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Japan-Update

Japan diaper output falls 1st time in 15 years

Weaker demand from Chinese tourists blamed; makers look to boost China presence

Diapers line the shelves at a Tokyo store.

TOKYO -- Japanese production of disposable diapers declined for the first time in 15 years in 2016, mainly due to weaker purchases from visiting Chinese tourists.

Strong demand from overseas visitors had given the Japanese diaper market a boost in recent years, but the trend may have peaked. Still, high-quality Japanese diapers are popular in China, prompting Kao and other domestic players to seek more opportunities there.

2016 production of paper diapers totaled 21.3 billion units, down 2% on the year.

According to the Japan Hygiene Products Industry Association, production of diapers for babies and toddlers among 18 industry players slipped 6% to 13.9 billion units. It was the first slide recorded among these companies in seven years. 

Production of diapers for adults, in contrast, expanded 6% to 7.4 billion units, for the 15th straight year of increase. The growth was not enough to keep the overall figure from shrinking, however.

Since around 2012, some products have been regularly sold out in Japan, largely due to massive purchases by Chinese tourists and companies looking to resell the products. Diaper makers responded by increasing domestic production. Kao, for example, set up a new factory in Yamagata Prefecture in 2014.

With demand calming down, domestic production for 2017 will likely hold flat.

China's diaper market has been growing at a rate of about 5-10% a year. To meet robust local demand for Japanese offerings, Kao last year boosted capacity at its plant in Anhui Province. Unicharm, meanwhile, has begun selling high-end diapers in China using natural materials. 

(Nikkei)

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