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I can't put it down only to diversification because I'm sure, there must be a large enough market or margin and hence the new entrants.
Well, the benefit for us - is that the prices are getting competitive.
For eg. J&J sells 20 pcs for MRP 115 which works out to Rs. 5.75/- per piece.
Huggies followed the same pricing but gives a better margin to the retailers, allowing them to pass that on to consumers.
Wiprosoft made it more competitive at Rs. 60/- for 12 pcs. That makes Rs. 5/- per pc.
Soon, if not already, EasyFit will be entering the market with Rs. 275/- for 60 pcs which makes it Rs. 4.60/- per pc. They have added one more feature to the nappy pads. They have added leak guards as well and I think that's a pretty smart thing to do. So it has most of the features of a diaper at half the price of a diaper.