Baby and Child-Specific Products in The Philippines: Euromonitor International July 2012

BABY AND CHILD-SPECIFIC
PRODUCTS IN THE PHILIPPINES

Euromonitor International
July 2012
BABY AND CHILD-SPECIFIC PRODUCTS IN THE PHILIPPINES Passport I
LIST OF CONTENTS AND TABLES

Headlines ..................................................................................................................................... 1
Trends .......................................................................................................................................... 1
Competitive Landscape ................................................................................................................ 2
Prospects ..................................................................................................................................... 3
Category Data .............................................................................................................................. 4
Table 1 Sales of Baby and Child-specific Products by Category: Value 2006-
2011 ............................................................................................................. 4
Table 2 Sales of Baby and Child-specific Products by Category: % Value
Growth 2006-2011 ....................................................................................... 4
Table 3 Baby and Child-specific Products Premium Vs Mass % Analysis
2006-2011 .................................................................................................... 5
Table 4 Baby and Child-specific Products Company Shares 2007-2011 .................. 5
Table 5 Baby and Child-specific Products Brand Shares 2008-2011 ........................ 6
Table 6 Baby and Child-specific Skin Care Brand Shares 2008-2011 ...................... 7
Table 7 Baby and Child-specific Sun Care Brand Shares 2008-2011 ....................... 8
Table 8 Forecast Sales of Baby and Child-specific Products by Category:
Value 2011-2016 .......................................................................................... 8
Table 9 Forecast Sales of Baby and Child-specific Products by Category: %
Value Growth 2011-2016 ............................................................................. 8
Table 10 Forecast Baby and Child-specific Products Premium Vs Mass %
Analysis 2011-2016...................................................................................... 9
© Euromonitor International
BABY AND CHILD-SPECIFIC PRODUCTS IN THE PHILIPPINES Passport 1
BABY AND CHILD-SPECIFIC

