Richa Naidoo and Casey Hall
LONDON/SHANGHAI (Reuters) – Reckitt, the owner of Durex, hopes Chinese consumers’ penchant for live shopping will extend to condom purchases, but the company will have to walk a “fine line” as it seeks to expand its market share. The condom market is worth more than $5 billion.
The buzz around live streaming, a major driver of the e-commerce boom that has gripped China since the start of the COVID-19 pandemic, could help the UK consumer goods group in its bid to drive growth in the world’s second-largest consumer goods market. – largest economy.
In 2022, live streaming sales in China totaled $238 billion. Research firm eMarketer estimates that this amount will grow to more than $300 billion by 2025.
Reckitt has already had success selling household products in China, but condoms may prove harder to sell as Chinese regulators closely monitor sex-related content online without always clearly spelling out exactly what crosses the line.
“There is no clear definition of what vulgar content is — that’s up to the regulator to decide, and the system is quite socially conservative,” said Kendra Schaefer, head of technology policy at China-focused research firm Trivium.
“So how can we talk about sexual health without talking about the vulgar issue? It’s a delicate line.”
However, the growth potential for Reckitt is compelling given the multi-billion dollar condom market. The China Business Research Institute predicts condom sales in China will reach $5.2 billion in 2024, with market leader Durex having a 40% market share as of 2020, according to Daxue Consulting.
On Wednesday, Reckitt reported a 1.2% year-on-year decline in fourth-quarter net sales and a 7% fall in overall net sales to 3.56 billion pounds ($4.51 billion). The company does not disclose sales data in China.
Arjun Purkayastha, who heads Reckitt’s Greater China business, said live streaming is an important growth driver for the company, accounting for a “near double-digit” share of sales in the country for Reckitt products, including Dettol sprays and Strepsils throat lozenges.
“People are not yet used to seeing condoms on live broadcasts,” Purkayastha said. Over the summer, Reckitt began streaming “featured” Durex products on Douyin, the local version of TikTok, with an eye toward expanding in the future.
“Intimate health usually takes a while to gain acceptance because sometimes there are fears about complaints or other things… Initially, with Durex, most of the platforms were like, ‘Hey, wait,’ but I think they’re opening up a lot more now . ” he added.
“COOL” MARKETING
Purkayastha said Reckitt’s live-streaming channels in China differ from the Instagram model common in the West, which features paid influencers who have used the products themselves and recommend them personally. Instead, employees at studios or other locations such as factories describe the product’s origins, share information, and offer it to customers.
“It’s just a matter of time before we learn to do it with style without offending anyone” in China, Purkayastha added.
The shift in China’s media consumption habits toward live broadcasts and short videos makes them a vital channel, even for condom sales, says Yalin Jiang, founder of research and strategy consultancy ApertureChina.
“It’s easy for the Chinese to get bored of a brand. I think Durex understands this… It’s good to see them trying something new,” she said.
If there’s anyone who can make live condom sales work, it might be Durex, which has a long history in the Chinese market marked by smart marketing campaigns and relatively few mistakes, according to Daxue’s Suheng Wu.
This is largely due to the fact that they have skillfully navigated the boundaries of China’s socially conservative media landscape, while attracting millions of followers on social media platforms such as Weibo (NASDAQ:) and Douyin.
Its campaigns, such as last year’s Durex Chinese New Year mahjong gift set, which replaced traditional tile names with clever alternatives peppered with innuendo, or Durex’s version of Tetris on super-app WeChat, often go viral.
But visceral discomfort with sexual content will remain a problem in some contexts, says Wu, 24.
“If I was watching Douyin and there was a live broadcast about condoms, I would be curious to see what it said,” he added. “But if I was in the room with my parents, I would have swiped it so quickly!”
Live streaming in China has helped boost spending in part because it often offers deep discounts and low prices, but a growing number of brands, including Reckitt, now say they are switching to smaller discounts.
“There are many reasons to be optimistic,” Purkayastha said of the Chinese market. “This talk of a deflationary environment and all these things we don’t really identify with – I think that’s the big news in the headlines. But the reality on the ground is that it’s pretty much business as usual.”
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