Rapid urbanization, the growth of the middle class and rising rates of female participation in the labor force, especially in many developing markets, are expected to stimulate growth in baby food sales, which Nielsen estimates will reach nearly US$30 billion in 2015* and in the global diaper market which is projected to exceed US$29 billion** according to Nielsen’s latest report on baby care.
About one in 10 consumers in Malaysia report having a child below the age of one in their household, one of the highest levels in any region and double the global average of 5%. A further 12% of consumers in the nation have children aged 1 to 2 years old in their household compared to 9% globally.
“When it comes to caring for their little bundles of joy, parents are highly discerning – from the food they put in their mouths to diapers they put on their bottom. There is little room for compromise and they are willing to spend more for quality,” states Connie Cheng, Head of Shopper Insights for Nielsen in Southeast Asia, North Asia and Pacific.
Competition in the baby care market is fierce and numerous branded and store-branded products at various price proints compete for attention. Morever, the window for purchasing baby care products is relatively short.
“Despite the challenges, opportunities in the baby care market are substantial. Achieving competitive advantage in a space dominated by only a few major brands is possible through a deep understanding of what is driving product choice.” advises Cheng.
TRUSTED BRAND AND HEALTHY OPTIONS
Nearly half of Malaysians say trusted brand (49%) and provides good overall nutrition (49%) is important when deciding which baby products to purchase. Safe ingredients/processing (38%) and prive/value (34%), along organic/all natural foods (25%) are also an important purchase consideration.
“Greater awareness of the imporance of health and nutrition is leading consumers to look for natural, minimally-processed foods and when it comes to their babies, consumers are especially particular – even if their demands come at a premium,” observes Cheng. “Parents are prepared to trade up and this will drive continued growth in the segment, albeit that growth will come from different sources for different markets. In developed markets, where birthrates are lower and baby care categories are highly saturated, growth will be spurred by innovation and premiumization while in developing markets, increasing demand will be the biggest growth driver.”
IT’S ALL ABOUT THE DIAPERS
About eight in 10 Malaysian consuemers have switched diaper brands (78%) in the past five years. Top reasons why four out of five Malaysians readily switched diaper brands are due to brand promotion (42%), positive feedback on the brand by family/friends (40%) and the brand was less expensive (38%).
When it comes to atributes in choosing the brand and type of diaper to buy for their babies, about half of Malaysian consumers identify skin protection/good for sensitive skin (48%) as key factors influencing their purchase decision. Nearly one third of the respondents identified no leakage (32%) and good fit/comfortable to wear (31%) as important attributes.
THE VALUE OF ADVOCACY
About two in five Malaysian consumers take their cue based on recommendations from family/friends (40%) and suggestions made by baby health experts (36%). Malaysian parents are also relying on offline and online resources with about one in five consumers referring to parenting websites (22%), parenting magazines (21%) and social media sites (19%) for tips on which baby food to purchase.
When it comes to influencing purchase for diapers, close to half of consumers (47%) say recommendations from family and friends had the most significant influence on their purchase decisions followed by products on shelf in store (24%) and recommendation for baby health experts (24%).
ONLINE PURCHASING TRENDS
While consumers of baby care products in Southeast Asia are most likely to purchase baby supplies in a ‘bricks and mortar’, online channels are gaining momentum with at least a third of Malaysian consumers having purchased baby clothes (37%) and baby toys (33%) online.
“Online retailers are able to compete on price and convenience due to reduced capital investment in physical infrastructure and in some cases, the elimination of links in the supply chain,” explains Cheng. “Purchasing baby care products online offers a compelling proposition for busy parents. They can conveniently shop whenever, wherever they desire, often with free delivery to their front door and these are some of the factors driving growth in popularity of online baby supplied website.”
* Based on Nielsen retail sales data for infant nutrition, infant cereal and infant formula categories in selected countries, which cover an estimated 95% of global baby food and formula sales.
**Based on Nielsen sales data for baby diapers and wipes in 63 countries, which account for an estimated 90% of global value sales.
Insights contained in this article are based on results from the 2015 Nielsen Global Baby Care Survey.
View the infographic related to this topic.
ABOUT THE NIELSEN GLOBAL SURVEY
The Nielsen Global of Baby Care was conducted between February 23 and March 13, 2015, and polled consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America who have made a baby care purchase in the past five years. In Malaysia, the sample size is between 180 and 298 depending on survey segment. The sample has quotas based on age and sex for each country based on its Internet users and is weighted to be representative of Internet consumers. It has a margin of error of ±0.6%. This Nielsen survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60% Internet penetration or an online population of 10 million for survey inclusion. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.