand has risen from 20% in 2017 to 60% in 2021 as younger parents have a stronger attachment to domestic brands like Beaba and Babycare, which have also been able to offer more premium diaper products.
Meanwhile, sales of Kao’s Laurier sanitary napkins remained strong in China and Indonesia and continued to increase in Japan, due to increased promotions and pricing increases.
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