A package of Pampers diapers is displayed at a Target store in Novato, California, on June 5, 2025.
Justin Sullivan | Getty Images
procter and gamble is selling diapers made from silk fibers in China as part of a strategy to encourage shoppers to buy them, despite weak demand for some of its products.
China is the company’s second largest market after the United States. In both markets, P&G turned to innovation rather than discounts to attract consumers looking to spend less at grocery stores. For example, last year the company introduced a new formulation for its Tide liquid detergent in the United States.
P&G faces another challenge in China: record low birth rates. The number of births fell from 6.4 in 2023 to 5.6 per 1,000 in 2025, according to government data released on Monday.
For P&G, fewer babies means the company sells fewer diapers. To boost sales in its baby care division, P&G is leaning toward luxury products.
Executives touted the success of Pampers Prestige products during Thursday’s earnings call. We added silk fibers to the inside of the diaper for skin comfort and protection.
“Chinese parents want only the best for their babies,” said P&G CEO Shailesh Jejrikar.
He added that the “reconfiguration” of the company’s super-premium diaper line has led to double-digit organic sales growth and a 3% market share increase for P&G’s baby care business in Greater China over the past 18 months. The company did not say how the price of Pampers Prestige compares to other diaper products in China.
P&G’s overall baby care division reported a single-digit decline in organic sales in the latest quarter, despite a 20% increase in organic sales in Greater China, said CFO Andre Schulten.
More broadly, the focus on innovation is paying off for P&G. Schulten said in a call with reporters Thursday that consumer sentiment in China remains negative, but P&G’s market growth rate was 3% in the latest quarter.
In the United States, P&G’s sales were weak. Organic sales in North America decreased 2% in the second quarter of the year. P&G hopes the strategy that’s working in China will soon pay off in the U.S.
The current bifurcated or “K-shaped” economy shows that wealthy Americans are still willing to flex their purchasing power even as lower-income shoppers retreat.
P&G shares rose more than 2% in Thursday morning trading after the company reported better-than-expected profits. However, P&G’s earnings were hurt by weak U.S. demand and fell short of Wall Street expectations.
