Fewer Babies, Higher Sales: P&G's Contrarian Bet in China Is Working

• With commencement rates tumbling successful China, the babe attraction marketplace is an improbable root of maturation for Procter & Gamble.

• The institution has moved upmarket with premium products, a strategy that's moving wonders.

• This occurrence offers a blueprint for the company's different businesses arsenic it looks to reinvent itself.

• 10 stocks we similar amended than Procter & Gamble ›

China's commencement complaint was 5.6 births per 1,000 radical successful 2025, down astir 13% from 2023. With conscionable 7.9 cardinal babies calved past year, China's fertility situation is lone getting worse. For comparison, the U.S. commencement complaint was 10.7 babies per 1,000 radical successful 2023.

For user goods elephantine Procter & Gamble (NYSE: PG), the Chinese babe attraction marketplace doesn't look to beryllium a large maturation accidental astatine archetypal glance. However, the institution has recovered a mode to turn its China babe attraction concern by a double-digit percent implicit the past 18 months portion expanding its marketplace contempt a collapsing commencement rate. The secret? Premium products that mesh with thousands of years of Chinese culture.

According to Procter & Gamble CEO Shailesh Jejurikar during the net telephone connected Thursday, "Chinese parents privation lone the champion for their baby. Softness and comfortableness successful summation to dryness."

Procter & Gamble turned to silk, a worldly with a luxurious estimation and a multi-thousand-year past arsenic a presumption symbol, to trade its Pampers Prestige enactment of premium diapers. The institution claims that Pampers Prestige is the lone starring marque that uses existent silky ingredients.

Premium disposable diapers relationship for 35% of the Chinese diaper market, according to Alibaba, and income are increasing astatine astir quadruple the complaint of modular disposable diapers. The wide Chinese diaper marketplace is expected to turn by 5.7% annually done 2032, but the premium conception is astir definite to turn faster. Alibaba besides recovered that Chinese parents are mostly consenting to wage 15% to 20% much for diapers that diagnostic hypoallergenic materials.

Instead of going aft volume, Pampers Prestige is an illustration of Procter & Gamble shifting gears to prosecute the champion maturation accidental successful an different sluggish market. Jejurikar pointed to Pampers Prestige arsenic a template for however the institution is leaning into innovation to boost sales.

Jejurikar said that Procter & Gamble is opening a semipermanent reinvention, with innovation acceptable to play a starring role. The institution volition usage productivity gains to money innovation and request creation, portion doing its champion to mitigate outgo headwinds from tariffs and inflation. Procter & Gamble volition besides leverage its trove of user information to thrust the concern successful the close direction.