When competing global baby product companies made inroads into Korea, Yuhan-Kimberly outsmarted them with the so-called “glocalized” business strategy, whereby it adapted its international products around the peculiarities of the local culture.

“Korean consumers are very picky and fussy about products. By meeting their requirements and feedback, we were able to produce high-quality diapers which now satisfy consumers from other countries,” Yuhan-Kimberly president and CEO Choe Kyoo-bok said in an interview with The Korea Herald this week. 



Yuhan-Kimberly, which manufactures tissues, diapers and feminine hygiene products, has dominated the diaper market with its flagship brand Huggies for decades since it was launched in 1983 over competitors like global giant Procter & Gamble.

“If global conglomerates have the same products and marketing strategies in various markets, their business will get into trouble,” he said.

The 70-30 joint venture between Kimberly-Clark and Korean pharma company Yuhan researched deep for localization offering to better meet the requirements of Korean consumers and adapt to their lifestyle while keeping Kimberly-Clark’s brand Huggies.

“Through our research, we found that Korean mothers prefer diapers that give comfort to their babies rather than the liquid protection function that other brands set as a selling point,” he said.

Yuhan-Kimberly’s main sanitary pad brand White is another example that shows the company’s different marketing approach by targeting younger women with its cleanliness brand image. The firm, which struggled to compete with P&G’s signature pad brand Whisper until 1995, regained the No. 1 position in the feminine hygiene product market with White.

“Huggies diapers and White pads were recognized by Kimberly-Clark as successful cases and they were applied to the global platforms,” he said.

“When I started working for this company in 1983, we learned a lot from Kimberly-Clark about fundamental R&D and marketing strategies it has developed over a long period. Now we share and cooperate in multiple areas such as product development and production,” the 59-year-old CEO said.

Demographic changes hit diaper sales

Despite its over 70 percent domestic market share, the sales of diapers dropped 20 percent in 2014 compared to the previous year due to a steep decline in the birthrate and sluggish Korean market.

To offset lackluster performance in Korea, it turned its eyes to the overseas market from the early 2000s.

“When regular diapers were all over China, Yuhan-Kimberly captured the market with premium products,” he said.

Last year, the company’s export sales accounted for 16.7 percent of its total revenues ― 1.4 trillion won. Over 50 percent of exports went to Asian countries including China.

“Approximately 18 million babies are born a year in China whereas there are 430,000 births in Korea. It sure shows a robust growth trend and offers huge potential for us,” he said.

Unlike other brands that introduce cheaper products when they first enter emerging markets, Yuhan-Kimberly rolled out top-range products in major cities with high living standards including Beijing, Shanghai, Guangzhou and Qingdao.

“Chinese consumers’ preference for ‘Made in Korea’ products also helped our business there,” Choe said.

Its export market goes beyond Asia. The company sold its goods in over 30 countries last year including the U.K. and Italy with diaper lines. “The next target for a new market would be India,” he added.

Seeking growth in senior care industry

While diapers are the firm’s main source of revenue, accounting for more than 35 percent, the CEO said senior care products will lead the firm’s future growth.

“The drop in Korea’s baby population and the aging society led to a downturn in some markets, but the aging population could become a huge opportunity. The senior care sector will be our new growth engine,” the CEO said.

Yuhan-Kimberly introduced Depend Style Underwear, an adult diaper for people with urinary or fecal incontinence, in 2012 in Korea. The product’s sales surged 46 percent during the first five months this year from a year earlier.

“According to our research, some 8 percent of people aged between 55 and 80 suffer from incontinence in Korea. But many Korean seniors feel shy to talk about it,” he said.

To fight with the perception, the company branded it as a style underwear rather than adult diaper, putting emphasis on its thin design that offers comfort yet is invisible with any outfit.

“It is produced for active seniors to live their lives to the fullest like going to the movies, hiking and driving without worries about leaks,” Choe said.

The firm started to make a foray into a handful of European markets through its largest shareholder Kimberly-Clark’s sales network.

The U.K. and the Netherlands, which have a combined 240 billion won adult diaper market, are the first two European countries it entered this year.

‘We are still learning’

In a bid to expand its business portfolio, Yuhan-Kimberly introduced child skin care brand Green Finger in 2007, which was received well here based on consumer trust in the firm’s other infant brands.

“In hypermarkets, Green Finger beat Johnson & Johnson, which enjoyed unprecedented popularity in Korea. That’s one of the biggest pride and joys,” he said.

It sought to replicate its success in the teen skin care market but faced barriers with local cosmetic giants AmorePacific and LG Household & Health Care.

“We still would like to know more about the beauty market. That’s why we decided to build a strategic partnership with Unilever to learn know-how in the segment,” Choe said.

Last year, the Korean firm set up a home and beauty care headquarters to execute the marketing business of multinational giant Unilever, under a deal between the two firms.

It also invested some 80 billion won to build a factory, which enables to increase the annual production capacity of hand towels and tissues to 150,000 tons, in Gimcheon, North Gyeongsang Province.

Choe said that to some, Yuhan-Kimberly may seem to effortlessly enjoy the top position in major products, but persistent efforts for research and development led to the growth, adding Huggies went through product renovation over 20 times.

“We face new challenges every year and try to find solutions to maintain our position,” he said.

By Park Han-na (hnpark@heraldcorp.com)