Diaper Market Business Case Study; India

With 2.5 Crore baby births every year, India should have been the biggest market for baby diapers in the world. < 6% of Indian parents buy a baby diaper and we finally have a Indian diaper company doing ?150 Cr revenue????

Founded in 2011 by 3 siblings, Bumtum is scaling the right way. While all major brands - Pampers, MamyPoko & Huggies focus on tier 1 cities, high-income families, office-goers, and young parents who live in a nuclear ecosystem.

Bumtum chose a different market.

See, baby diapers have a pricing problem. In the first 2 years of an infant's life, people spend close to ?26,000. That is 13,000/ year. If you compare that to the per capita which is around ?172,000 - Baby diapers for most households are going to be a luxury.

What are diapers truly competing with? ????

Bumtum, Pampers & MamyPoko Pants are all competing with an easily available substitute - cloth (Hard sell!). But Bumtum wins the positioning by selling a premium product at an affordable price to the right customers.

— Bumtum ? ?6.14/ piece

— Pamper ? ?10.00/ piece

— MamyPoko ? ?14.58/ piece

— Huggies ? ?11.69/ piece

And it worked.

→ 90% of BUMTUM’s revenue is generated from Tier II and III

→ Stronghold markets - Lucknow, Kanpur, Patna, Ranchi, Indore.

‘Small town India’s favourite diaper brand’.

That's the marketing pitch Bumtum does.

Once it solved the pricing + marketing pitch, next was brand associations. That’s where the collaborations with "Chhota Bheem" hit the nail.

So what’s the 500 Cr revenue game? ??

1/ Distribution is key to revenue numbers.

It has both online (through Amazon/Flipkart) & offline (modern trade/supermarkets). With 35% offline sales, online is where they are doubling down.

2/ Quality for high-expectation customers.

Especially for second child parents, they will always compare Bumtum to a Huggies no matter the price. Before the 150 to 500 Cr scale it needs to fix its product leakage problem (Amazon ratings are a big red flag).

3/ Go deeper into the baby segment before adult hygiene ??

With its success in diapers, Bumtum has now begun exploring feminine hygiene care with Freeme, adult hygiene care with Elduro, and preteen skin care with Amigo, all operating under their parent company, Familycare Consumer.

However, the brand seems to be doing too many things.

Going from baby care to adult hygiene means selling to different kinds of customers. So that begs the question - Why not build a product line that tries to cross-sell to the same customer - parents of a newborn?

Interesting time for a niche market player (relative to the world) building first ?150 Cr to ?500 Cr revenue pipeline & expanding the category in the Bharat audience.

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Source: GrowthX?