Rich Chinese Moms Draw Daio Paper’s High-End Feminine Products

(Nikkei Asia) — Daio Paper will start selling feminine hygiene products in China by 2022, using the brand recognition built through its high-end baby diapers to attract wealthy urban women.

The manufacturer will churn out sanitary pads and other products locally, installing dedicated equipment at a factory that opened last September in coastal Jiangsu province. The items will be sold at stores in big cities such as neighboring Shanghai and online.

China’s market for sanitary napkins reached roughly 700 billion yen ($6.44 billion) in 2019, more than nine times that of Japan, Daio said. Japan’s Unicharm and local giant Hengan International Group together command a little over 20% of the Chinese market, research firm Euromonitor International said.

Daio hopes name recognition from its GOO.N baby diapers will help the company snare 3% to 5% of the market by fiscal 2030.

Daio will increase its supply of wood pulp, a raw material for sanitary napkins. The company’s flagship Mishima Mill on Japan’s southern island of Shikoku will begin producing fluff pulp, used as an absorbent, in September 2022 with initial output of 7,500 tons a month.

At roughly 30 billion yen, Chinese sales account for about half of Daio’s overseas revenue. The company fully shifted to Chinese production for its main baby diaper products in 2017 and now plans to expand the lineup to other paper products, including facial tissues, starting in fiscal 2021.

Daio is the top maker of personal paper products, such as toilet paper and tissues, in Japan. Demand remains robust for now thanks to the pandemic. But the Japanese market is seen declining in the long term as the population dwindles. By focusing more on China, Daio aims to lift overseas sales of personal-care products, including baby diapers and feminine hygiene items, to 300 billion yen by fiscal 2026, which would account for 30% of total sales.

This article was originally published by Nikkei Asia

Contact editor Yang Ge (geyang@caixin.com)

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