PRODUCTS IN THE PHILIPPINES
HEADLINES
 Baby and child-specific products reaches value sales of Ps7.0 billion in 2011
 The Reproductive Health Bill fails to pass in the Philippines
 Average unit prices increase conservatively, by 1% in 2011
 Johnson & Johnson (Philippines) holds a 52% share of value sales in 2011
 Baby and child-specific products is expected to increase by a CAGR of 1% in constant value
terms in the forecast period
TRENDS
 The Reproductive Health Bill, popularly known as the RH Bill in the Philippines, was proposed
in 2008. It became a hot topic for debate again in 2011. The Philippine population was
recorded to be close to 96 million in 2011, and continues to grow rapidly, especially amongst
those in the lower-income segment and the rural population, who have little or no access to
contraception. The RH Bill aims to allow government health care centres to distribute
contraceptive devices to the public, and educate them about their use. It also proposes
formally introducing a reproductive health education programme to public and private schools.
The extremely politically influential Catholic Church in the Philippines unfalteringly opposed
the RH Bill when it was debated in congress. Although about 90% of Filipinos are Catholic,
both those in the private and public sectors had different views on the RH Bill. The RH Bill
ultimately failed to pass in 2011, but may be proposed again in the next few years.
 The failure of the passing of the RH Bill allowed for undisrupted population growth in the
Philippines. Companies in baby and child-specific products continued to see strong sales of
mass baby products in 2011. Low-cost baby-specific necessities such as baby shampoo and
baby soap depend on population growth to maintain sales.
 Baby and child-specific products experienced slower current value growth in 2011, of 4%.
This more sluggish performance was the result of a slower birth rate amongst middle- and
high-income Filipino families. Urbanisation in Metro Manila, the business hub of the
Philippines, led to more middle- and high-income families seeking family planning and leaving
marriage until later. Many young professionals in the middle-and high-income segments have
higher aspirations, and choose to prioritise career or personal growth before settling down.
Although the population in this income segment is relatively small in the Philippines, this
group plays an important role in driving the growth of baby and child-specific products,
because of its strong purchasing power.
 Baby and child-specific sun care saw the weakest performance in 2011, with a 5% current
value decline. Many Filipino families do not see baby and child-specific sun care products as
necessities, and usually share a single bottle for the entire family. The poor economic
performance in 2011 also reduced domestic travel amongst local residents during the
summer.
 Average unit prices increased by 1% in 2011, due to the strong competition, especially
amongst brands of baby and child-specific toiletries. Cheaper products experienced greater
demand, as many families cut costs during the global financial crisis in 2011. In addition, the
low average income in the Philippines limits the budget for purchases for babies or children.
 Nappy (diaper) rash treatments continued to post strong current value growth of 5% in 2011.
This growth was attributed mostly to price increases; the product alternatives to treat severe
nappy rash remain limited, thus allowing nappy rash brands to dictate unit prices. Baby wipes
also increased by 5% in current value terms in 2011. In the Philippines, baby wipes are used
not only for babies, but are commonly used by some adults on a daily basis. The poor
sanitary standards in public toilets and lack of facilities such as soap, tissue and sometimes
even water forced many people to purchase products such as baby wipes.
 A 98% share of sales of baby and child-specific products was held by mass products in 2011.
Premium baby and child-specific brands such as Clarins Sun Care Cream for Children are
available, but have limited sales. Premium baby and child-specific brands are distributed
mainly through shopping centres and department stores in upscale locations. Average per
capita monthly disposable income in the Philippines was recorded to be less than Ps6,000 a
month in 2010, according to Euromonitor International’s income and expenditure study; thus
limiting the number of consumers able to purchase premium baby and child-specific products.
 Products positioned for children continued to perform poorly compared with those positioned
for babies. Child-specific products face strong competition from products targeting entire
families, such as Vaseline, Zest and Safeguard. More often than not, parents tend to choose
family products rather than child-specific products, as they see child-specific products as an
unnecessary expense, and see better value in purchasing family brands which can be shared
with all members of the household.
 Natural and organic ingredients and naturally-positioned products are available, such as Baby
Spa Virgin Coconut Oil (VCO) Skin Nourishing Oil. However, the majority of natural and
organic ingredients and naturally-positioned products tend to be focused on products for
women. Baby and child-specific brands tend to focus on making their products gentler and
specifically formulated for babies’ skin.
COMPETITIVE LANDSCAPE
 Johnson & Johnson (Philippines) continued to dominate baby and child-specific products in
2011, holding a 52% share of value sales. Its strong performance was mainly because of its
long presence in the Philippines. It is known to provide high-quality products, and has gained
brand-loyalty throughout the years.
 SM Bonus saw the strongest increase in value sales in 2011. It benefited from the weak
economy, as consumers looked to cut costs and save money. SM Retails also aggressively
increased distribution through the construction of more grocery outlets around the Philippines.
Avon Baby experienced a decline in value sales of 17% in 2011. Its weaker performance was
