Ontex Group SWOT and PESTLE Analysis

Strength

1. Smart and agile procurement helps Ontex successfully navigate through global turmoil in supply chain: In 2022, the industry faced widespread supply chain disruption due to various factors, notably the lingering impact of the COVID-19 pandemic, which manifested in unexpected ways, such as blocked ports and disrupted trade flows. Additionally, the outbreak of conflicts added to the unprecedented price fluctuations. Despite these challenges, Ontex's procurement teams responded with an agile approach to supply management and harnessed their market knowledge effectively. Collaborative efforts between cross-functional teams played a vital role in mitigating supply chain risks. The procurement team identified potential raw material supply risks and promptly communicated them to the R&D teams. In turn, the R&D teams expedited their qualification processes to avoid stockouts and ensure continuous service delivery.

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Weakness

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Opportunity

1. Consumer preference for baby pants versus diapers has proven to be a growth engine for Ontex: Ontex has experienced significant growth in the baby care category, driven by the consumer preference for baby pants over traditional diapers. The company's product has been exceptionally successful in the market, leading to an increase in market volumes. To capitalize on this growth, Ontex is expanding its product range and introducing new sizes across the entire baby care range.In 2023, Ontex witnessed a remarkable 17% increase in baby care revenue in its core markets. The retailer brand channel played a crucial role in this growth, with baby pants driving volume expansion while diapers remained relatively stable. The success of Ontex's innovation platform is evident through the market's positive response to its new baby pant platform, HappyFit. Developed in 2020 and launched in 2021, HappyFit has been instrumental in fueling Ontex's growth in the baby care category throughout 2022.

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Threat

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Political

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Economic

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Social

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Technological

1. Increasing popularity of smart diapers in the adult diaper industry: In 2022, the global smart diaper market reached a size of US$ 664 million. It is projected to witness substantial growth in the coming years, with an estimated market value of US$ 1,687 million by 2028, reflecting a notable compound annual growth rate (CAGR) of 15.8% during the period 2023-2028. Notably, the World Health Organization (WHO) data indicates that Europe alone is anticipated to have around 119 million people aged over 65 by 2025, constituting approximately 16 percent of the total European population. This demographic shift is expected to create a significant demand for Smart Diapers due to both the rising geriatric population and the need to alleviate pressure on healthcare and elderly care systems. Among the challenges faced by senior citizens, urinary incontinence stands out as one of the most prevalent and serious issues. In response to this, Ontex has introduced an innovative smart diaper solution, which includes a high-quality diaper integrated with a printed sensor, a transmitter attached to the diaper, and a mobile application. This integrated system accurately monitors the diaper's saturation level and the risk of leakage, providing timely alerts to caregivers, indicating when a diaper change is necessary. This advanced smart diaper technology aims to enhance the care and comfort of elderly individuals while supporting caregivers in their duties.

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Legal

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Environmental

1. Growth in market for biodegradable diapers due to increased demand for environment friendly products: The biodegradable baby diapers market is anticipated to reach a value of US$ 2,975.9 million in 2023 and is projected to grow to US$ 6,188.4 million by 2033. During the forecast period, sales in this market are expected to witness a compound annual growth rate (CAGR) of 7.6%, driven by increasing consumer awareness and a growing preference for eco-friendly products.Ontex's Little Big Change brand, in collaboration with its partner company gDiapers, known for their expertise in hybrid compostable diapers for 17 years, has developed an innovative diaper system. This system comprises a reusable outer diaper made from cotton and a disposable diaper pad designed to be industrially compostable. To ensure the viability of composting the diaper pads on an industrial scale, Ontex is currently conducting tests in partnership with a test group consisting of 30 families in Paris. These families have subscribed to Ontex's baby diaper service, Little Big Change. Through these tests, Ontex aims to validate the composting process and further enhance the sustainability and eco-friendliness of their biodegradable baby diapers.

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