Euromonitor: Japan's adult incontinence online sales up 30% in first three quarters of 2023 from year-ago period, driven by expansive offerings, convenience of e-commerce that offers discreet transactions; lower-priced products see strongest price hikes

Sample article from our Tissue & Hygiene

December 15, 2023 (press release) –

As inflation begins to cool down worldwide due to slower economic growth, stricter monetary policies of banks and supply chain improvements, Japanese consumers are still struggling to deal with the country’s inflationary environment as households are dealing with unfamiliar rises in consumer goods prices while not seeing wages keep pace. According to Euromonitor’s Q4 forecast, inflation in Japan is expected to increase to 3.2% in 2023 before easing to 1.7% in 2024. While inflationary relief is hopefully in sight, the rises in prices and perception of how brands and suppliers have passed on costs can have lasting impact. Using stock keeping unit (SKU) data and data from Euromonitor’s new e-commerce system, we’ll dive into how prices and sales have performed in the first three quarters of 2023 for an increasingly important product category given Japan’s demographic challenges, adult incontinence products.

Adult incontinence online sales continue to thrive in 2023

As the pandemic fostered a heightened sense of familiarity and convenience with online retail in Japan, the upward trajectory of e-commerce sales of adult incontinence products has not only persisted but exhibited a noteworthy surge. E-commerce sales data for the initial three quarters of 2023 reveal impressive 30% growth compared to the corresponding period in 2022, and with sales peaking in the fourth quarter of 2022 due to standard year-end and holiday shopping, further online migration is expected for the year end. This surge can be attributed to several factors, including the expansive array of offerings and comprehensive product education available online. Furthermore, the convenience of online platforms, offering ease of repeat purchases of bulky items and discreet transactions for both caregivers and users, contributes significantly to this growth. Anticipating a continued shift towards online purchases, especially as digitally familiar users increasingly become consumers of these products, and with the ongoing easing of online payment barriers for older populations, companies and brands find themselves strategically positioned to leverage the key advantages of online pricing and product availability.

Prices and product availability rise in tandem online

Monitoring inflation and price changes can be done from a variety of perspectives, first from a topline perspective, we can see that the average price for this basket of SKUs across a variety of retailers increased from JPY3,486 at the beginning of 2023 to over JPY3,655 at the end of Q3, an increase of 4.9% which is already significantly higher than the baseline inflation rate for the country which is expected to be 3.2% by the end of the year. While any time price increases are greater than an average inflationary rate, it can suggest that those consumers are already facing a disproportionate financial burden. However, with adult incontinence products, the impact of these price increases can be especially difficult to deal with, given that ageing demographics have limited financial flexibility and can often be on fixed incomes.

We can also observe a noteworthy surge in the total number of SKUs, underscoring a robust demand for enhanced product variety within the adult incontinence products market. This heightened demand is met by suppliers offering diverse options, including various types of pads, pants or taped products catering to both moderate and heavy users. Furthermore, the indication of strong supply dynamics is evident as online retailers strategically expand their offerings to encompass larger, bulkier items, contributing to the observed increase in the average SKU price. This interplay between demand, variety and supply dynamics shapes a dynamic landscape within the online marketplace for adult incontinence products.

Lower-priced products seeing strongest rises in prices

While the average price of the basket of adult incontinence SKUs examined shows an increase of 4.9% shown in the previous chart, further examination of the price increases by different price points can further demonstrate where consumers are particularly seeing inflationary pressure. As previously mentioned, examining the pricing dynamics of a large sample of SKUs can often be skewed by large, bulkier items that are listed on websites but perhaps not as frequently purchased by consumers. For example, while the average price was JPY3,655 by the end of September, the median or 50th percentile point was significantly less at JPY2,510, but did show a similar price increase of 5% in just nine months.

However, tracking price increases at either larger price points like the 75th percentile or lower prices at the 25th percentile can provide more direction for companies and brands looking to provide support to consumers and improve their products’ image and reputation. Here, we can see that the lower-priced SKUs showed the strongest price increases with the 25th percentile increasing by a rate of 7%. Businesses, brands and retailers must diligently monitor these diverse price points and assess their impact on consumers, especially as price increases can disproportionately affect those with lower income. Even in a nation known for brand loyalty like Japan, there’s a risk of consumers shifting allegiance to brands and products that offer affordable and stable pricing to better meet their needs, especially given all consumers’ acceleration towards online purchases.

Please see our E-Commerce page for more information on methodology and coverage, or download our on-demand webinar, Mastering E-Commerce Growth: How to Win Online Amid Uncertainty. Further insights into key economic and inflation trends are available at Global Inflation Tracker: Q4 2023 and Global Economic Forecasts: Q4 2023.

Note: E-commerce sales include data from Amazon Japan, Bic Camera, Cocokara Fine, Cosme, Matsumoto Kiyoshi Rakuten, Yahoo Japan and Yodobashi Camera. Sample based on SKU prices found in Euromonitor International’s e-commerce tracking tool Via with data extracted in November 2023. Please note that due to ongoing improvements to the AI-led product matching of SKUs to categories, supplier, and brands, data and SKU counts can be revised based on system updates. SKU counts used for the analysis include: n=26,514. Adult incontinence includes a variety of protective products for different levels of bladder or bowel adult incontinence. Products with different levels of absorbency are covered, including pads, pants/protective underwear, briefs, undergarments and pant/pad systems.

 

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Dan Rivard
Dan Rivard
- VP Market Development -

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