TOKYO -- Japanese-made disposable diapers are selling in China for nearly double prices seen in Japan as high-income consumers swear by the products for their safety and reliability.
Kao's Merries line currently goes for around 2.3 yuan (34 cents) per medium-sized pair, more than the roughly 20 yen (19 cents) price in Japan. Although the Chinese price reflects shipping and customs expenses, the price gap is significant, even more so considering local income levels.
Disposable diapers are something of a luxury in China, says the Japan Hygiene Products Industry Association. Still, usage ranges between 70-80% in urban areas. Even in poorer inland regions, the figure comes to about 50%.
This is because many consumers wish to buy safe products for their children. An increasing number of middle-class earners seek Japanese diapers for their superior breathability and absorbency despite their higher prices and the country's slowing economy.
Trade data shows that Japanese exports in the disposable diaper product category, which includes feminine hygiene products, surged 93% by volume in 2015. China is also home to many parallel importers who procure diapers by purchasing them in retail stores in Japan.
Over the long run, however, many believe local manufacturing will eventually become dominant, just as most daily-use products are made where they are sold. Because diapers are bulky to ship, the rationale for making them locally is even more compelling.
In fact, Unicharm and other Japanese makers are boosting production in China, and selling them more cheaply than their Japanese-made peers. Procter & Gamble and other Western companies are also moving aggressively into China. And local producers are popping up. As Chinese diaper production grows, prices will come under downward pressure.
Japanese-made diapers will need to maintain their brand power if they are to continue enjoying strong demand in China. For this, cooperation with firms that produce nonwoven fabrics, highly absorbent plastics, adhesives and other materials will be indispensable.
"Japanese companies have the ability to make products starting from the base materials," said Masashi Mori, research analyst at Credit Suisse Securities (Japan). "They need to enhance their products' performance" by making the most of that advantage, Mori added.