Following the ongoing "formamide diaper incident," a joint investigation team has been established by four government departments, including the State Administration for Market Regulation, to verify issues related to formamide in infant diapers. The direct impact of this controversy on offline sales is evident on retail shelves.
An on-site visit to major supermarkets and maternal and child product chain stores in Shanghai and Guangzhou on June 23rd revealed that products from the involved brands are still being sold normally. A Babycare store had posted test reports, and sales staff at multiple stores indicated that sales of the affected brands have recently been impacted. Some consumers have also sought returns, with reports indicating that Sam's Club is supporting full refunds for Huggies diapers.
In the capital markets, stock prices of companies related to the incident have shown noticeable volatility. On June 23rd, raw material supplier Satellite Chemical saw its shares hit the daily limit-up, while Jujiao Co., Ltd. shares rose nearly 6% intraday. Shares of maternal and child product retailers Aiyingshi and Child King showed divergent movements.
Sales Continue but Momentum Slows
On June 18th, a report stated that sampling tests detected the toxic substance formamide in infant diapers from several brands including Huggies, Bebebao, and Babycare. The topic trended online that day. On June 21st, the three involved brands released their latest test results on official channels, stating that "formamide was not detected."
As the situation developed, a joint investigation team was formed on June 22nd to verify the issues and handle them according to laws and regulations, with findings to be announced in due course.
The brands' latest test results have not entirely alleviated consumer concerns, and while the joint investigation's outcome is pending, the impact is being felt on store shelves: affected brands remain on sale, but fewer people are buying them; inquiries about test reports have increased, and returns are occurring.
During a visit to a Sam's Club in Guangzhou on the morning of June 23rd, diapers from brands Huggies, Pampers, and Goo.N were available. The Huggies brand, involved in the incident, supplies two series to Sam's Club. A sales assistant mentioned that some consumers who purchased Huggies diapers have recently requested returns.
A staff member at the Sam's Club membership service counter stated that the club supports returns for Huggies diapers, offering full refunds even for opened and used packages.
At a Sam's Club in Shanghai, no test reports were posted for the brands involved in the formamide incident. A sales assistant explained that Sam's Club does not permit posting other materials but confirmed that test reports are available. This assistant also noted recent return activity.
A Babycare store in downtown Guangzhou was relatively quiet even at noon. Test reports stating "Formamide Not Detected in Babycare Diapers" were prominently displayed at the checkout counter and near the diaper shelves. A sales assistant confirmed that the formamide issue has indeed affected the brand's sales, though products remain available.
At a Child King store in Shanghai, a sales assistant showed test reports shared by brands in their work group chat, noting that reports for brands like Huggies, Babycare, and Shengxia Guangnian were synchronized as early as June 20th.
A sales assistant at an Aiyingshi store stated they had not received any notifications about product recalls or problematic batches. The assistant added that fewer people have been purchasing Huggies diapers recently, indicating a sales impact.
Companies in the Diaper Supply Chain
In chain supermarkets like CR Vanguard and maternal and child chains such as Child King and Aiyingshi, the involved Huggies and Babycare diapers are stocked on shelves, with ample supply and prominent placement. Bebebao brand diapers, also involved in the incident, were visible at the Child King store.
According to data from instant consumption goods monitoring firm Mashang Ying, for the period from January to May this year in the offline retail market, Huggies and Babycare both ranked within the top five in market share for the diaper category. These two brands hold leading positions in offline retail, while Bebebao did not make the top ten.
Huggies is a brand under the American company Kimberly-Clark, while Babycare and Bebebao are domestic Chinese brands. However, contract manufacturing is extremely common in the diaper industry. A key consumer question in this incident is whether the issue lies with raw materials or the production process.
Hao Yue Care is a diaper contract manufacturer. It was observed that some products from Babycare and Child King's own brand, Beite Beihu, are produced by Hao Yue Care. According to its 2025 annual report, infant hygiene products account for over 50% of its revenue. The company reported increased revenue but not profit in 2025, a trend that continued into the first quarter of this year.
Satellite Chemical and Jujiao Co., Ltd. are raw material suppliers for diaper brands. Satellite Chemical has stated that its Super Absorbent Polymer (SAP) product is a core material for diapers. Jujiao Co., Ltd. disclosed in its annual report that its clients include mainstream disposable hygiene product brands like Kimberly-Clark, Goo.N, Vinda, and Procter & Gamble. Its 2025 report shows that hygiene hot melt adhesive revenue exceeds 97% of its total, with both revenue and net profit attributable to shareholders growing in 2025 and Q1 this year.
When contacted, a representative from Jujiao Co., Ltd. stated, "We mainly produce for hygiene products like sanitary napkins and diapers. Our products are not involved in the formamide diaper incident, and we have relevant test reports showing no detection of formamide."
Furthermore, Aiyingshi and Child King are listed representatives of maternal and child product retail chains. Aiyingshi saw revenue growth without profit growth in 2025 but achieved growth in both metrics in Q1 this year. Child King achieved growth in both revenue and profit in 2025 and Q1 this year.
When asked if the formamide incident affects their business, an Aiyingshi representative stated, "Other brands have陆续 released test reports. Our own brand has also completed testing, with no formamide detected." A Child King representative said operations are "normal, with no impact."
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