Latin America will become hot spot for diaper makers as economy recovery is taking place. Bonafide Research
Feb, 01

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Latin America will become hot spot for diaper makers as economy recovery is taking place. Bonafide Research


According to Regional Economic Outlook Update by The International Monetary Fund (IMF) January 2018, economic prospects for the region are generally improving and modest growth is expected in 2018 and 2019. It may increase per capita income of persons which in turn will affect the consumer goods business including diaper.
IMF has also predicted that Recent trends in the world economy and financial markets means good news for the Caribbean and Latin America. Global growth and trade are on an upswing, and expect the momentum to continue in 2018. Stronger commodity prices have also helped the region rebound. Further it said that consumption and exports were the main growth drivers last year (2016) and the recovery is broad-based across the region. Many established players of North America are seeing growth opportunities in Latin America after recovery from economic crisis in most of its countries.
According to report on 'North America and Latin America Baby & Adult Diaper Market Outlook, 2023' published by Bonafide Research, Latin America is going to increase by more than 7% in overall diaper market which include baby diaper as well as adult diapers. Its baby diaper market four times than adult diaper in this region. Type-wise, Disposable diapers have captured more than half whereas Swim Pants and Biodegradable diapers are going to constitute around 30% of market at the end of 2023. Brazil being largest economy of Latin America is the major contributor in 2017 and going to hold same position in future. Argentina is highly penetrated, having penetration above 65%. Peru, Ecuador will emerge as significant destination for diaper manufacturer as they have lower penetration below 30% which is low as compared to developed countries.
Till 2012, everything was online in Latin America but then economy crisis started in most of the countries including Brazil, Argentina, Venezuela, Colombia etc. Brazil economy has shown stronger signs of recovery, it is expected that consumers will start purchasing premium products again in the forecast period. Diapers sales were moving towards premium products until the recent crisis hit the country, and it is anticipated that the trend will gain relevance again in the coming years. In Argentina, import restrictions were relaxed and in the short term they are expected to be completely eliminated during 2016. This will allow the launch of new brands and even the entry of others that were discontinued over the crisis period, such as Kimbies by Kimberly-Clark. Therefore, many new launches and innovations are expected that will result in stronger competition.
Different is the case for Venezuela which is suffering from inflation of 1600%. The International Monetary Fund has projected that Venezuela’s hyperinflation will soar to 13,000% in 2018, from an estimated 2,400% in 2017. All these have no signs for diaper manufacturer to make more diapers or new entrant to foray in diaper manufacturing in Venezuela. In the matter of Peru, Once one of Latin America’s fastest growing economies, it's growth slowed sharply early 2017 in the wake of destructive flooding and a graft scandal that stalled public work projects. The cost of diapers remains excessively high for a large segment of the Colombian population, considering that poverty is still widespread in the country. In recent years, growth in per capita sales of diaper has been driven by the growth seen in the disposable incomes of the country’s middle class consumers. However, growth rates in the category have been suppressed somewhat by the deceleration of the birth rates end the unfavourable performance of the Colombian economy. Thus, more or less every country is going to contribute to the diaper industry growth in near future facing every challenges come forward in their ways.