Industry overview of the toilet paper market in China

Revenue and market size in China’s toilet paper market has stable growth 

The toilet paper market in China had experienced a stable growth in the last decade. According to Statista, from 2012 to 2019, it had a stable annual growth rate of 5.5% on average. By the end of 2019, the revenue reached 15,625 million USD. In the foreseeable future, it is expected that the revenue of toilet paper industry in China will reach more than 19,000 million USD.

[Data source: Statista, ‘Revenue in China’s Toilet Paper Market (in Million USD)’]

The market size of the household paper industry in China follow the pattern of a rising trend. From 2010 to 2017, it increased steadily from 54.3 billion RMB to 107.2 billion RMB. In 2011, the YOY was the largest with the value of 22%. However, in the next 2 year, it fell significantly to 5% and increased slightly afterwards. Since then, the YOY has maintained at around 10%. Since the market size of the household paper industry in China has been rising, it is believed that the toilet paper industry in China will follow a similar pattern.

[Data source: qianzhan, ‘Market Size of Household Paper Industry in China’]

China’s paper consumption and production: steady increase of consumption and production

In 2012, China’s paper consumption was still fairly low as per capita paper consumption was only one-tenth of the United States’ per capita consumption levels. According to statistics, from 1990 to 2003, China’s consumption of toilet paper increased at an average annual rate of 11%. Paper, includes two categories, paper packaging and health paper. The health paper industry breaks down into the kitchen paper, toilet paper, paper napkin, tissues, women’s sanitary napkins, and baby products such as Niaodian.

China’s toilet paper consumption

Chinese consumption of toilet paper in 1990 was 680,000 tons, and it increased to 3,100,000 tons in 2003. In 2003, China’s production of toilet paper was 2,370,000 tons, representing 9.7% growth in 2002. Its production and consumption correlates with GDP growth. This indicates that China’s consumption of toilet paper is dependent on the level of economic development and ability to improve the quality of life. By 2020, the United States, Europe, and Chinese represented the three pillars of power in the paper industry. The toilet paper industry in China still has much room for development. As urbanization spreads and average incomes increase, and public restrooms start to supply toilet paper,  China’s toilet paper industry will see a boom in production.

From 2006 to 2018,  China’s consumption of household paper had gradual increase, rising from 4.36 million tons to 9.01 million tons. China’s production of household paper has been larger than the consumption volume in China, which indicates it is largely exported. Nevertheless, with the changing pattern of paper industry in China, since 2014, the gap of supply and demand in this industry has been shrinking. 

[Data source: qianzhan, ‘Production Volume and Consumption Volume in China’s Household Paper Market (in Million Tons)’]

Per capita consumption of toilet paper is on the rise

In 2012, the world’s per capita consumption of toilet paper was 3.4 kg per year. This figure was 22 kg for North America, 12 kg for Western Europe, 13 kg for Japan, and only 2.4 kg for China. In China, consumption of toilet paper varies in different parts of the country. Shanghai, Beijing and other large cities and developed coastal areas account for about 60% of the total toilet paper consumption in China. In lesser developed areas such as Gansu, Ningxia, Guizhou, and other areas in the western region, more than 70% of the population now uses toilet paper. However, much of the rural population still does not use toilet paper. Much of China is still developing, so a low per capita consumption of toilet paper is nothing unusual. However, the toilet paper industry’s prospects look good as more and more consumers in China raise their standards of living.

The figure has revealed that the rising trend of consuming more household paper in China. From 2007 onwards, the consumption volume of paper has increased from 2.7 kg/capita to 5.7 kg/capita in 2016.

[Data source: chyxx, ‘China’s per Capita Consumption of Household Paper’]

Nevertheless, the figure in China is still pale in comparison with those in other nations and regions. In 2017, the consumption of household paper in East Asian societies such as Taiwan, Japan, Hong Kong and Korea was 16 kg/capita on average whereas that in western society such as United States and Sweden was 23kg/capita.

[Data source: qianzhan, ‘2017: Per Capita Consumption of Household Paper in Different Countries or Regions (in KG/Capita)’]

Distribution channels of toilet paper market in China: offline is still the standard

In general, according to Statista, the overwhelming majority of toilet paper are sold via offline stores, accounting for 96% or 97%. From 2010 to 2018, toilet paper consumers in China were most likely to purchase in standard stores and convenient stores, followed by hypermarkets and online stores.

[Data source: qianzhan, ‘Distribution Channels in China’s Toilet Paper Market’]

Price of toilet paper in China: stable increase

The price of toilet paper in China has a stable rise. In 2003, the figure was 11,600 RMB/ton. In 2017, it increased to 16,400 RMB/ton. The change in price is subject to the fluctuation in upstream industries.

[Data source: chyxx, ‘Price of Toilet Paper in China (in RMB/Ton)’]

Potential business opportunity of toilet paper market in China: inspired by shared economy

Toilet paper is a daily necessity in Chinese people’s daily lives. However, research shows that 80% of the public toilet in China does not provide toilet paper. Chinese people might face a situation of lacking toilet paper when they go out. By tackling such a problem, this has provided a business opportunity.

Like other parts of the shared economy in China, shared toilet paper vendor machine can be the potential business in the future. Compared to other shared items such as shared vehicles and bicycles, the size of shared toilet paper vendor machine is smaller, which may lead to higher frequent uses.

