The baby product market faces two distinct pressures. On one side, households are becoming more selective about how they spend on baby needs. On the other, declining birth rates may narrow the base of new consumers. Both can affect category growth, but through different mechanisms and over different time horizons.
Sales data provide the first clues. According to Euromonitor International, retail volume sales of diapers in Indonesia fell 5% in 2025 to 7.929 billion units. Sales value fell more sharply, by 8%, to Rp24.968 trillion. Meanwhile, Worldpanel by Numerator recorded that in the first half of 2025, spending value in the baby category grew 3%, but the number of units purchased fell 4% compared with the same period the previous year.
This difference raises a more important question than simply whether the market is weakening: are consumers buying less because their purchasing power is under strain, or is the market losing potential buyers because the number of births is declining?
Public data do not yet allow us to calculate the contribution of each factor directly. However, several indicators can help distinguish short-term pressure on spending behavior from structural change in the consumer base.
Sales Are Falling, but What Has Actually Changed?
In Worldpanel’s research, the baby category covers diapers, wet wipes, soap, shampoo, powder, body care products, infant formula, growing-up milk, biscuits, and baby cereal. The panel tracks purchases for at-home consumption among around 68 million households in urban and rural areas.
In the first half of 2025, purchase volume in the baby category fell 4%. The decline was steeper than that of overall FMCG volume, which fell 2% in the same period. Shopping frequency for total FMCG was unchanged, even though the number of units purchased decreased. Public data do not yet reveal whether shopping frequency in the baby category followed a similar trend.
The picture in the diaper category is clearer. Throughout 2025, retail sales volume fell 5% while sales value fell 8%. Based on IDN Research Institute’s calculation from these changes in value and volume, average sales value per unit fell by roughly 3%. This figure is a calculated result, not an average price reported directly by Euromonitor. Changes in brand mix, pack size, sales channel, and promotions may also influence it.
The two sources measure different things: Worldpanel records household purchases in the broader baby category during the first half of 2025, while Euromonitor estimates retail diaper sales for the full year. The figures cannot be compared directly. Even so, both show that reading the market from spending value alone can obscure changes in the quantity of goods purchased and in the composition of the products chosen.
Spending Pressure Offers Short-Term Clues
Several indicators compiled by Worldpanel depict household budgets with increasingly limited room. The Consumer Confidence Index fell from 125 in May 2024 to 117 in May 2025. Average household spending was recorded at Rp6.6 million in the second quarter of 2025, down 0.2% from a year earlier. In the same period, the share of income going to savings fell from 6% to 4%.
These conditions occurred while inflation in May 2025 was recorded at 1.6%. This means that household spending pressure cannot be read from general inflation alone. Budget headroom, confidence in economic conditions, and the ability to sustain spending must also be taken into account.
Euromonitor identifies price as the main factor in diaper purchasing decisions amid pressure on household income. On the company side, PT Uni-Charm Indonesia Tbk (UCID), the maker of products such as MamyPoko, reported that its 2025 net sales fell 17% to Rp7.98 trillion. The company attributed its performance to weak purchasing power and intense diaper competition that pushed consumers toward cheaper products, as reported by IDX Channel.
The UCID figures must be read within their scope. The company’s revenue includes categories other than baby diapers, so the decline in revenue cannot be used as a direct measure of contraction in the diaper market. Nevertheless, household indicators, category reports, and company statements together give reason to examine changes in spending behavior further.
Births Are Declining, but the Impact Does Not Occur Overnight
Demographic change must also be taken into account. The 2025 Intercensal Population Survey (SUPAS) by Statistics Indonesia (BPS) recorded Indonesia’s total fertility rate (TFR) at 2.13 children per woman, down from 2.18 in the 2020 Population Census Long Form. BPS also recorded a crude birth rate of 16.18 births per 1,000 population in 2025.
TFR describes the average number of children a woman will bear over her reproductive years, based on fertility patterns during the measurement period. The crude birth rate, meanwhile, measures the number of births relative to the total population. Both provide demographic context, but neither directly shows how many babies are product consumers in a given year.
Declining fertility could shrink the number of new potential consumers over the long term. However, its effect on annual sales is also shaped by the number of babies already born, children’s ages, product usage patterns, and category penetration. For this reason, a change in TFR cannot be translated directly into a percentage decline in diaper sales.
This is where the difference in timing matters. Changes in spending behavior can show up in transactions as soon as households begin to reduce the units they buy or choose cheaper options. Demographic change works through the number of births and the formation of a new consumer base over time.
The available data are not sufficient to calculate how much the decline in births contributed to the weakening of the baby product market in 2025. For that reason, declining fertility is better read as a structural pressure to be anticipated, not as a sole explanation for a one-year contraction in sales.