a result of the increasing competition from other direct selling brands, such as Tupperware
Brands’s Zwistal and its newly launched Kids Plus+ product line.
 International brands dominated baby and child-specific products in 2011. More than a 70%
share of overall value sales was held by international companies such as Johnson & Johnson,
Unilever and Colgate-Palmolive. Unlike international brands such as Johnson’s Baby, which
have a diverse range of products for the baby and child-specific market, the majority of
domestically-owned corporations in baby and child-specific products focus on niche segments
such as baby cologne and baby lotion. Domestic brands have limited capital to expand their
brand portfolios, due to the high costs of production, research and development.
 In 2011 Mustela launched its Mustela Bébé product line in the Philippines. Mustela brands are
priced at the higher-end, and distribution is focused through stalls in upscale locations around
Metro Manila. Launch efforts were mainly through articles written in blogs, magazines and
newspapers. Mustela also participates in trade shows, and uses social networking to gain
further exposure. Mustela Philippines made little impact on baby and child-specific products in
2011, but its products are slowly gaining popularity amongst middle- and high-income
consumers.
 There were no new packaging innovations in baby and child-specific products in 2011, and
companies continued to use hard plastic packaging, usually HDPE plastic, as their primary
packaging. Many brand manufacturers of baby and child-specific products have been in the
market for years, and bank on product recognition to maintain sales.
 Competition between mass brands is extremely aggressive in the Philippines. Baby and child-
specific products targeted towards the mass market are available through department stores,
hypermarkets, supermarkets, independent retailers, internet retailing and even through direct
selling. A low-price positioning is a common strategy used to attract customers; the majority of
manufacturers keep their prices low to remain competitive. There was not a great deal of
mass media advertising in baby and child-specific products in 2011. Brands such as Lewis &
Pearl participated in direct marketing through school tours, whereby they went to different
schools around the Philippines and gave participants free items. Premium brands were not
very competitive, and focused marketing through articles written in magazines, blogs and
newspapers. Distribution was mainly through stores in upscale locations around Metro Manila.
PROSPECTS
 The middle- and high-income segments of the population are likely to start having children
later in life, due to their busier lifestyles and growing personal ambitions. Many young
professionals would rather spend their hard-earned money on entertainment and travel than
on settling down to have children. This trend is likely to slow the growth of baby and child-
specific products in the long term.
 Baby and child-specific products is expected to see a constant value CAGR of 1% over the
forecast period. Steady growth is expected due to the relatively steady population growth in
the Philippines. According to Euromonitor International’s data, the number of children
between 0 and 11 years of age is expected to grow by 1% per year throughout the forecast
period.
 The deceleration of population growth in the Philippines is likely to affect sales of baby and
child-specific products in the long term. As more and more Filipinos become aware of
contraception and family planning, it is likely that many couples will have fewer or no children,
thus affecting the overall future growth potential of baby and child-specific products.
 Baby and child-specific toiletries is expected to see the fastest growth over the forecast
period, with a constant value CAGR of 3%. Baby and child-specific toiletries is expected to
see the fastest growth in the Philippines, because many brands which compete in this
category, such as Bambini, Lewis & Pearl and Johnson’s Baby, target multiple segments. For
example, Johnson’s Baby markets its baby bath products as something which both mother
and baby can use. Bambini and Lewis & Pearl scent and package their colognes to match the
tastes of tweens.
 Average constant unit prices are expected to fall across all categories in baby and child-
specific products in the forecast period. Overall constant unit prices are expected to decline
by a CAGR of 3% over the forecast period. A decline is expected due to the strong
competition between mass brands. The majority of the leading brands compete for a similar
market niche, usually consisting of babies, children or tweens. Companies are expected to
keep their prices low to maintain market share.
 Launched in 2011, Mustela is expected to see moderate growth over the forecast period.
Although the population growth rate in the middle- and high-income segment is slowing,
Mustela is likely to be able to maintain steady growth due to the few competitors it has
targeting the same niche. Its popularity in France is likely to have a positive impression on
Philippine consumers.
 Companies in baby and child-specific products are expected to find ways to cut costs and
make their products cheaper. The fastest population growth comes from the lower-income
segments in the Philippines. Manufacturers of baby and child-specific products need to find
ways to keep their prices as low as possible to maintain growth. Baby and child-specific
brands may wish to explore shrinking their product sizes and creating sachet packs to be able
to sell their products at minimal prices. Shampoo and toothpaste brands in the Philippines
have found success through this strategy, and baby and child-specific brands may also find
growth through the same strategy.
CATEGORY DATA
Table 1 Sales of Baby and Child-specific Products by Category: Value 2006-2011
Ps million
2006 2007 2008 2009 2010 2011
Baby and Child-specific 571.9 583.3 597.9 611.6 623.9 635.7

