MNC 500: Meet the samurai of India’s diaper market

UNICHARM CORP. founder Keiichiro Takahara, who grew up in post-war Japan, founded the group in 1961 with one clear mission: to create high-quality products that would enhance the well-being and comfort of individuals. The company began with the manufacture and sale of feminine napkins, and over the next six-and-a-half decades, went on to become a personal care behemoth with operations in around 80 countries globally. Its India entry wasn’t a cakewalk. In 2009, barely a year after entering India, Unicharm faced a reality check. It had organised a conference for around 40 distributors, bringing in senior executives from its global headquarters to showcase its product portfolio — most notably its innovative pant-style baby diapers, already a runaway success in several Asian markets. Demonstrations and discussions followed, as well as optimism about the evolving Indian market. However, when the sales team reached out to the distributors in the days that followed, only two expressed interest in Unicharm’s products. The moment marked an inflection point for Unicharm India, one that led it to rethink its go-to-market strategy and modify its global success playbook according to Indian realities. Results followed. By FY23, Unicharm India had replaced Procter & Gamble (P&G) as India’s biggest diaper company by sales — net sales rose to ₹3,587 crore, with the diaper (baby+adult) segment accounting for 84%, or ₹3,013 crore, while P&G’s baby diaper business clocked ₹2,422 crore, according to business intelligence platform Tofler and data provider Capitaline. The lead widened, and in FY25, Unicharm India reported net sales of ₹3,951 crore (₹3,319 crore for the diaper segment), compared with P&G’s ₹2,626 crore for the baby diaper segment. P&G doesn’t operate in the adult diaper category. “India is special to us and the love we’ve seen here is overwhelming. Driven by our NOLA and DOLA (Necessities of Life with Activities and Dreams of Life with Activities) philosophy, the team has been able to develop products by understanding the needs of consumers and bringing the best hygiene practices, powered by Japanese quality and experience,” Takahisa Takahara, president and CEO, Unicharm Corp., had said earlier. Race for market share Unicharm India’s portfolio primarily focusses on three categories — baby care (MamyPoko diapers), feminine care (Sofy sanitary napkins) and adult care (Lifree adult pants). According to data from market research firm IMARC Group, as of December 31, 2024, MamyPoko and Pampers (P&G) together held more than 80% share of India’s diaper market, followed by Huggies (Kimberly Clark Lever) and Teddyy (Nobel Hygiene India). “Three things worked very well for Unicharm: product power, marketing mix, and an aggressive sales pitch,” says an industry insider on condition of anonymity. To start with, the company drove awareness by distributing free samples. On the ground, the sales team made repeated visits to small stockists, often accompanied by senior management, who engaged with retailers to secure listings. The company’s pant-style single piece diaper created a lot of buzz. Around 60% of the company’s revenues came from those single packs. Its selling pitch was: either a cup of tea or one night’s sleep for your baby! To put things in context, a pack of 116 small-sized MamyPoko pant-style diapers costs around ₹1,190 on Amazon, compared with a pack of 86 similar-sized Pampers at ₹742. “Value pack offerings that provide better per-unit economics and personalised recommendations play significant roles in how parents first encounter brands,” says Nishant Raman, director, everyday essentials, Amazon India. “Legacy brands such as Unicharm and P&G leverage trust, extensive R&D, and continuous innovation built on decades of brand equity.” Baby diapers and more The Indian diaper market is intensely competitive, with trade schemes playing an important role in driving volumes. Margins and schemes range from 10-15% but can go up to 30%, say industry insiders. In some cases, players offer an effective 50% combined scheme and margin to wholesalers. It means a product with an MRP of ₹500 is sold to trade at just ₹250. Against this backdrop, giants such as P&G and Unicharm enjoy a clear advantage: their scale allows them to cut prices aggressively and still offer higher margins and schemes. “The market is led by price. The one that cracks the price code will be the one to grab the volumes,” says Harish Bijoor, brand expert and founder of Harish Bijoor Consults Inc. According to Rajeev Nayar, partner, consumer markets, KPMG in India, winners in this space will be defined by business-model innovation. “Omni-channel reach into Tier II/III cities, subscription and assisted-care delivery, and smarter products — from leak sensors to skin-health features [will be key]. Success hinges on balancing affordability at scale with premiumisation through eco-friendly, hyper-absorbent, skin-safe offerings,” he adds. Online channels, especially e-commerce, have accelerated the adoption of diapers. Around 30-35% of a firm’s diaper sales come from e-commerce platforms. According to industry insiders, the number is higher for Pampers (40%), with most of its growth coming from the premium portfolio. “E-commerce has improved access, accelerated brand discovery, and enabled newer players to scale