77.5% CAGR in Cotton Soft Towel Demand: Brands Look to Innovation and Packaging to Break Out of Price Competition

In recent years, a wave of new maternal-and-baby subcategories has captured consumer attention. While sensory innovation in mature categories is hard to achieve, emerging tracks where new technologies, materials and concepts remain untapped offer brands a better chance to leap ahead. Cotton soft towels are one such promising subcategory, drawing interest from many companies. Data from Leading Industry Research Institute shows that China's demand for cotton soft towels rose from 2.35 billion pieces in 2015 to 23.35 billion pieces in 2019, representing a compound annual growth rate (CAGR) of 77.5%—a striking growth pace.

The 2021 Cotton Soft Towel Category Insight, published by AliResearch (the report), identifies emerging white-collar workers and refined mothers as high-share consumer groups for cotton soft towels in maternal-and-baby scenarios. In terms of growth, Generation Z's spending potential deserves close attention. Since consumers are central to executing brand strategy, keeping a user-first focus and continuously upgrading cotton soft towel products has become essential for brands seeking stable growth.

Practical and functional products gain ground

For refined mothers, tissues, wet wipes and cotton soft towels are often paired with diapers. Wet wipes, with their higher cleanliness, have already built a certain market scale, but they face scenario limits—for example, they are not ideal for wiping a baby's body in low temperatures. Cotton soft towels that work both dry and wet are therefore gaining popularity among maternal-and-baby consumers. Many brands are exploring this direction by considering not only babies' comfort but also mothers' experience through materials, packaging and functional design, which helps practical, function-led products win broad consumer preference.

On practicality, pull-out packaging that simplifies baby care holds an overwhelming market advantage. The report shows that pull-out cotton soft towels account for about 70% of overall market consumption, followed by roll-type formats. Convenient and practical pull-out towels can reduce the rush and stress mothers face, saving time and effort. At the same time, material concepts such as larger, thicker and dry-wet dual-use products continue to gain traction, further supporting refined childcare.

On functionality, formulas designed for babies' sensitive skin—such as moisturizing ingredients—and antibacterial ingredients that help relieve acne-prone skin have been incorporated into cotton soft towels. Consumption of functional products has also continued to climb over the past two years.

Notably, 'second use'—which blends practicality and functionality—has become a common strategy among cotton soft towel users. Emerging white-collar workers, refined mothers and Generation Z, who are core consumer groups for cotton soft towels, make up a high share of this second-use group. Kitchen cleanup, household cleaning, baby bottle washing and shoe and bag wiping together form the main second-use scenarios.

This indicates that the practicality and functionality trend in cotton soft towels reflects not only refined mothers' preferences but also the needs of core consumer groups such as emerging white-collar workers and Generation Z.

Intense competition at low price points: how should brands plan ahead?

Looking at the brand landscape, competition in the cotton soft towel market is already intense. More than 500 brands are currently on the market. Well-known names include Purcotton, Babycare, Anmous, HUGGIES, Goodbaby, Zichu and October Crystals, among which Purcotton, Babycare and Anmous hold relatively leading positions.

Because relatively few companies in the sector have sustained R&D capabilities, many rely on contract manufacturers, leading to product homogenization. To win customers, low pricing has become widespread. Report statistics show that among online maternal-and-baby cotton soft towel orders in 2020, products priced at 5-10 yuan were the best sellers. As merchants rolled out promotions to acquire new customers, items priced below 5 yuan also showed strong growth.

As leading cotton soft towel brands, Purcotton and Babycare price their products far above the low-end tier. On Tmall, for instance, even during major volume-driving promotions, a box of cotton soft towels from either brand remains priced between 10 and 15 yuan. Ongoing product innovation and differentiation underpin revenue confidence. Financial reports from Winner Medical, Purcotton's parent company, show that in the first half of 2021 its cotton soft towel revenue reached about 409 million yuan, well above wet wipes (about 90.1984 million yuan), sanitary napkins (about 265 million yuan) and other nonwoven consumer goods.

A price war cannot last forever. For other brands, the real breakthrough lies in continuing to invest in product innovation and R&D and building a presence in the high-end cotton soft towel market.

——Source: China Packaging Network (pack.cn); original link: http://news.pack.cn/show-378296.html