Many cities in China are the ideal business locations for the shared toilet paper vendor machine due to the large number of shopping centers. Moreover, the QR payment method also facilitates the emerging of business.

The Coronavirus outbreak in China has affected the performance of toilet paper in China

The Coronavirus economic impact shows itself in many ways. During the Coronavirus outbreak in China, rumours were rife that to address the crisis faced by the People’s Republic of China, toilet paper factories were about to be requisitioned in order to increase the surgical mask production. Indeed, social media have massively shared this information thus making people believe that a shortage of toilet paper was soon to occur. Accordingly, this rumour added to others has led to a situation where supermarkets have been emptied of their toilet paper stock. As reported by Bloomberg, information relating to these issues (i.e. upcoming scarcity of toilet paper) has soon been denied by the authorities blaming the circulation of erroneous news on social media platforms.  So as for now, officially, there have been no toilet paper factories requisitioned in China. So, this is another fact to add to the long list of fake news that has circulated during the ongoing coronavirus episode.

Toilet paper was a panic purchase during the Coronavirus outbreak

The 2020 shortage of toilet paper seems to be the consequence of a combination of numerous factors. First, the general worldwide panic has made people stock up on essential items and has thus suddenly boosted the demand for toilet rolls. Moreover, the Chinese New Year holidays followed by the coronavirus outbreak in China in production have greatly impacted the provisions. In fact, as announced by one of the biggest Chinese producers of toilet paper, due to the logistic workforce being on leave, the supply of toilet paper to supermarkets has diminished but should normalise soon.

Also, the various rumors spread on social media have persuaded part of the population to prepare for an upcoming shortage thus driving the demand over the trend. Nevertheless, while the shortage of toilet paper has hit Hong Kong, it seems that Mainland China has not suffered. All in all, one can observe that the combination of these diverse factors has impacted the toilet paper market, but the situation should clear in the near future.

Brand analysis of toilet paper market in China

Key players in China’s toilet paper market: low CR4

The toilet paper market in China is highly competitive with low market concentration. The top-52 domestic enterprises only make 40.44% of the total production. The key players in China’s toilet paper market are Hengan International, Vinda, C&S and Dongshun, which accounted for ¼ of the market share in China’s toilet paper market.

[Data source: qianzhan, ‘Market Share of Key Players in China’s Toilet Paper Market (2018)’]

Hengan: the market leader in China’s toilet paper market

Hengan International Group Company Limited is the largest producer of sanitary napkins and baby diapers in China. Located in Fujian. It produces sanitary napkin products, disposable baby diapers, adult diapers and other personal hygiene products. The company was founded in 1985 and was first listed on the Hong Kong Stock Exchange in 1998. Xin Xiang Yin is the household paper brand that is affiliated to Hengan.

Currently, in 2020, the Cha Yu Si Xiang series and the Cha Yu Jing Dian series are mostly promoted. The Cha Yu Si Xiang series is the premium product that features latest technology on the quality of the toilet paper that is, improving softness and durability. Moreover, the outer package of this series is in green that features the simplicity and health. The company claims that this product is the benchmark. The Cha Yu Jing Dian series is similar to the Cha Yu Si Xiang series while has the feature of aromatic tea scent. The target customers are mid-to-high people in China.

As for the products listed on online stores, according to Tmall, 36 types of toilet paper, in different size and bundles, are being sold on the platform. Most of the promoting products are The Cha Yu series.

[Photo source: Hengan, ‘Cha Yu Si Xiang series’]

Vinda: Premium option

Vinda International Holdings Limited is the largest household paper manufacturer in China, distributor and marketer in China. Its tissue paper products with brand name “Vinda” has been recognized as one of China’s most famous brands. It is headquartered in Xinhui, Guangdong.

Vinda has dedicated to develop innovated products meanwhile maintaining the quality and price level of their products. There are 3 common types of toilet paper that Vinda mainly promote. The Deluxe series (Li Ti Mei) is the latest product which applies the novel embossing technology, 4D-DECO™. The Classic Blue series is the durable and classic product of Vinda. The Zhi You Fen Liang (sufficient amount) series features the large volume of each package of toilet paper.

Tmall lists 28 types of toilet paper, in different size and bundles, on their platform.

[Photo source: Vinda, ‘Deluxe series’]

C&S Paper: featuring product diversification  

C&S Paper Co., Ltd is a company that engages in producing, processing and selling household paper. Roll paper and non-roll paper are the main products of the company. C&S and Sun are the affiliated brands. The head quarter is in Zhongshan, Guangdong.

The company has developed diverse types of toilet paper that suit people’s needs under different circumstances. The Face series in black, the Face series in pink, the Natural Wood series, the Jin Zun (Gold & Premium) series and the commercial series that mainly target hotel operators.  

The Face series in black and pink feature the function of water wettability. The Natural Wood series and the Jin Zun (Gold & Premium) series feature the quality and material of the product.

As for the products listed on online stores, according to Tmall, 60 types of toilet paper, in different size and bundles, are sold on the platform. Most of the promoting products are The Face series in black and pink.

[Photo source: C&S Paper, ‘Natural Wood series’]

Author: Amelia Han

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