without deep reliance on traditional distribution,” says Naveen Malpani, partner and consumer & retail industry leader, Grant Thornton Bharat (GTB). “Improving affordability, driven by local manufacturing, wider price bands, and smaller pack sizes, has expanded adoption beyond top urban markets.” Besides, rising disposable incomes and a growing base of working couples are reshaping consumption behaviour, with higher preference for products that offer superior hygiene, safety, and convenience for children, accelerating gradual premiumisation, he adds. The diaper market has grown from ₹6,698 crore in 2020 to ₹8,495 crore in 2024, says an IMARC report. Baby diapers constitute 91.3% of the market. The per-user-per-month number for baby diapers is around 60 in India; for China, it is 80, while it is more than 100 for Singapore and Japan. Besides, the penetration of disposable diapers in India remains low (less than 2%), offering massive opportunities for growth. “Parents today want to know exactly what touches their baby’s skin, and brands that provide this transparency are earning customer trust and loyalty,” says Raman of Amazon India. “What’s particularly interesting is the story within the diaper [segment] itself — premium diapers are growing 40% faster than value segments, signalling a clear premiumisation trend where parents are willing to invest significantly more in products that offer superior performance.” KPMG’s Nayar feels the market is at a demographic ‘barbell’ moment — young urban parents on one end and a rapidly expanding elder cohort on the other — turning absorbent hygiene from discretionary to essential care. “This dual demand curve signals strong growth ahead, driven by convenience for baby care and unmet needs in adult incontinence,” he says. “With demand accelerating and manufacturing capabilities scaling up, the market offers significant headroom for sustained expansion over the medium term,” adds Malpani of GTB. Unlike baby nappies, the around ₹1,200-crore adult diaper segment is led by home-grown Nobel Hygiene (Friends), with an estimated 50%-plus market share. Unicharm’s Lifree portfolio offers a range of products, including the recently launched Lifree Extra Absorb Super Pants. The domestic sanitary napkin market, on the other hand, is led by P&G (Whisper), Johnson & Johnson (Stayfree), and Unicharm (Sofy), alongside Kimberly-Clark (Kotex) and local brands such as Niine and Saathi. Sofy has around 10% market share in Indian cities, but only around 4% in rural areas. The market, led by Whisper and Stayfree, is projected to reach $1.76 billion in 2033, from $0.83 billion in 2024, according to market research firm Research & Markets. India, the future growth driver Unicharm houses six R&D bases outside Japan — Thailand, Indonesia, India, China, Saudi Arabia, and Vietnam. The use of products such as coconut-extract sheets for improved skin health, along with eco-friendly packaging solutions, have added to the company’s growing adoption among sustainability-minded consumers. In India, it has three factories at Neemrana (Rajasthan), Sri City (Andhra Pradesh), and Sanand (Gujarat). The Sanand plant is expected to increase Unicharm’s total diaper production capacity in the country by 30%, in line with its strategy to double down on India. CEO Takahara has said that India and China hold the future for Unicharm. “We believe the better strategy is to focus on Asia which holds more than half of the world’s population. By becoming No. 1 in Asia, you become the No. 1 company in the industry in terms of scale,” according to Unicharm’s Integrated Report 2025. The group’s net Asia sales (excluding China and Japan) grew from 227 billion yen in FY20 to 336 billion yen in FY24, while core operating income rose from 25 billion yen to 31 billion yen. Unicharm follows a January-December fiscal. Future growth is expected to be led by India, even as some markets may face slower demand. “Overseas, growth slowdown [is likely] in China and Thailand due to accelerated declining number of births… growth [to continue] in India,” says the group’s ‘The 12th Mid-term Management Plan (FY2024-FY2026)’. The group plans to come up with unique value-added products tailored to different stages in growing markets. It expects the BC market (B and C socioeconomic classes; specifically identified as low-income or budget-conscious consumers) to grow in Indonesia, Vietnam, and India vis-à-vis a decline in Japan, China, and Thailand. “In fiscal 2025 and beyond, Africa and countries, including India and its neighbours — where market expansion is expected due to increases in the target population and economic growth — will become key regions for the personal care business, such as wellness care, feminine care, baby care, and cleansing wipes,” says the Integrated Report 2025. Unicharm expects the number of middle-class households to rise to 116 million in India/surrounding countries by 2030, from 106 million in 2022. The personal and baby wipes market, another of its main businesses, is also likely to grow 111% in India and Brazil, vis-à-vis 22% in East Asia. Going ahead, Unicharm India’s growth story will be driven by innovation and smart expansion, positioning it to capture new markets and achieve sustainable, long-term success.

MNC 500: Meet the samurai of India’s diaper market

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