Blue Oceans within Southeast Asian Markets

The tissue and hygiene markets in Southeast Asia are expected to grow more than three times the rate of global growth through 2023 based on Euromonitor forecasts. This is primarily driven by factors such as income growth, urbanisation and increasing literacy rates among Southeast Asians.

Disposable diapers become necessities as incomes grow

The annual income threshold for parents to enter the disposable baby diapers category is around USD4,000. Rapid economic development and employment opportunities are expected to result in more adults crossing that income threshold, especially in countries such as Indonesia, the Philippines and Malaysia.

The main drivers for disposable baby diapers include stable population growth rates, increasing number of dual-income families and hygiene awareness among parents as the growing middle-class is becoming increasingly conscious of baby hygiene. The number of dual-income families where both parents are engaged in full-time employment is rising. This means a shift in how parents approach baby chores and education, such as the rising average age of potty training requiring the use of baby diapers for longer periods. As parents lack time they become more reliant on the convenient alternatives.

Unique preference for disposable pants in Southeast Asia

Southeast Asian consumers are increasingly shifting towards disposable pants. They have become the most popular format in markets such as Indonesia, Thailand and Vietnam. Disposable pants make up 54% of the total demand against taped diapers in Southeast Asia, in contrast to merely 18% globally.

The convenience offered by pants is a major factor underpinning this switch, as parents continue to look for products that provide their children with the utmost comfort, protection and greater freedom of movement.

However, affordability of pants remains crucial for substitution. Understanding consumers’ preferences, influential product features and consumers’ willingness to pay more in each market are essential. Consumers in Thailand indicate strong interest in perceived high-quality products over environmentally-conscious or organic products, while Indonesians are inclined to buy products that are convenient to use and certified as safe for children by a government or non-profit organisation.

Changing roles and arising needs of women

Education levels and disposable incomes have been increasing for the female population, leading to a more empowered modern woman that is able to focus on self-care. By 2023, the average disposable income per capita for the female population in Southeast Asia is expected to increase by more than USD1,200 –twice the amount compared to the global female population.

As a result, growth of sanitary protection in Southeast Asia has soared in recent years. Female consumers place high importance on hygiene in their daily lives, leading to more frequent use and replacement of sanitary protection products. A key strategy for growth involves tapping into lifestyle changes and trends, and how feminine care products can fit into this new lifestyle. This includes both emerging markets where intimate hygiene is underdeveloped, as well as in developed markets where consumer preferences are changing.

In developing Southeast Asian countries, a considerable proportion of the population remains in rural areas and below the typical income threshold for disposable hygiene products. Consequently, traditional hygiene practices remain strong such as the use of cloths that are reusable and cheaper, albeit less hygienic.

With large unmet potential in these markets, they represent blue oceans for tissue and hygiene manufacturers. To tap into these opportunities, manufacturers should focus on building emotional relationships and trust with the targeted consumer segments. In addition, focusing on educational campaigns through partnerships with local organisations would also help foreign companies understand local needs better and cater to the increasing income and hygiene needs of consumers.

For more information download our Tissue & Hygiene reports and connect with me on LinkedIn.

Related analysis