VietNamNet Bridge – The diaper market has heated up with a lot of deals made by the big guys: Unicharm has bought Diana, while other big guys P&G, Kimberly Clark and KyVy have announced a series of new investments.

Vietnam, the small market, turns out to be attractive to the big guys in the world. The US Luvs, Drypers, Japanese Mamy Poko or Canadian Baby Love all have been eying the market after they got successes in the other Asian markets of Thailand, China, Indonesia and Malaysia.

According to TNS, a market survey firm, the diaper industry witnesses the 28 percent per annum growth rate.

The diaper market has been determined recently after the big affair in which Unicharm bought 95 percent of Vietnamese Diana’s stakes.

The buyer, who holds 25 percent of the Asian market, was believed to buy Diana stakes as a part of its plant to conquer the markets of Vietnam, Laos, Cambodia, the south of China.

In November 2012, P&G decided to spend $80 million more to expand a Pampers factory and install the production lines that make the latest diaper products. P&G’s total investment capital injected in its two factories in Binh Duong province has reached $200 million, while the figure is expected to increase further in the next 2-3 years.

Emre Olcer, CEO of P&G Vietnam, noted that the Vietnamese population of 90 million and 1.6 million children born every year is really an attractive market not only to P&G, but also to other manufacturers.

Having realized that the market segment of popular products has nearly got saturated, while there are not many high-end products, P&G has decided to develop high quality products and diversify products to satisfy all the market segments.

Diana’s Sales Deputy Director Huynh Tan Phuoc noted that in order to compete with rivals, one need to put out high quality products and continuously launch new products to the market.

Therefore, after rushing to scale up the production to make high-end products, most of the diaper manufacturers now gather strength to compete with new products.

Kimberly Clark’s products made at its factories in Binh Duong province not only have been sold in Vietnam, but also exported to Australia, Malaysia, Indonesia, and would be exported to Europe and Latin America.

10-20 percent of Diana’s output has been exported, while the proportion may reach 50 percent in the time to come.

Tran Le Hang, Marketing Director of Huggies, a brand of Kimberly Clark, said the company always allocates reasonable budget to develop new products. In 2012 and 2013, for example, the manufacturer marketed new products with improved quality but with unchanged prices.

Sources said that KyVy has been following an ambitious plan on expanding the existing factory and competing with Unicharm in making diapers for old people.

Meanwhile, Unicharm continues pouring money into the factory in Bac Ninh, raising the production capacity to 1.4 products a year for babies and 65 million products for adults.

The heavy investment by Unicharm in the diaper production, in the eyes of analysts, shows that the group is gearing up in the Vietnamese and Asian markets.

There are some 50 diaper brands available in Vietnam, of which Bobby of Diana, Huggies of Kimberly Clark and Pampers of P&G make up 75 percent of the market share.

DNSG