Market Insights on Baby Care Categories

RedSky Gazette#2 : An outlook on the trends and topics in the baby care segment. Looking at the movers and shakers trusted by mums in the island city.  

The population growth rate in India has been a topic of discussion ever since prime minister, Shri Narendra Modi, expressed concern over population explosion in his Independence day speech this year. Population growth rate combined with economic growth & rising household incomes have led to an accelerated growth in the baby care category in India. Other variables at play here are rise of working women, nuclear families, growing awareness about baby care solutions & availability through e-commerce plus need for convenience. 

There is a huge scope when it comes to adoption of baby care products in general as well as premiumization, i.e. upgrade to higher order benefits like nature & environment friendly products, safe products for the child etc. Despite this huge opportunity, there are peculiar traits to this category, for example a brand needs to recruit new consumer/shopper every couple of years (as consumer journeys are short basis specific need), and barriers to entry like high trust & loyalty towards legacy brands like Johnson & Johnson. It is not easy to make the parent consider your brand without a very strong product & marketing mix. 

We therefore thought of deep diving into this category with access to solid data from stores across Mumbai. We looked at 12 months data for 10+ brands to understand this category better & bring to you this market analysis & insights which you can use to grow your business. We covered not only the legacy brands, but also new & upcoming brands representing newer trends in the category.

Category dynamics & sub-segments 

We divided the category into 3 major sub-segments in baby care category: Baby personal care, baby foods & diapers basis consumer & category dynamics. Diapers is the biggest need segment with ~42% contribution to the category, followed by personal care (soaps, shampoos & powder) & baby foods.

Each sub-segment has its own market leader & dynamics. Diapers is dominated by Mamy poko & Pampers. Personal care (soaps, shampoos & powder) is dominated by J&J however Himalaya & Baby dove are worthy challengers. Baby foods is dominated primarily by Nestle, however this segment has substantial activity & entry from newer players along with expansion into further age groups.

Diapers:  Diapers is the largest need in baby segment, driven by a concerted category development effort by Pampers in last decade or so & a major format disruption pulled off by Mamy Poko, making it the market leader in the segment. 

Power Observation 1: Between the 2 players, 97% market is covered in Mumbai, which indicating a strong brand loyalty in the segment. When it comes to baby diapers, Indian mothers are making tried & tested choices

Recommendation: It is critical to capture mothers’ attention at their first interaction with the product i.e. with their first new born . Sampling and product benefits driven advertising can prove to be game changers. 

Brand Dynamics 

If we look at market share trends amongst brands, along with our in-store observations in Mumbai we see that Pampers is gaining market share in top stores in last 2 months, despite being the highest priced (highest relative price index) in the category.

Power Observation 2: Category is highly seasonal with Q3 showing huge upswing vs. Q2.

Recommendation : An aggressive brand can capitalize on this trend by upstocking the retailers & wholesalers through load-in trade schemes thus gaining disproportionate market share in season.

Baby Personal Care: Personal care consists of several sub-segments, with baby soap, baby powder, shampoo, oil & cream being the biggest contributors .

Power Observation 1: The contribution is not skewed towards a particular segment which indicates the range usage behavior in this category. This can further be corroborated by the basket analysis that we performed on the J&J personal care products. As we can see in the chart, someone who has bought J&J baby oil, is 33% likely to buy soap, shampoo, powder as well as cream.

Recommendation: This phenomena shows that the mother brand recruits the consumer in this category on the basis of product proposition which generates trust & loyalty. The consumer then prefers all the sub-segments/needs from the same trusted brand. Focusing all the marketing efforts on establishing a strong mother brand & ensuring Assortment sell-in into the stores is key to success.

Brand Dynamics: Johnson & Johnson has been a trusted brand for Indian consumers for more than 70 years now. However, with the advent of Himalaya (& Baby Dove in soaps sub-segment), this dominance has been threatened. Himalaya has not only disrupted legacy categories like talc & oil, but also smaller newer categories in baby space like creams & wipes. Himalaya along with Baby dove has disrupted the soap segment.

This share loss by J&J is happening across sub-segments however is most predominant in creams & soaps segment where Himalaya & Baby Dove are gaining on a month on month basis.Himalaya is already a market leader in creams sub-segment on a consistent basis.

Next set of losses come from Baby powder: Himalaya is the primary gainer.

Power Observation 2: Natural Equity: Lal tail still remains a constant player in oil category. All the share gains for Himalaya are from J&J, indicating very strong equity & natural positioning of parent brand Dabur helping in a big way. This can be seen as an opportunity for Dabur to enter into personal care space. Dove has not been able to make a dent into this segment, as the segment dynamics are far from core brand benefit of dove which is moisturizing.

 With the winters on the horizon, and a new age of baby brands already making waves in e-commerce, baby care is poised to change forever in our country. With the existing brands leveraging their distribution strengths to maintain dominance across the offline universe, it will be interesting to see some of these nouveau brands make in-roads. We at RedSky, will keep our eyes on the data and our ears on the ground, to keep track of the ever changing market dynamics.

RedSky is expanding and is on the move. We recently broke ground in our 7th city, and are hoping to end this year, with a presence in 10 cities across the country. We are scouting for partners and brands, looking at leveraging our data, reach and activation capabilities in the offline universe. For any questions, feedback or suggestions, please drop in a word at ankit@rdskytech.com