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Nepal Condom Market Grows as Commercial Brand Sales Skyrocket

Condom Kiosk

Recent data shows the Nepal condom market is growing at a scintillating 64% rate, due in large part to increased brand marketing activity by the commercial sector, which has seen its market share nearly double from 15 percent to 28 percent over a two-year period. AC Nielsen’s retail measurement survey for the four-month period from August to November 2008 registered condom sales at 8.2 million units, up from 5.3 million units for the same period the previous year. Total condom market volume for the Nepal fiscal year ending June 2008 was over 21 million units, up from 16 million units the previous year.

The AED-managed USAID N-MARC project spurred increased condom marketing activity in the private sector using innovative "matching fund” investments inspired by the USAID Global Development Alliance (GDA) model while providing other marketing support. Commercial traders overmatched N-MARC’s direct investments by a 4 to1 ratio, investing commodities and other resources valued at $380,000 versus N-MARC investment of $96,000, over a nine-month period.

Meanwhile, N-MARC continues to support the subsidized condom social marketing efforts of the Nepal Contraceptive Retail Sales (CRS) Company, which also contributed significantly to the growth of the condom market, increasing its sales albeit while losing market share to aggressive commercial traders, who gained share in spite of marketing full priced brands.

A key objective of the N-MARC project is to increase HIV and sexually transmitted infection (STI) prevention practices, particularly condom use, among most-at-risk populations, or “MARPs”. MARPs include groups such as sex workers, transport workers, men in uniform, and migrant workers, and their wives, whose circumstances increase their risk for HIV and STI infection due to unprotected sex with a non-regular partner or with an infected partner (in the case of wives).

N-MARC has sought to increase condom use among MARPs in part by promoting the growth of the condom market, including increasing availability of condoms in “hot zones” where high risk sexual activity occurs or where it is initiated, such as along major transport routes or where there is a concentration of entertainment outlets and hotels. In a departure from previous national prevention strategies, N-MARC has enlisted commercial trading firms in the war against HIV/AIDS, encouraging them to target the marketing of their condom brands to MARPs, joining forces with partners in the non-profit sector such as CRS and the public sector. AED calls this strategy Full Market Impact™ (FMI™) and it is making a difference in the public health landscape of Nepal.

Currently, N-MARC has three commercial trading firm partners, Gayatra Store Enterprises, Praxis Trade Link, and Pioneer Trading Pvt. Ltd, which are marketing a vast array of condom brands with various features that enhance their appeal and utility for the consumer. Among the consumer offerings are a new female condom product called V’Amour and a unique vibrating condom, as well as a selection of condoms in different sizes, shapes, textures and flavors, all of which enhance choice for the consumer and increase the likelihood of use.

Exercising the FMI™ principles of “shared risk, shared reward”, N-MARC provides matching funds for targeted marketing programs that bolster partner investments in product inventory and operations, as specified in collaborative agreements. N-MARC’s commercial partners work with the project team to develop marketing plans and budgets, and they agree to provide monthly sales and financial data. N-MARC also collaborates with project partners to improve their management information systems (MIS) by establishing indicators that reveal the geographic reach of their products and penetration into at-risk population catchments, while also establishing demand-forecasting tools to better serve target consumer groups.

"Matching funds work by spurring commercial investments and competition in a sector that might otherwise be considered a risky business venture," explains AED Resident Advisor, Peter Oyloe. "By providing incentives to expand the market and increase demand -- especially among most-at-risk consumers -- we give the Nepali people quality, affordable products that will thrive in the market long after the project ends."

Praxis Trade Link, the sole distributor of Skinless Skin brand condoms has worked to expand the market for its brand by targeting high-risk locations and a broader consumer base. With the assistance of N-MARC, Praxis now offers a wider variety of condoms - including ribbed, skinless, and the unique Inspiral contoured condom - as well as the V’Amour female condom, for which there is demand in “hot zones” but previously there was no available product. Over the past two years, N-MARC's support and matching funds program facilitated a growth of 46% in sales for Praxis and an astounding 92% increase for Gayatra, currently the condom market leader in the commercial sector.

"The (AED-managed) N-MARC project is not only about the sales of condoms…it has helped us grow, given us so much energy, given us a new identity, given us vision, made us sustainable on our own. It took us from a small company to a corporate entity, (and) made us realize the social and moral responsibilities that we have as a company," says Himal Nath Adhikari, Chairman of Praxis Trade Link.

Encouraged by the success of its condom marketing partnerships, N-MARC has entered into an agreement with a new commercial partner for marketing oral contraceptive pill products, and with a non-profit company for the marketing of a “point-of-use” (household) water purification product. Other commercial and non-commercial partnerships are in development.

Read more about Public-Private partnerships in Nepal and preventing HIV/AIDS through Corporate Social Responsibility, article by Bhaskar Chapagain, Managing Director, Gayatra Store Enterprises.

Posted March 2009

Read more about the Nepal Social Marketing and Franchise Project (N-MARC) project