Attitudes towards the usage of condoms are changing fast in China, says business analyst Shaun Rein to CNBC. While condoms have always been available, their quality was often doubtful. That opens opportunities for high-end condoms with a good – read: international – reputation.
“Volumes are not expanding but there is massive upgrading,” in search of higher quality and a superior feel, said Shaun Rein of China Market Research Group, a consultancy. “This is where the foreign brands definitely have the advantage. Consumers are moving up the value chain.”
Chinese tourists to Japan have been returning home with bundles of condoms and Japanese manufacturers have been ramping up exports to China in recent years following a series of safety scandals that have reduced trust in local brands such as Donless, Double Butterfly and Gobon.
Last year Shanghai police said they seized 3m locally made condoms manufactured from inferior and in some cases foul-smelling materials, following a 2013 bust of 5m fakes. Counterfeit Chinese condoms have been found as far afield as Ghana and Puerto Rico in recent years.
Jissbon is a mid-level brand in China, appealing to lower-income workers and students who are wary of local products, said Mr Rein. “It’s above the Chinese brands,” he added.
China’s young people are having sex earlier, state media reported last year, with the average age of the youngest generation’s first sexual experience occurring at 17.
Ansell said on Thursday it would buy back up to 10 per cent of the company’s shares following the sale of the condom business and is seeking acquisition opportunities as it refocuses its business on its medical and industrials division.
Based on Wednesday’s closing share price, this implies a buy back worth US$265m. “Ansell will now turn its focus to the acceleration of the three business-to-business divisions while improving operating efficiencies further,” said Magnus Nicolin, the company’s chief executive.
The transaction was concluded at a multiple of 16 times 2016 full-year earnings. It is subject to regulatory approval and is expected to be complete by the end of September 2017.
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