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We conducted an online survey (“Mom & Baby Shopper Survey”) in February 2018 to understand the shopping behavior of Indonesian females (N=1,144), specifically mothers, when buying items in the Mom & Baby product category i.e. diapers, milk formula, toys, etc.

The results revealed whether these women preferred to buy baby products online or offline, how much they spent on average per order, what item they purchased on a frequent basis, their age, the family household income and what would convince them to increase shopping frequently.

The survey sheds light on the following topics:

  • What factors are causing consumers in the Mom & Baby category to continue to buy offline rather than online?
  • What aspects of ecommerce marketplaces are most important to Indonesian female shoppers and which marketplaces are most popular?
  • What items do Indonesian female consumers prefer to shop for online in the Mom & Baby category?
  • How do Mom & Baby category consumers start their online purchasing journey?
  • What is the shopper profile and annual spend of Mom & Baby shopper in Indonesia?

Chapter 1: The Online Potential for Mom & Baby Brands in Indonesia

The birth of a baby is a life changing event for a household in regards to its finances, hours of sleep received per night, and especially, the ongoing adjustment to becoming parents.

For every minute that passes, approximately 250 babies are born into the world.

Indonesia is a country with a population of more than 260 million and on average, 2.44 births per woman in 2015/2016 – the fourth highest among all Southeast Asian nations. It is approximated there are 1.6 million births per year in the country.

Figure 1: The average number of live births per woman in Southeast Asian nations. Source: Statista

To care for each new life, parents need to invest heavily in categories like diapers, milk formula, toys, clothing, education and especially, time. Over the next eight or ten years as the child grows older, starts school and requires different products and nutrition, certain shopping habits in the parents have already cemented.

This includes what brands they trust, what products they will recommend to friends and family and which channels to buy them from.
As the median age of new mothers in Indonesia at first birth is 22.8 years of age, younger than found in Thailand, Singapore and the Philippines, she is commonly already digitally savvy.

Indonesia is predicted to have the fourth largest middle-class consumption on a global scale by 2030.

ecommerceIQ

Figure 2: Middle class consumption around the world. Source: The Emerging Middle Class in Developing Countries, Brookings Institution

Considering the country’s middle-class household count is also expected to rise to 23.9 million in the next 12 years from 19.6 million in 2016, retailers are looking to capture common characteristics of middle class consumers – more spend on travel, holidays and family.

The purchasing power of Indonesians will also rise for the next two years as the country’s gross domestic product is expected to reach US$1.7 trillion by 2020 (Figure 2).

ecommerceIQ

Figure 3: Forecasted GDP of Indonesia is expected to reach US$1.7 trillion in 2020. Source: The Economist, World Bank, Badan Pusat Statistik Indonesia.

This is why companies are allocating massive budgets to build credibility with customers early in the journey of motherhood and more importantly, influence the behavior of future generations.

Not only does Indonesia house 132.7 million internet users, 1 out of 4 of the internet users in the country is a mother (Google & Kantar WorldPanel Indonesia). The number is expected to rise over the next three to five years as the majority of the population are females aged 10 to 19 years of age (Figure 3), meaning Indonesia can also expect a rise in new mothers.

ecommerceIQ

Figure 4: Indonesia’s demographic by age and gender. Source: Central Intelligence Agency

All of this makes the Mom & Baby category a highly attractive and rampant industry in Indonesia in the coming years.

How can companies capture new mothers and help them adapt to parenthood?

Sign up here to receive the full report of Digital Mom & Baby Shoppers Profile in Indonesia.

*Introducing the eIQ BrandData series that shares insights to different brand strategies online and how they’re performing on marketplaces across Southeast Asia in collaboration with data tool BrandIQ.

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A peek into Thai customers’ sentiment for BabyLove

Using data tool BrandIQ, a total of 4,958 product reviews from customers that purchased BabyLove products on Lazada Thailand were analyzed. The sentiments of the reviews were divided into two: Positive and Negative, based on keywords like ใช้งานดี (good quality), รอนานมาก (slow delivery), ถูก (cheap), identified in the review.

For BabyLove products, out of 175 keywords picked from reviews, 136 or 77.71% of them are positive.

BabyLove review

Overall sentiment for BabyLove products on Lazada is positive

The keyword “ส่งเร็ว” (meaning fast delivery) appeared the most in the reviews with a positive sentiment, appearing 1,528 times in 1,522 BabyLove product reviews.

The second top keyword “ถูก” (meaning cheap) had 776 appearances. The third positive keyword “ใช้งานดี” (meaning good quality) appeared 430 times.

