Erosion risks

• Aggressive discounting and promotion by global peers
• Private-label share gains in value tiers
• Reputation damage from quality incidents

Leading indicators

• Market share trend in Japan/SEA baby diapers
• Price/mix vs input costs (pulp, SAP)
• Brand preference and satisfaction survey results

Counterarguments

• Switching costs are low; parents can trial competing brands via promotions or online subscriptions.
• Product performance gaps can narrow quickly as competitors copy features.

Erosion risks

• Shift to e-commerce reduces advantage of physical shelf presence
• Retailer consolidation increases buyer power
• Channel conflict and margin pressure from marketplaces

Leading indicators

• Numeric distribution (stores carrying products) where disclosed
• E-commerce share of category sales
• Trade spend as a % of sales

Counterarguments

• Online channels and direct-to-consumer models can weaken traditional distribution moats.

Erosion risks

• Competitors catch up in materials science and process engineering
• Technology diffusion via equipment suppliers/contract manufacturers

Leading indicators

• New product launch cadence
• Manufacturing yield and cost trends
• Patent filings / IP enforcement activity

Counterarguments

• Many core materials are sourced from common suppliers; process know-how may not translate into durable cost advantage in commoditized SKUs.

Erosion risks

• Rise of lower-priced competitors and private label
• Shift to alternative formats (e.g., menstrual cups) in some demographics
• Reputation risk from safety/quality incidents

Leading indicators

• Market share and price/mix trends in core markets
• Consumer review/ratings trend on e-commerce platforms
• Repeat purchase / subscription retention where applicable

Counterarguments

• Switching costs are low and trial is easy; loyalty can be disrupted by promotions or influencer-driven challengers.

Erosion risks

• Innovation by competitors changes perceived best product
• Channel shift to online increases price transparency

Leading indicators

• Share of premium SKUs within category
• Churn/retention in brand-owned digital services (if disclosed)

Counterarguments

• Habit can break when consumers trade down during macro stress or switch to subscriptions/private label online.

Erosion risks

• Retailer shelf resets and consolidation
• Marketplace algorithms favor lowest price

Leading indicators

• Numeric distribution / share of shelf in key retailers (if disclosed)
• E-commerce gross merchandise value share in core markets

Counterarguments

• Digital-first brands can gain reach quickly without traditional distribution advantages.

Erosion risks

• Competitor product performance catches up
• Negative publicity from product failures
• Increased adoption of lower-cost alternatives

Leading indicators

• Market share trend in Japan adult incontinence
• Mix shift toward premium SKUs
• Customer satisfaction and leakage complaint rates

Counterarguments

• End-user switching cost is low; buyers may trade down or try alternatives based on price or promotions.

Erosion risks

• Facilities standardize on lowest-cost suppliers
• Staff turnover reduces embedded routines

Leading indicators

• Expansion of care model programs/partnerships where disclosed
• Institutional channel sales mix

Counterarguments

• Care models can be replicated by competitors or by facilities independently, limiting switching-cost durability.

Erosion risks

• Patent expiration or design-around by competitors
• Benefits not valued enough to sustain premium pricing

Leading indicators

• Patent portfolio size and litigation/enforcement (if any)
• Share of sales from new products with protected features

Counterarguments

• Hygiene product patents often have limited blocking power; competitors can offer comparable performance with different designs.

Erosion risks

• Brand switching driven by veterinary recommendations or ingredient trends
• Low-cost competitors and private label expansion

Leading indicators

• Market share in Japan pet care
• Repeat purchase metrics in e-commerce (if disclosed)
• Premium product mix

Counterarguments

• Pet food/toiletry categories have many credible alternatives; loyalty can shift quickly with new health trends or promotions.

Erosion risks

• Input cost inflation (proteins, packaging)
• Competitors match quality features

Leading indicators

• New product launches and functional claims
• Manufacturing efficiency and capacity expansions

Counterarguments

• Scale advantages in pet food are often held by larger global incumbents; Unicharm may face cost disadvantages outside Japan.

Erosion risks

• Marketplace competition reduces differentiation
• Partner execution risk in overseas channels

Leading indicators

• E-commerce sales growth in China/SEA (if disclosed)
• Share gains in priority cities

Counterarguments

• Distribution advantages via partners can be temporary and non-exclusive.

Erosion risks

• Stronger scale players undercut on price
• Technology transfer via equipment vendors

Leading indicators

• Share of sales from industrial materials
• Customer concentration and contract renewals

Counterarguments

• Industrial materials markets often reward scale and procurement power more than niche process know-how.