Hair Care
Baby and Child-specific 1,665.5 1,790.4 1,906.8 2,011.7 2,182.7 2,241.6
Skin Care
Sun Care
Toiletries
Baby Wipes 43.6 46.8 48.0 50.5 52.8 55.4
Nappy (Diaper) Rash 103.9 109.6 115.1 119.7 125.1 131.1
Treatments
Medicated Baby and - - - - - -
Child-specific products
Products
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources
Table 2 Sales of Baby and Child-specific Products by Category: % Value Growth

2006-2011
% current value growth

2010/11 2006-11 CAGR 2006/11 Total
Baby and Child-specific Hair Care 1.9 2.1 11.2

Baby and Child-specific Skin Care 2.7 6.1 34.6
Baby and Child-specific Sun Care -5.0 -24.3 -75.1
Baby and Child-specific Toiletries 5.0 6.7 38.5
Baby Wipes 5.0 4.9 27.2
Nappy (Diaper) Rash Treatments 4.8 4.8 26.2
Medicated Baby and Child-specific - - -
products
Baby and Child-specific Products 4.0 5.9 33.4
Table 3 Baby and Child-specific Products Premium Vs Mass % Analysis 2006-2011
% retail value rsp

2006 2007 2008 2009 2010 2011
Premium 2.0 2.2 2.0 1.8 1.8 1.7

Mass 98.0 97.8 98.0 98.2 98.3 98.3
Total 100.0 100.0 100.0 100.0 100.0 100.0
Table 4 Baby and Child-specific Products Company Shares 2007-2011
% retail value rsp

Company 2007 2008 2009 2010 2011
Johnson & Johnson 52.1 52.2 52.3 51.0 52.0

(Philippines) Inc
Tupperware Brands Corp - - - 9.8 9.8
Rogemson Co Inc, The 6.2 6.2 6.3 6.1 6.3
Green Cross Inc 5.7 6.0 6.2 6.2 6.1
Colgate-Palmolive 3.8 3.7 3.6 3.3 3.2
Philippines Inc
HBC Inc 3.4 3.2 3.2 3.1 3.1
Avon Cosmetics Inc 0.6 - - 3.3 2.6
Beiersdorf AG 1.3 2.7 2.6 2.5 2.5
Pigeon Corp 2.3 2.2 2.1 2.1 2.1
Philusa Corp 1.6 1.8 1.8 1.9 1.9
Sanofi-Aventis 1.6 1.5 1.5 1.5 1.6
Philippines Inc
GlaxoSmithKline 0.7 0.7 0.7 0.7 0.7
Philippines Inc
Suyen Corp 0.6 0.6 0.6 0.6 0.6
Merck Sharp & Dohme - - - 0.6 0.6
Philippines Inc
Gentro Philippines Inc 0.2 0.2 0.2 0.2 0.2
Splash Corp 0.1 0.2 0.2 0.2 0.2
S & J International 0.2 0.2 0.2 0.2 0.1
Enterprises PCL
Playtex Products Inc 0.2 0.2 0.2 0.1 0.1
Kao Brands Co 0.2 0.1 0.1 0.1 0.1
Fuller Life Direct 9.4 9.9 9.9 - -
Selling Philippines, Inc
Schering-Plough Corp 0.7 0.6 0.6 - -
Procter & Gamble - - - - -
Philippines Inc
Sara Lee Philippines Inc - - - - -
Pfizer Philippines Inc - - - - -
Andrew Jergens Co, The - - - - -
Reckitt Benckiser - - - - -
(Philippines) Inc
Sanofi-Synthélabo - - - - -
Philippines Inc
Sara Lee Direct Selling - - - - -
Philippines, Inc
Others 9.2 7.9 7.7 6.6 6.2
Total 100.0 100.0 100.0 100.0 100.0

Table 5 Baby and Child-specific Products Brand Shares 2008-2011
% retail value rsp

Brand Company 2008 2009 2010 2011
Johnson's Baby Johnson & Johnson 50.7 51.3 50.5 51.5

