Category Briefing | 21 Jul 2010
• Baby care posts 9 % growth in current value terms in 2009, reaching VND250 billion • Strong rising consumer demand is main factor driving growth • Fastest growing segments in 2009 are baby skin care and baby toiletries, with 10% growth rates in current value terms • In 2009, unit price continues to rise due to higher availability of premium products • Johnson & Johnson Vietnam Co Ltd dominates baby care with 49% value share in 2009 • Over the forecast period, baby care is expected to grow by a constant value CAGR of 6%
• Demand for baby care products in Vietnam continued to show strong growth in 2009 despite the ongoing decreasing trend in the birth rate. With rising income levels and better living standards, especially in urban areas, parents were able to afford the best for their babies and were willing to spend more for baby care products. As the availability and variety of products and brands increased, more choices appeared for parenting consumers. Correspondingly, consumers also became more demanding and meticulous about their purchasing decisions. • The most outstanding performance belonged to baby skin care and baby toiletries both growing by 10% in current value terms in 2009. These two categories were able to outperform the others because Vietnamese consumers have always been aware of good skin care in general, thus, manufacturers chose to improve consumers’ baby care knowledge and develop the category targeting parents’ foremost concerns about hygiene and protection for their babies’ skin. That also explains the good performance of baby sun care which grew by 9% in current value terms in 2009. Meanwhile, baby hair care was given less attention and witnessed weak demand since consumers usually use bath/shower products as a replacement. • In 2009, the unit price increased because consumers became more willing to trade up to premium baby care products. Moreover, manufacturers regularly created new and innovative products with better features, ingredients and production technology which drove up input costs and increased the end price accordingly. • Although mass products dominated, accounting for 99% share of the category’s value sales, premium products’ presence increased, up from 1.3% in 2008 to 1.4% in 2009. The main consumers of premium baby care products are those parents with high-income levels and luxurious lifestyles. There are limited premium baby care brands available in the category. In general, consumers purchase premium products such as L’Occitane and Corine de Farme mainly on recommendations from acquaintances or their own research. • Natural and organic ingredients are big trends in baby care. Since baby’s skin is considered as the most sensitive, the more gentle a baby care product claims to be, the more favour it gains from consumers. Thus, natural products which are always believed to be the tenderest, gained more consumer preference although their prices may be more expensive than the average.
• Johnson & Johnson Vietnam successfully protected its leading position in 2009 despite the temporary loss initiated from rumours about its products causing cancer in babies which worried consumers and forced some supermarkets to remove Johnson & Johnson products from their shelves at the beginning of the year. After authorities officially proved the safety of Johnson & Johnson products, the company quickly regained its reputation through various promotional and marketing activities. • Oriflame Vietnam witnessed the largest increase in its 2009 value sales, growing by 39%. Apart from the temporary benefit caused by negative rumours about Johnson & Johnson products, Oriflame created its success story by a broad and effective distribution network and strong strategies of positioning its baby care products as natural and gentle. Its larger sales...