Below is an example of a BabyLove product review with positive sentiments:

BabyLove review

A consumer review with high rating for delivery and product quality. [Translation: The delivery was fast and the product quality is good. As a mom, I’m very happy.]

Meanwhile, keywords with bad sentiments made up 22.29% of total keywords. Some of the keywords are ห่วยมาก (bad), แย่มาก (sucks), and รอนานมาก (slow delivery). Overall, customers using these keywords are talking about the pain points of ordering the products on Lazada rather than the quality of the product.

One example of a review with bad sentiment is:

BabyLove review

A consumer review with low rating caused by stock discrepancy.
[Translation: I’ve ordered it from Lazada 4 days ago, turned out it’s out of stock? How can something that I’ve already ordered (when it’s available) went out of stock? This sucks. And the delivery is also slow. It’s very bad.]

Controlling customer sentiments

The top two factors that greatly affect the sentiments felt by the BabyLove’s customers when they make a purchase on Lazada are delivery time and price. They are things that a brand can control by having an official presence on the marketplace.

On its official store, BabyLove offers an average discount of 26% and drowns out grey market sellers on the marketplace.

Its products are also fulfilled and delivered by Lazada, which typically means faster delivery times.

BabyLove review

BabyLove’s products on its official store on Lazada Thailand are fulfilled by Lazada

Download the full infographic here.


HOW IS YOUR BRAND PERFORMING ON SOUTHEAST ASIA’S TOP MARKETPLACES?

*Introducing the eIQ BrandData series that shares insights to different brand strategies online and how they’re performing on marketplaces across Southeast Asia in collaboration with data tool BrandIQ.

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The first installation of the BrandData series will take a look at the top three diaper brands in Thailand (MamyPoko, Babylove, and Huggies) and provide an overview of their strategies on the country’s top e-marketplace, Lazada.

With the rise of internet savvy mothers in Thailand; a cohort that places value for money and convenience at the heart of their purchasing decisions, it makes sense that more companies targeting this demographic are looking to reach them online.

Thailand’s $200 million baby diapers market is dominated by Unicharm, specifically by its brand MamyPoko, and BabyLove by DSG International. They each offer a total of 15 product lines on their official stores on Lazada, for example, MamyPoko Day, Night Pants, Babylove PlayPants, and SmilePants.

Meanwhile, direct competitor Huggies offers only two product lines on Lazada: Gold and Little Swimmers.

As more than 82% of babies go through at least three diaper changes a day, most families buy this commodity in bulk. Each of the three brands leverage this consumer behavior by providing bundling options for their products and offer a cheaper average price per item the larger the package.

Diapers brands Lazada Thailand

Average selling price and discounts are given for Thailand’s top diaper brands on Lazada TH. Source; BrandIQ

MamyPoko and BabyLove offer the highest discount of on average 26 – 28% off, but it’s important to note that Huggies starts at a lower average selling price compared to them.

What does this mean?

MamyPoko and Babylove have larger product lines, provide more options, and focus on selling their products in bigger packs. Meanwhile, Huggies’ offerings are more concentrated with fewer bundle options compared to the other two.

These two strategies may impact the brands’ performance in search results at the category level if we’re looking at the “Diaper & Potty” category on Lazada Thailand. MamyPoko and BabyLove dominate the first row of the most relevant products in the category.

Diapers brands Lazada Thailand

Mamypoko and Babylove products dominate the first page of Diapers and Potty category in Lazada Thailand

Download the full infographic here.


HOW IS YOUR BRAND PERFORMING ON SOUTHEAST ASIA’S TOP MARKETPLACES?

THE BACKGROUND

Unicharm has been manufacturing feminine and baby care products in Japan since 1974. The company’s origin can be traced back to Taisei Kako Co., Ltd where it found its niche by selling feminine napkins in 1963. By the late 1990s, Unicharm had successfully expanded its business overseas.

Spurred by rising income levels and populations in Asia, Unicharm has become the leading company for the feminine, baby, and healthcare categories in Asia and No. 3 in the global market thanks to portfolio brands like MamyPoko, Charm, Sofy, and Wave.

Unicharm Southeast Asia

In 2011, the company bought a majority stake of 51% in US-based pet product and supply maker Hartz from Sumitomo Group to branch out its reach in household categories.

The company’s success caused it to become too comfortable and made it vulnerable to competition. What was Unicharm’s response?

THE CHALLENGES

“Signs of a market change started emerging around 2013,” recallsUnicharm President and CEO Takahisa Takahara. “We should have responded a little sooner.”