(Philippines) Inc
Zwitsal Tupperware Brands Corp - - 8.6 8.7
Bambini Rogemson Co Inc, The 6.2 6.3 6.1 6.3
Lewis & Pearl Green Cross Inc 6.0 6.2 6.2 6.1
Tender Care Colgate-Palmolive 3.7 3.6 3.3 3.2
Philippines Inc
Vitasoft HBC Inc 3.2 3.2 3.1 3.1
Avon Baby Avon Cosmetics Inc - - 3.3 2.6
Nivea Baby Beiersdorf AG 2.6 2.6 2.5 2.5
Pigeon Pigeon Corp 2.2 2.1 2.1 2.1
Babyflo Philusa Corp 1.8 1.8 1.9 1.9
Lactacyd Sanofi-Aventis 1.5 1.5 1.5 1.6
Philippines Inc
Petit Chéri Tupperware Brands Corp - - 1.1 1.1
Drapolene GlaxoSmithKline 0.7 0.7 0.7 0.7
Philippines Inc
Baby Bench Suyen Corp 0.6 0.6 0.6 0.6
Vandol Merck Sharp & Dohme - - 0.6 0.6
Philippines Inc
Desitin Johnson & Johnson 0.5 0.5 0.5 0.5
(Philippines) Inc
Giggles Gentro Philippines Inc 0.2 0.2 0.2 0.2
Baby Spa Splash Corp 0.2 0.2 0.2 0.2
Enfant S & J International 0.2 0.2 0.2 0.1
Enterprises PCL
Chubs Playtex Products Inc 0.2 0.1 0.1 0.1
Jergens Kao Brands Co 0.1 0.1 0.1 0.1
Nivea Sun Beiersdorf AG 0.0 - 0.0 0.0
Zwitsal Fuller Life Direct 8.7 8.8 - -
Petit Chéri Fuller Life Direct 1.1 1.2 - -
Vandol Schering-Plough Corp 0.6 0.6 - -
Johnson's Kids Johnson & Johnson 1.0 0.4 - -
(Philippines) Inc
Jergens Andrew Jergens Co, The - - - -
Baby Sure Fuller Life Direct - - - -
Green Cross Green Cross Inc - - - -
Desitin Pfizer Philippines Inc - - - -
Pampers Procter & Gamble - - - -
Philippines Inc
Nenuco Reckitt Benckiser - - - -
(Philippines) Inc
Lactacyd Sanofi-Synthélabo - - - -
Philippines Inc
Baby Sure Sara Lee Direct Selling - - - -
Philippines, Inc
Petit Chéri Sara Lee Direct Selling - - - -
Philippines, Inc
Zwitsal Sara Lee Direct Selling - - - -
Philippines, Inc
Baby Sure Sara Lee Philippines Inc - - - -
Zwitsal Sara Lee Philippines Inc - - - -
Coppertone Kids Schering-Plough Corp - - - -
Vitasoft Splash Corp - - - -
Others 7.9 7.7 6.6 6.2
Total 100.0 100.0 100.0 100.0
Table 6 Baby and Child-specific Skin Care Brand Shares 2008-2011
% retail value rsp

Brand Company 2008 2009 2010 2011
Johnson's Baby Johnson & Johnson 57.3 57.5 55.1 57.0

(Philippines) Inc
Zwitsal Tupperware Brands Corp - - 10.9 11.0
Nivea Baby Beiersdorf AG 8.2 8.2 7.8 7.9
Avon Baby Avon Cosmetics Inc - - 5.9 4.7
Bambini Baby Lotion Rogemson Co Inc, The 3.9 4.0 3.8 4.0
Vitasoft Baby HBC Inc 3.6 3.5 3.3 3.3
Pigeon Pigeon Corp 2.9 2.9 2.8 2.8
Petit Chéri Tupperware Brands Corp - - 1.1 1.1
Lewis & Pearl Green Cross Inc 0.8 0.9 0.8 0.7
Enfant S & J International 0.5 0.5 0.5 0.4
Enterprises PCL
Baby Spa Splash Corp 0.3 0.3 0.3 0.3
Jergens Baby Kao Brands Co 0.2 0.2 0.2 0.2
Baby Bench Lotion Suyen Corp 0.1 0.1 0.1 0.1
Zwitsal Fuller Life Direct 11.3 11.3 - -
Petit Chéri Baby Fuller Life Direct 1.1 1.2 - -
Lotion Selling Philippines, Inc
Jergens Baby Andrew Jergens Co, The - - - -
Baby Sure Fuller Life Direct - - - -
Green Cross Green Cross Inc - - - -
Baby Sure Sara Lee Direct Selling - - - -
Philippines, Inc
Petit Chéri Baby Sara Lee Direct Selling - - - -
Lotion Philippines, Inc
Zwitsal Sara Lee Direct Selling - - - -
Philippines, Inc
Baby Sure Sara Lee Philippines Inc - - - -
Zwitsal Sara Lee Philippines Inc - - - -
Vitasoft Baby Splash Corp - - - -
Baby Bench Cream Oil Suyen Corp - - - -
Baby Bench Soothing Suyen Corp - - - -
Baby Vapor
Others 9.8 9.4 7.4 6.7
Total 100.0 100.0 100.0 100.0
Table 7 Baby and Child-specific Sun Care Brand Shares 2008-2011
% retail value rsp

