Kleenex-Maker Sees Need for Premium Products Tailored for Asians

This article originally appeared on Bloomberg News and The Business Times.

Asian consumers like their high-end Huggies diapers and Kleenex tissue paper, but just not exactly the way they are sold in the west.

That’s the lesson Kimberly-Clark Corp. is getting from selling the two brands, as well as other personal paper products such as sanitary pads, in the region, said Randy Jusuf, the Dallas, Texas-based company’s managing director overseeing Southeast Asia, at the Bloomberg Asean Summit in Hanoi on Thursday.

“We are very much focused on product innovation as what we have found is that we have to have the premium product, but it also has to fit into the local market,” said Jusuf. For instance, the way people change their babies’ diapers is different according to their culture and habits, and Kimberly-Clark needs to tailor-make these products accordingly, he said.

The rising middle-class in Asian developing markets such as China and Vietnam has boosted demand for better quality products such as premium beer and up-scale groceries. Kimberly-Clark, which derives about half of its sales in North America, saw 10 percent organic sales growth last year in its emerging and developing markets segment, where it plans to introduce premium versions of Huggies, Chief Executive Officer Thomas Falk said in January.

In emerging markets such as Vietnam, the company has also adopted social media and digital engagement to expand its sales to customers in hard-to-reach rural regions, Jusuf said. That has resulted in “quite a spike” on e-commerce orders as these rural-based consumers aren’t able to access the products they want otherwise, he said.

For example, Kimberly-Clark launched an online community for its Kotex brand of sanitary pads targeted at teenage Vietnamese girls, for them to connect with each other on coming-of-age issues, Jusuf said.

— With assistance by Rachel Chang, and K Oanh Ha