Japan's second-largest diaper maker is apparently struggling to meet surging demand from Tiger Moms.
Kao Corp.'s breathable Merries diapers have gained a reputation abroad for being good for a baby's development, appealing to mothers who want to maximize the head start they give their children, Kao Chairman Motoki Ozaki said in a recent interview.
Mr. Ozaki said Japanese diapers are selling much better than expected in China, and also in Russia, fetching up to double their selling price in Japan--though only the made-in-Japan nappies are attracting premium prices, he added, not locally made ones.
'It makes sense that no diaper rash means a happier baby who will develop more quickly,' Mr. Ozaki said. 'But we have been completely taken aback by the strength of demand.'
To meet that demand, the maker of cosmetics, detergent, and sanitary products says it will spend ¥5 billion on building a new diaper factory in northern Japan, while raising capacity at its two existing plants. The new diaper factory will be the company's first in Japan for 12 years.
Sales of Merries diapers made in Japan jumped by more than 10% in the year ended in December, despite a stagnant market where bigger rival Unicharm Corp.8113.TO -0.20% has seen no growth. Those sales could expand even more this year, Mr. Ozaki said.
Kao has a 30% market share in Japan compared with Unicharm's 34%, but it is a newcomer on the global stage. Half the international market is taken by P&GPG +0.01% and Kimberly-ClarkKMB +0.86%, while Unicharm comes in at No. 3 with 10%, according to Unicharm figures.
But Kao is not counting on Tiger Mom demand to project its international presence over the long term. Lasting growth will come from lower cost products for Asia's rising middle classes, Mr. Ozaki said, speaking on the sidelines of a consumer goods forum in Tokyo.
In an effort to catch up to Unicharm, Kao built a factory in China last year to make diapers that sell at roughly half the price of Japan-made ones. It is also building another ¥10 billion diaper factory in Indonesia to begin operation at the end of this year.
'The high-end users help give our diapers brand value, but we will continue to push hard in the volume zone in Southeast Asia,' with cheaper diapers, Mr. Ozaki said. 'Diapers transform lives by lifting a huge burden. So there's huge growth potential there.'
Kao Corp. 花王的妙而舒(Merries)透气纸尿裤。尾崎元规说，日本纸尿裤在中国的销售远好于预期，在俄罗斯也是如此，并促使他们将该产品在日本的售价提高了一倍，但只有日本制造的纸尿裤提价了，中俄当地制造的纸尿裤没有提价。
花王在日本纸尿裤市场的占有率为30%，尤妮佳为34%，但花王在国际市场还是新来者。据尤妮佳的数据，国际纸尿裤市场有一半的市场份额由宝洁公司(Procter & Gamble Co.)和金佰利(Kimberly-Clark co.)占据，尤妮佳则位居第三，市场份额为10%。