On August 3, huawang group announced its financial report for the first half of 2021. According to the financial report, from January 1 to June 30, 2021, the net sales of huawang group was 675.2 billion yen (about 39.1 billion yuan), an increase of 1.2% over last year; Net income was 53.5 billion yen (about 3.1 billion yuan), a year-on-year increase of 3.7%.
Diaper revenue in China may fall to 1.5 billion
Strong growth in sanitary napkin sales
The reportable part of huawang group can be divided into five basic businesses: consumer goods business and chemical business composed of four business areas (health and life care business, health and beauty care business, biological care business and cosmetics business).
Among them, the health and life care business covers sanitary products, home care products and fabric care products. The net sales in the first half of 2021 was 234.8 billion yen (about 13.8 billion yuan), a decrease of 3% over the same period last year. In terms of sanitary products, the sales volume of Miaoshu baby diapers in Indonesia was stable, but it decreased in China, and the operating revenue decreased by 10 billion yen – 26 billion yen (about 590-15 billion yuan) year-on-year. The sales volume of le’erya sanitary napkins in China increased strongly, but the sales volume in Japan decreased due to the lack of special demand and other factors.
From January to June 2021, Japan’s home and personal care products market (the main market of Kao Group) shrank compared with the same period of the previous year, reflecting that the market demand (mainly health-related products) did not increase. This demand appeared due to the pandemic in the previous year, but increased compared with the same period in the previous two years.
According to the division of departments, the performance of other business departments also showed a slight decline. The net sales of health and beauty care business was 174 billion yen, a year-on-year decrease of 1.2%; The net sales of biological nursing business was 24.9 billion yen, a year-on-year increase of 6.6%; The net sales of cosmetics business was 110.6 billion yen, up 0.9% year-on-year. However, according to the financial report, the cosmetics market shrank seriously, and the state of emergency continued in all regions. Overall, the net sales of consumer goods business was 544.2 billion yen, a year-on-year decrease of 1.2%.
On the other hand, the chemical business ushered in growth, with net sales of 150.4 billion yen, up 11.1% year-on-year. With the recovery of demand in automobile related, oil derivatives and other fields, huawang group has benefited steadily.
Kao is trying to save the Chinese market
Nowadays, it has become a fact that huawang’s sales of diapers in the Chinese market are not booming. In the past, China’s diaper market was dominated by foreign capital. Until three years ago, miaoreshu diapers under huawang group were welcomed by the Chinese market and sold out several times. It is reported that in 2017, the sales of diapers in China were about 40 billion yuan, and the sales of Kao diapers in China were about 5 billion yuan, monopolizing one eighth of the market.
However, on the one hand, because Kao lacks innovation in diaper products, consumers have more and better choices in the face of the continuous improvement of Chinese brands in raw materials and technology; On the other hand, huawang has insufficient force at the channel end, and its market share has decreased year by year. Due to the weak growth in the Chinese market, huawang group had to shift its focus from China to emerging markets such as India, Africa and South America.
Similarly, as a Japanese brand, in February this year, yonega president plateau Haojiu said at a press conference that he would gradually get rid of his dependence on China, the largest market in the future. The reason is that with the rise of Chinese local enterprises and increasingly fierce price competition, it is difficult for Japanese manufacturers to achieve growth. Uniga will take India and Africa as new growth footholds and invest 50 billion yen to enhance production capacity. Meanwhile, unijia changed its business structure in 2020, reduced the capital investment in infant care business, and invested more in women’s care, pet care, etc.
At the same time, aware of its own shortcomings, huawang is trying to recover the Chinese market and promote product innovation.
Since 2020, huawang has successively published important research results on the development of children’s walking ability. It uses motion capture technology to reveal the internal mechanism of children’s walking ability development. On this basis, it studies and analyzes the main factors affecting the walking of children wearing diapers.
On July 28, huawang official said that on August 18, it would launch the high-end product of infant diapers “merries” in China. The name of the new product is “one-step walking pants for growth”. It is said that the product adopts the research opinion of huawang’s infant walking. Compared with the old model, it is not easy to expand after urination, which can reduce the burden of baby walking. At the same time, huawang will also launch services for consumers to shoot infants walking with their smart phones at home and provide walking related suggestions according to the analysis results. Huawang said, “we will take this opportunity to strengthen the cause of baby diapers in the Chinese market.”
Previously, some people in the industry believed that under the condition of limited purchasing and fierce competition, huawang could only develop new popular models to solve the current weak sales. This time, can Kao launch a new high-end diaper as expected? Everything needs to be tested by the market.
Post time: Aug-11-2021