Indonesia's Baby Diaper Sales Reach Trillions of Rupiah Annually

Sales of baby diapers in Indonesia reach tens of trillions of rupiah annually.

According to Euromonitor International data cited by PT Unicharm Indonesia Tbk in its prospectus (December 2019), the value of sales of regular baby diapers (nappies/diapers) and disposable pants in Indonesia reached Rp15.5 trillion in 2015.

Sales then grew to Rp20.1 trillion in 2018, with a compounded annual growth rate (CAGR) of 9.1% per year during the 2015-2018 period.

"Disposable pants are more frequently purchased in Indonesia because Indonesian parents value the ease of use. Therefore, this sub-category accounted for more than 65% of retail value in 2018," stated the management of PT Unicharm Indonesia Tbk in its prospectus.

Euromonitor International projects that sales of regular baby diapers and disposable pants in Indonesia will continue to rise with a CAGR of 10.8% per year during the 2018-2023 period, reaching Rp33.5 trillion in 2023, as shown in the graph.

"There were more than 24.2 million Indonesians aged 0-4 years in 2018, including babies and toddlers. Compared to other countries in terms of market population, Indonesia has the greatest potential for baby diaper products among other Asian countries," said PT Unicharm.

However, according to Euromonitor International, the diaper usage rate in Indonesia is still relatively low compared to several neighboring countries.

In 2018, children aged 0-4 years in Indonesia used an average of 282 diapers/disposable pants per year. In Thailand and Malaysia, the average usage rate reached 430 diapers/disposable pants per year, and in Japan 1,735 diapers/disposable pants per year in the same period.

"This indicates significant room for greater usage and consumption in Indonesia, compared to other Southeast Asian markets and developed economies like Japan," said PT Unicharm.

"Families in rural areas sometimes use washable cloth diapers instead of disposable diapers due to cost considerations. However, usage continues to increase as more Indonesian parents value the convenience of disposable diapers. With rising income levels, demand for premium products is also increasing," it continued.