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Swings and Roundabouts in Global Baby Care

By: Rob Walker, Euromonitor International
Posted: August 6, 2013, from the September 2013 issue of GCI Magazine.

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Birth rates do not necessarily correlate with the performance of baby care. Over the last five years, the world’s two biggest growth markets in absolute terms have been China and Brazil, where births have been in decline. This is because the middle-class in both markets expanded rapidly, bringing retail modernization to key regions such as Brazil’s northeast and China’s lower-tier inland cities.

There is no such thing as a safe haven of growth, however, and going forward, the industry could see a stronger correlation between market performance and declining birth rates, especially in Brazil where middle-class confidence is at its lowest in more than a decade. The recent rioting, involving large numbers of educated, middle-class Brazilians, bears testimony to a growing sense of domestic frustration.

Some of the fastest growing emerging markets for baby care products over the next five years have been identified as Mexico, Turkey, Indonesia, Saudi Arabia and Iran, according to data from Euromonitor International. The birth rate is in decline in Mexico and Indonesia, but a burgeoning and economically confident middle-class will fuel new demand for products such as wipes, diaper rash treatments and toiletries.

In the wider picture, each of these growth markets will be small if China’s one-child policy is revoked. China’s spending on baby and child-specific beauty and personal care is already forecast to double between 2012 and 2017, implying growth of more than $1 billion in absolute terms. That growth trajectory could spike to unparalleled levels over the latter part of the decade.

For further insight, please contact Rob Walker at rob.walker@research7.euromonitor.com.