Locally made baby diapers gaining popularity | The Daily Star
12:00 AM, October 28, 2015 / LAST MODIFIED: 12:00 AM, October 28, 2015

Locally made baby diapers gaining popularity

Local brands offer competitive prices, good quality

Local manufacturers are gradually gaining a foothold in the growing baby diaper market for low prices and high quality, despite competition with numerous imported brands.

"We are grabbing a bigger market share by improving quality of our products," said Malik M Sayeed, head of marketing of Square Toiletries, which launched baby diaper Supermom nearly a year ago.

Square Toiletries, a concern of Square Group, is the latest entrant after Bashundhara and Incepta made a foray into the market which was previously dominated by imported brands.

Sayeed said local manufacturers had a 15 percent market share four to five years ago; the rest was of some imported brands such as Pampers, Molfix, Huggies and MamyPoko.

The market for baby diaper is worth between Tk 250 crore and Tk 350 crore a year, growing at 25 percent to 35 percent a year, according to industry insiders.

The market got a boost from an increase in the number of women participating in economic activities, particularly in the formal sector, and rising purchasing capacity of people.

Locally made products now enjoy a 40 percent share of the market, said Mustafizur Rahman, deputy managing director of Bashundhara Group.

"Imported diapers still dominate the market, but locally made ones are gaining ground by competing in terms of price and quality. That is the good news."

The current duty benefit on the import of raw materials for diapers, which was given in fiscal 2014-15, provides impetus to local manufacturing, he said.

The duty privilege gives manufacturers the chance to offer lower prices, said operators.

"The main reason behind the rising demand for the local brands is the price gap," said Hasibul Islam, a salesman at Nitya Panya, a retailer at Lalbagh in the capital.

"In the past, the demand for the item was low. Now, even lower middle income families use diapers for their babies for convenience."

Encouraged by the rising demand, another local firm ACI Ltd also plans to enter the market.

"We may launch our products within a year," said Md Quamrul Hassan, business director of ACI Consumer Brands, a unit of ACI Ltd.

He said ACI sees prospects as less than 2 percent of children use diapers in Bangladesh. "So, there is a huge opportunity.”

Bangladesh is expected to be one of the biggest markets for baby diapers by 2020, according to industry estimates.

ALLEGATIONS OF UNDER-INVOICING

Industry operators allege that some businessmen import diapers by under-invoicing, to evade duties and VAT and sell imported diapers at much lower rates.

"Our market share will rise further if the government takes steps to stop under-invoicing during import," said Rahman of Bashundhara.

The government has cut import duty on some raw materials; but still there are some raw materials where the import duty remains high, he said.

"We are running below our capacity. If the government plugs the loopholes in imports and reduces import duty of all raw materials, it will help us achieve self reliance in the diaper market."

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