Brand Company 2008 2009 2010 2011
Hawaiian Tropic Tanning Research 31.0 43.0 36.5 36.3

Laboratories Inc
Banana Boat Kids Sun Pharmaceuticals Corp 22.1 30.8 27.0 26.7
Nivea Sun Kids Beiersdorf AG 28.6 - 15.0 16.5
Sunblock Lotion
Coppertone Kids Schering-Plough Corp - - - -
Others 18.3 26.2 21.5 20.5
Total 100.0 100.0 100.0 100.0
Table 8 Forecast Sales of Baby and Child-specific Products by Category: Value 2011-
2016
Ps million
2011 2012 2013 2014 2015 2016

Hair Care
Skin Care
Sun Care
Toiletries
Baby Wipes 55.4 56.3 57.3 58.4 59.8 61.2
Nappy (Diaper) Rash 131.1 131.7 133.7 136.5 140.1 144.4
Treatments
Medicated Baby and - - - - - -
Child-specific products
Products
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Table 9 Forecast Sales of Baby and Child-specific Products by Category: % Value

Growth 2011-2016
% constant value growth

2011-16 CAGR 2011/16 TOTAL
Baby and Child-specific Hair Care -1.1 -5.4

Baby and Child-specific Skin Care -1.1 -5.4
Baby and Child-specific Sun Care -5.0 -22.7
Baby and Child-specific Toiletries 3.0 15.9
Baby Wipes 2.0 10.5
Nappy (Diaper) Rash Treatments 2.0 10.2
Medicated Baby and Child-specific products - -
Baby and Child-specific Products 1.4 7.0
trade sources
Table 10 Forecast Baby and Child-specific Products Premium Vs Mass % Analysis

2011-2016
% retail value rsp

2011 2012 2013 2014 2015 2016
Premium 1.7 1.6 1.6 1.5 1.5 1.5

Mass 98.3 98.3 98.4 98.4 98.5 98.6
Total 100.0 100.0 100.0 100.0 100.0 100.0
trade sources

Baby and Child-Specific Products in The Philippines: Euromonitor International July 2012

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BABY AND CHILD-SPECIFIC

PRODUCTS IN THE PHILIPPINES

LIST OF CONTENTS AND TABLES

BABY AND CHILD-SPECIFIC

Baby and Child-specific 571.9 583.3 597.9 611.6 623.9 635.7

Table 2 Sales of Baby and Child-specific Products by Category: % Value Growth

% current value growth

Baby and Child-specific Hair Care 1.9 2.1 11.2

Table 3 Baby and Child-specific Products Premium Vs Mass % Analysis 2006-2011

% retail value rsp

Premium 2.0 2.2 2.0 1.8 1.8 1.7

Table 4 Baby and Child-specific Products Company Shares 2007-2011

% retail value rsp

Johnson & Johnson 52.1 52.2 52.3 51.0 52.0

Total 100.0 100.0 100.0 100.0 100.0

Table 5 Baby and Child-specific Products Brand Shares 2008-2011

% retail value rsp

Johnson's Baby Johnson & Johnson 50.7 51.3 50.5 51.5

Table 6 Baby and Child-specific Skin Care Brand Shares 2008-2011

% retail value rsp

Johnson's Baby Johnson & Johnson 57.3 57.5 55.1 57.0

Table 7 Baby and Child-specific Sun Care Brand Shares 2008-2011

% retail value rsp

Hawaiian Tropic Tanning Research 31.0 43.0 36.5 36.3

Baby and Child-specific 635.7 627.4 619.9 613.1 607.0 601.5

Table 9 Forecast Sales of Baby and Child-specific Products by Category: % Value

% constant value growth

Baby and Child-specific Hair Care -1.1 -5.4

Table 10 Forecast Baby and Child-specific Products Premium Vs Mass % Analysis

% retail value rsp

Premium 1.7 1.6 1.6 1.5 1.5 1.5

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