TOKYO -- Japanese personal care group Unicharm will double exports of masks by 2023 to answer Asian demand for functional products, particularly those carrying the "Made in Japan" label.
The company will ramp up exports to Asian markets such as Indonesia, Thailand and Vietnam. The products will be sold in high-income Saudi Arabia as well. Unicharm will use sales channels that already exist for diapers.
The company will sell Cho-Kaiteki and Cho-Rittai brand masks. The company produced 1.3 billion units of the two products combined last year. About 10% were sold overseas, with most manufactured in Japan.
Cho-Kaiteki uses silk blends in ear straps to reduce discomfort and the masks keep out virus droplets at a high rate. Cho-Rittai is shaped so that the mask does not stick to the mouth, and it uses a breathable filter. These features will help Unicharm compete with Chinese-made masks that are prevalent in overseas markets.
The packages will feature more prominent logos than the one seen in Japanese stores. The products will leverage the brand strength built up by Unicharm's diapers. Depending on the product, the packaging will feature the Japanese flag with a "Made in Japan" mark.
Unicharm's masks sell for five times the average price in other Asian markets. The company will target mainly middle- to high-income customers in urban areas.
"There is strong demand to wear high-quality masks, even if they are expensive," according to a company representative.
Unicharm generated 727.5 billion yen ($6.6 billion) in sales last year, with 60% coming from overseas. The company operates factories in China, Vietnam, Thailand, Indonesia and India, among other places. The plants make products that match local price ranges.
In Indonesia and Thailand, Unicharm commands the top share in baby diapers, adult incontinence products and feminine hygiene products.
Unicharm has sought to market its masks abroad as a solution toward air pollution. Now consumers have latched onto masks as a daily health necessity because of the coronavirus pandemic. Starting last year, Unicharm prioritized mask supplies for Japan in the face of tight supplies. Now that the issue has improved, the company will embark on full-scale exports.
Last year, Unicharm kept its plants running around the clock to answer ballooning domestic demand while installing new equipment. The extra capacity will be repurposed for exports. If sales are strong, Unicharm will consider expanding domestic lines or launching local production.
Unicharm looks to boost sales to 1.4 trillion yen in 2030, which would be a 90% increase from last year's result. Overseas markets would be responsible for 70% of the turnover.
Unicharm once expanded local production and sales of mass-market products under the assumption that diaper demand jumps once a market's per capita income tops $3,000.
But Unicharm faced stiff competition in China due to the advanced technical capabilities of local rivals. The company ended up booking a hefty impairment loss in 2019.
This time, the company will introduce high value-added products that match the rising income levels of individual Asian markets. Unicharm will widen shares and reach its sales goal.
The pandemic has fueled demand for masks. The global market for a product category that includes masks tripled in 2020, according to Euromonitor. The market quintupled in Southeast Asia that year.
Throughout this surge in demand, China has been gaining dominance. Global mask exports quintupled last year to $72.6 billion, according to Japan External Trade Organization. Chinese exports multiplied by nine times that year, and its share of the global total jumped to 74% from 39%.