No Rash Moves: Kao Aims To Bolster ‘Made In Japan’ Cachet In China Diaper Market

www.oann.com | 7/9/2019 | Staff
moemajor (Posted by) Level 3
TOKYO/BEIJING (Reuters) – Like many urban Chinese professionals with young children, Shenzhen-based fintech executive Jacob Cao is a fan of Japanese diaper brands including Kao Corp’s Merries.

While he knows some Merries are made in China, with little difference in quality compared with higher-priced versions from Japan, he prefers the latter.

Ones - Father - Twin - Girls

“I just get the feeling the Japan-made ones are better, to be honest,” said the father of 20-month old twin girls.

The perception that Japanese baby products are superior owes much to Chinese aversion to homegrown goods after a tainted milk formula scandal in 2008. It has served Kao well, propelling it to the No.2 spot in the world’s biggest diaper market despite a late entry in 2009.

Kao - Sales - Clampdown - Beijing - Year

But Kao’s sales have been hit after a clampdown by Beijing last year on “daigou” merchants, who buy goods abroad for resale online in China. More reliant than rivals on daigou sales, its baby diaper sales tumbled 14% in the first half compared to the same period a year earlier, the company said this week.

To preserve and bolster the made-in-Japan cachet, Kao began selling a premium line of “Tender Love” Merries in June, produced in its home market but only for sale in China.

Fabric - Diaper - Yuan - Pack - Price

Made of soft, silky fabric, they cost 4.9 yuan per diaper or roughly 200 yuan ($29) for a medium-sized pack of 40, more than double the price of standard Merries and considered too expensive to market in Japan.

“Our strategy in China is to go for the premium market. We don’t want to go for volume,” said Tomoharu Matsuda, Kao managing executive officer in charge of consumer products.

Products - Competition - Chinese - Brands - Diapers

Promoting made-in-Japan products comes amid emerging competition from Chinese brands in premium diapers and despite Kao’s longer-term goal of producing all diapers for the Chinese market in China, which would help it manufacture and distribute more...
(Excerpt) Read more at: www.oann.com
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