Decades of lounging in its throne as Asia’s market leader for inexpensive products lulled Unicharm into a false state of security that eventually caused it to slip behind competitors like Kao and Daio Paper for disposable diapers in key markets like Indonesia and China.

The company’s early entrance to Indonesia when the country’s GDP was still low allowed it to gain market share and its cheap range of products was introduced to first-time consumers in the small remote islands.

As the country’s living standards improve, the citizens can afford to become more selective and choose higher-end diapers. The company’s market share has reportedly dropped to below 60% from the previous 70%.

Unicharm Southeast Asia

Unicharm’s operating profit decreased overtime in Asia. Source: Nikkei

Meanwhile in China, the company has watched its market share fall to 8%, half of what it was three years ago.

“With the growing preference there [China] for high-end products and the rapid spread of ecommerce, high-quality Japanese diapers have become more popular, said Masashi Mori, an analyst at Credit Suisse Securities (Japan).

What’s Unicharm doing about all of this and can it make a comeback?

THE INNOVATION

Last year, Unicharm began to introduce premium line called ‘Natural Moony’, Japan’s first disposable diaper with a surface sheet containing organic cotton, to reserve a seat in the higher-end product category.

In addition to an official launch event in Tokyo, the company also held a Super Brand Day event on one of China’s biggest marketplaces, Tmall.

Unicharm Southeast Asia

Unicharm Chief Executive Officer Takahisa Tahara on Moony launch in Tmall

“We propose new standards for the way you select diapers by putting Natural Moony on the market under the slogan of ‘selecting diapers is selecting materials’,” explained Yoko Kawakami, Assistant Brand Manager at Unicharm’s Global Marketing department.

Unwilling to repeat the same mistake in China by catching onto ecommerce too late, the company has an official presence on e-marketplaces such as Lazada and 11street in Indonesia and other Southeast Asian markets.

Unicharm Southeast Asia

Unicharm’s official store in Lazada Indonesia

The brand was also one of the first available on Amazon Prime after its long-awaited launch in Singapore last month.

Unicharm has taken to publicity stunts to reach the eyes of its consumers by celebrating its iconic mascot’s birthday in Singapore by gifting new mothers with a care-package for newborns at the Thomson Medical Center.

On its 15th anniversary in Thailand, the company’s Mamypoko brand launched Poko Chan Point, the diaper market’s first rewards program that allows consumers to redeem free gifts from collecting points from a code attached to purchased products.

Unicharm Southeast Asia

MamyPoko’s Thailand Facebook post

“We believe that the key success mix includes the right product that best addresses customers’ needs and the right marketing programmes. Based on this belief, we will continue to bring to our customers the right programmes that will enhance their experience with our brand,” said Unicharm Thailand Managing Director Tadashi Nakai.

THE STRATEGY

When the brand first entered India in 2009, it was the first to offer underwear-shaped diapers ahead of giants like Kimberly Clark and P&G. The reward was an 85% jump in sales and 42% in modern trademarket share.

“When there’s a low penetration or usage in certain categories, most companies do the obvious — try to develop the market with existing and affordable products,” said Devendra Chawla, Food and FMCG President at Future Group.

“Unicharm tried a different route by launching innovative products, which not just helped expand the market, but also in the process, diverted the entire segment towards their portfolio style, taking leadership while doing market development simultaneously.”

Unicharm believes in employing the same proven technique for the other emerging markets such as the Middle East, and Africa.

“The setting-up and acquiring of business operations in potential countries in the region is part of the key strategy set to grow our diaper and sanitary napkin business in Asia, particularly in emerging markets,” said Takumi Terakawa, Managing Director of Unicharm Thailand.

The company has also looked beyond Southeast Asia’s most popular markets. In 2013, Unicharm acquired Burmese diaper company MyCare that holds over 50% market share in the country.

In a company statement regarding the decision, “our management decision to acquire Mycare has been on the grounds that new markets are being created and overwhelming share is further secured by accelerating the speed of brand penetration through the expansion of product availability.”

THE FUTURE

Unicharm is targeting a consolidated plan of $7.2 billion in 2020 with sales growth at 7% CAGR and plans to tackle Asia first before pushing a global agenda.

Unicharm Southeast Asia

“Our goal is to build a dominant market presence in Asia, the world’s largest market for nonwoven fabric and absorbent material products,” said CEO Unicharm Takahisa Takahara.

“This will be a key step toward achieving our vision of becoming a leading company in the global market.”