Consumers Shift to Cheaper Options
Several Worldpanel findings indicate that downtrading—the shift of consumers to lower-priced products—is occurring in the baby category. The pattern appeared in the second-quarter, third-quarter, and full-year 2025 reports. In its thematic report From Cradle to Cart, Worldpanel also describes a situation in which consumption of baby care products increases but spending stagnates.
This finding indicates that the number of products used and the amount of money spent do not always move in the same direction. One possible explanation is a shift toward options with lower value per unit. However, this pattern of baby care consumption should not be treated as identical to the 4% decline in baby category volume, because the scope and measurement period differ.
Changes in product offerings provide further context. Euromonitor highlights MamyPoko’s single-unit packs, Baby Happy’s affordable pricing strategy, and the role of small packs and promotions in sales channels. UCID also introduced Fitti, a lower-priced brand. These moves show that price choices have become part of the market’s response, although they do not in themselves prove why each consumer switched products.
Interestingly, price is not the factor mothers most often cite as determining loyalty in Snapcart’s survey of 721 mothers. Fifty percent of respondents named product quality and results as the main factor, 32% named suitability without allergies, and 18% named affordability. The same survey found that 28% of mothers are willing to switch to a similar brand if their favorite product is unavailable.
The survey findings and the transaction data measure different things. The survey describes the factors consumers consider important, while transaction data record the purchasing choices actually made. Consumers may continue to prioritize quality yet look for lower-priced alternatives as long as the product still meets their needs. This is a possibility consistent with the downtrading findings, although it does not prove the motive behind each purchase.
Brand Competition: Is the Market Shrinking or Is Share Shifting?
Beyond spending pressure and demographic change, competitive dynamics must be considered when reading the performance of individual companies. According to Euromonitor, Uni-Charm Indonesia and Softex Indonesia together held 75% of diaper retail value sales in 2025. Uni-Charm’s retail value share fell from 44% in 2020 to 39% in 2025, while Softex’s share rose from 35% to 36%.
At the brand level, Uni-Charm Indonesia markets MamyPoko and Fitti, while Softex Indonesia competes through Sweety and Baby Happy. Naming these brands matters because changes in company performance do not always reflect changes in overall category demand. A company can lose share when competitors grow, even when the market is not shrinking by the same magnitude.
However, these market share data also do not prove that consumers switching from one brand to another was the main cause of the diaper market’s contraction in 2025. Market share is a relative measure: one player’s gain can occur alongside another player’s loss, while the total market may either grow or shrink.
For that reason, three things need to be kept separate: the decline in market volume, the shift of consumers to lower price segments, and changes in brands’ competitive positions. All three can occur at the same time, but each requires different evidence to determine its contribution.
What Do Brands Need to Diagnose?
Public data offer clues about purchasing power pressure, the shift to cheaper options, and declining fertility. To determine a business response, however, brands need to separate the three mechanisms that can produce a sales decline.
First, declining penetration. Fewer households buy products in the category. If this is occurring, brands need to evaluate the size of their buyer base and how they reach families who are newly entering the stage of needing baby products.
Second, declining purchase intensity. Households still buy, but the frequency or number of units purchased has decreased. If this mechanism is confirmed, usage patterns, pack sizes, and promotional rhythm need to be evaluated based on actual purchasing behavior.
Third, declining value per unit or shifting brand share. Consumers may choose packs, channels, or brands with lower transaction values. At the same time, brand share may move among players. Brands need to review their price architecture, value proposition, pack choices, and the impact on margins—without assuming that lowering prices is always the solution.
To distinguish among the three, brands need to monitor penetration, purchase frequency, volume per buyer, value per unit, and brand share by price segment. The available public data do not yet provide all of these indicators in detail for the baby category.
So, Is It Declining Purchasing Power or Fewer Births?
The available evidence more directly points to short-term changes in spending behavior: baby category volume fell in the first half of 2025, the diaper market lost both volume and value over the year, and Worldpanel repeatedly recorded downtrading. Household economic indicators provide context consistent with budget pressure.
Meanwhile, declining fertility is a structural signal relevant to market growth over the long term. However, TFR and crude birth rate data are not yet sufficient to calculate its contribution to the decline in diaper sales in 2025.
Accordingly, the available data cannot yet determine which factor contributed most in quantitative terms. However, the two need not be treated as mutually exclusive explanations. Spending pressure can change how families buy products today, while declining births may affect the number of new potential buyers in the future.
For brands, the strategic question is not simply whether the market is weakening. What matters more is knowing whether growth is being held back because the buyer base is shrinking, buyers are reducing the quantity they purchase, or consumers are shifting their spending to options with lower value per unit. That diagnosis determines whether the response should focus on buyer acquisition, retention, price architecture, or margin protection.
References
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