Trian Partners Activist Presentation Deck
China Diapers Case Study
P&G has lost significant share behind one of its largest
brands (Pampers) in P&G's second largest market (China).
China is also the world's largest diaper market and has
been growing at a double-digit CAGR over 5 years
▪ P&G was an early entrant in China diapers decades ago, as
Pampers built leading share with a value-orientation
- P&G failed to respond to Chinese consumers trading up to
imported premium products over the years. P&G also failed
to respond to cultural shifts in shopping channels from
mass-market hyper and super-stores to e-commerce and
upscale specialty stores
▪ As a result, the Company has lost ~650 bps of market share
while competitors like Kimberly-Clark and Kao have been
gaining market share
▪ Share loss was NOT driven by lack of resources, as P&G
has long operated with the following organizations in China
and Asia:
Global Baby Care category team
Regional Baby Care category team in Asia Pacific
Country Baby Care category team in China
Regional SMO in Asia Pacific
A specific SMO just for China
Strategic mistakes of this magnitude suggest multiple
breakdowns across the entire organizational design,
I including consumer research, product development,
pricing, sales, distribution - and lack of coordination
between all of the above
Source: Euromonitor International Limited 2017 ⒸO. Wall Street research, investor call transcripts.
100
90
80
70
60
50
40
30
20
10
0
May-16
Premium Diapers as % of Total Sales
32%
Jul-16
2011
Pampers
(P&G)
Kao
25%
Sep-16
2016
Unicharm
Nov-16
P&G Has Lost Massive Share in a
Critical Growth Market
China diapers is a $7.4bn market growing at a double-digit
CAGR since 2011. While competitors such as Kimberly-Clark
and Kao have grown share, P&G has lost significant share
8%
HUGGIES
(Kimberly-
Clark)
Jan-17
2011
Daio
13%
K-C
2016
Mar-17
4%
P&G
May-17
Merries
Loft
2011
No.1 Brand in
(Kao)
12%
2016
-
42-View entire presentation