MANILA – Home to 80% percent of the world’s population, the battle for baby bucks is markedly stiffer in the developing world, but opportunities are ripe for the picking for brands that pay close attention.
Despite birthrates declining globally, a new Nielsen report found that the baby products market is sizzling. The baby food market is valued at nearly US$35 billion so far this year while global diaper sales is expected to exceed US$27 billion.
Sale have increased by 7% for baby food and 20% for formula over the 12 months ending December 2014. Europe and North America currently dominate the market, accounting for 87% of baby food and 66% of baby formula sales, but developing countries are leading the uptrend.
While the two top markets recorded flat sales in 2014, value sales grew 4% over 2014 in Africa/Middle East, 3.4% in Asia-Pacific and 2.6% in Latin America.
In Southeast Asia’s developing countries such as the Philippines, one in 10 consumers (10%) have a child below the age of one in their household, double the global average of 5%. A further 12% of Filipino respondents in the report have children aged 1 to 2 years old in their household compared to 9% globally.
“Despite the challenges, opportunities in the baby care market are substantial, “states Stuart Jamieson, managing director of Nielsen in the Philippines. “To achieve success in a space dominated by only a few major brands, it is critical to have a deep understanding of what is driving product choice.”
Here are 5 things shaping the baby product boom in the Philippines:
They love trusted brands, healthy options – For Filipino respondents who admitted to have bought baby food in the last five years, trusted brand (47%), good overall nutrition (46%), good price/value (45%), and safe ingredients/processing (43%) are the most important criteria when deciding which brand and type of baby food to purchase. Organic and all-natural foods are also an important purchase consideration, cited by 25% of respondents in the Philippines.
Protection, Price, Comfort – When it comes to attributes in choosing the brand and type of diaper to buy for their babies, close to 6 in 10 (56%) of consumers in the Philippines identify skin protection/good for sensitive skin as their top consideration, followed by good price/value (41%) and good fit/comfort (37%).
TV Advertising is king – When it comes to advice about the best baby food /formula and diapers for their babies, new Filipino parents turn to TV advertising, recommendation from friend/family, and recommendation from baby health experts. However, recommendations from baby health experts top overall sources of information in deciding which baby food to buy.
For purchasing diapers, its recommendation from friends/family wields the most influence while TV advertising also influenced purchase decisions followed closely by recommendations from baby health experts.
“While recommendations from friends/family and experts and TV advertising outweigh all other sources of information as a trusted adviser and most influential in purchase decisions, we are seeing the emergence of online sources such as parenting websites and social media in the circle of trust of Filipino parents,” Jamieson comments.
Where are they buying baby care product? – E-commerce has yet to win over parents looking for baby products in the Philippines, with over 30% saying that went to a brick and mortar store to buy goods instead on going online (versus 12% who bought baby diapers online). For baby food, 32% claimed to have purchased from baby specialist stores compared to 9% who made online purchases.
“While Filipinos love the experience of shopping in brick and mortar stores, there are consumers who are shopping online because of the compelling proposition that it presents for busy parents,” states Jamieson. “They have the option to conveniently shop whenever, wherever they desire, often with free delivery to their front door.”
