Analysis: Condom-shy India arouses interest of global contraceptive makers
21/09/2023 09:35
By Kashish Tandon
BENGALURU, Sept 21 (Reuters) - Global contraceptive
makers are betting on condom-shy India becoming their biggest
growth market, following the blockbuster IPO of a domestic
prophylactic maker just weeks after the U.N. said the country
would become the most populous by mid-year.
With population decline and aging societies in major markets
such as Europe, Japan and China, condom manufacturers are taking
advantage of modern marketing tools to reach India's huge, young
and tech-savvy demographic in both urban and rural settings.
Such is the trend that the market is set to more than double
to $1.7 billion by 2030, showed data from GrandView Research.
"The Indian market is very attractive. The condom usage rate
there is still low," said Kazuhiro Kamio, chief of overseas
sales and marketing at Japanese condom maker Okamoto Industries
5122.T . "If non-users can be educated on how to use them,
given the population size, the volume would be tremendous."
Strong economic growth, willingness to pay for premium
goods, social media use and evolving attitudes to sex are
changing how condom makers view a country where talking about
sex is largely taboo, condom ads are banned from prime-time TV
and rural consumers are sceptical about contraceptives.
As few as 5% of sexually active men use condoms as a regular
form of contraception, and as many as 2% were not familiar with
condoms at all, showed a government survey conducted in 2020. By
contrast, 19% of U.S. men use condoms every time they have sex,
showed data from the National Center for Health Statistics.
The Indian market has the potential to be the world's
biggest, said Arvind Singhal, chairman at consultancy Technopak
Advisors. "India does not just have the largest population base
but also the largest demographic relevant for such products."
POPULATION GROWTH
Condom makers would follow other global firms in chasing
India's growth in disposable income. World Bank data showed
that, in 2021, per capita gross domestic product crossed $2,000
- a threshold at which, in China in 2006, consumption jumped.
Moreover, India was set to overtake China this year to
become the world's most populous country, the United Nations
said in April. Almost one billion Indians are aged 15-64 years.
"We believe that with such a population and a very young
population, India has a lot of opportunity," said Chief
Executive Miah Kiat Goh at Malaysia's Karex KARE.KL , the
world's largest condom maker.
Karex aims to partner local brands to fuel expansion whereas
Okamoto, whose condoms are available in India online, wants to
build brand awareness and put its products on store shelves.
Britain's Reckitt Benckiser Group RKT.L has launched new
products under its Durex brand and expanded its "Birds and the
Bees" rural marketing campaign.
Church and Dwight CHD.N , owner of top U.S. brand Trojan,
plans to officially enter India which it regards as one of the
most lucrative markets, said a person familiar with the plans,
declining to be identified as the matter was not yet public.
Church and Dwight did not respond to a request for comment.
SOCIAL MEDIA
India's market leader is domestic manufacturer Mankind
Pharma MNKI.NS with a 33% share, ahead of Reckitt Benckiser at
14%, TechSci data showed. Mankind conducted a $520 million
initial public offering (IPO) in May and saw its stock soar 32%
on its market debut, valuing the company at $7 billion.
The maker of Manforce condoms has been boosting its online
presence to better cater to urbanites and investing in
local-language advertising to reach more rural consumers. Like
rivals, it has made more use of social media influencers and
events.
Mankind did not reply to Reuters' queries on how it planned
to respond to increased competition from foreign rivals.
Social media "has helped target the audience more sharply
which was not possible on mass media especially with rules
regarding time of the day when condom ads were shown," said
marketing professor Ashita Aggarwal at S.P. Jain Institute of
Management & Research.
Reflecting the changing approach to marketing, sales of
premium condoms have grown 21% annually over the past five
years, showed data from HDFC Securities Institutional Equities.
Sales have also benefited from a broader cultural shift
among the younger end of the target market.
A rising number of Indians "are losing faith in the
institution of marriage and do not aspire to get married at all,
or at least till their mid-30s," said Pranita Bhor of Grand View
Research. "This big cultural shift has led individuals in their
late 20s to practice premarital sex."
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
India's condom market https://tmsnrt.rs/3OCvewM
India's younger population https://tmsnrt.rs/3DFe2As
India's young demography https://tmsnrt.rs/46h7iVC
Contraceptive methods used https://tmsnrt.rs/3QEJyq7
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Kashish Tandon in Bengaluru; Additional reporting
by Sumit Khanna in Ahmedabad and Rocky Swift in Tokyo; Editing
by Dhanya Skariachan and Christopher Cushing)
((Kashish.Tandon@thomsonreuters.com;))