Sex Ed Rollout in China Seen Benefiting Reckitt to Ansell

The first time Beijing college freshman Guo Si laid hands on a condom was a month before her 20th birthday last year, when she rolled one over a banana during a “companion education” class.

Guo, who moved to Beijing from neighboring Hebei province in 2012, said she had never before had sex education at school.

That’s not uncommon in China. Now, an escalation of HIV, syphilis, genital herpes and other sex-spread infections is spurring demand for knowledge and condoms in a country where intrauterine devices and sterilization are the mainstays of birth control. Colleges such as Guo’s Tsinghua University are holding classes and dispensing free rubbers in vending machines. That’s expanding a market forecast by researcher Global Industry Analysts Inc. to increase 9 percent annually to reach $1 billion by 2018, benefiting suppliers such as Reckitt Benckiser Group Plc (RB/), the maker of Durex condoms, and Australia’s Ansell Ltd. (ANN), owner of a Chinese condom brand.

“It will be a huge and growing market for a long time to come,” said Mickie Leong, who heads a China unit for Ansell that sells a condom called Jissbon, which sounds in Chinese like “James Bond,” the fictional British spy. “As consumers become more educated and more liberal, they consequently understand the need for safety, prevention and happiness all in one.”

Photographer: Wang Zhao/AFP/Getty Images

A couple holds hands as they walk on the streets of Beijing. Close

A couple holds hands as they walk on the streets of Beijing.

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Photographer: Wang Zhao/AFP/Getty Images

A couple holds hands as they walk on the streets of Beijing.

Shares Doubled

In China, 9.2 billion condoms were sold last year, Global Industry Analysts estimated in an October 2012 report. The San Jose, California-based company predicts sales will reach 14.6 billion by 2018 amid “unprecedented growth,” bolstered by increased expenditure on reproductive health-care products.

Enterprise Development Holdings Ltd. (1808) shares have more than doubled in Hong Kong since the investment holding company said on May 16 that it would buy Techno Wing Ltd., which makes condoms in China.

Reckitt Benckiser, the maker of the world’s top-selling condom, said in April that revenue in Latin America and Asia-Pacific jumped 11 percent in the first quarter, helped by Durex sales in China. Better distribution in the Asian nation has driven the condom brand’s growth, the Slough, England-based company said in its latest annual report, without elaborating.

Its local subsidiary, Qingdao London Durex Co., established in a joint venture 1998, is the world’s biggest condom-manufacturing site, according to the company’s website, with 19 production lines making prophylactics sold in more than 20 countries.

Photographer: Daryl Loo/Bloomberg

Jissbon-branded condoms on a supermarket shelf in Beijing. Close

Jissbon-branded condoms on a supermarket shelf in Beijing.

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Photographer: Daryl Loo/Bloomberg

Jissbon-branded condoms on a supermarket shelf in Beijing.

‘More Awareness’

“With the increasing disposable income and rising concern for health, consumers have gained more awareness about condom usage and are willing to pay more for high quality condoms,” Kiki Fan, Nielsen China’s vice president of retail measurement, wrote in a June 3 e-mail.

Still, condom use in China is growing from a low base. Leong’s Wuhan Jissbon Sanitary Products Co., which Melbourne-based Ansell bought in 2006, has annual revenue of $12 million and is the second-largest condom manufacturer in China with 10 percent market share, Credit Suisse AG wrote in a June 21 report.

Ansell shares fell 0.3 percent to A$18.02 at the close of trading in Sydney. The stock has climbed 18 percent this year, while the S&P/ASX 200 Health Care Index has advanced 11 percent.

Thirty years ago, intrauterine devices or IUDs accounted for half of birth control methods used in China, with tubal ligation making up a quarter. Condoms-use was only 2 percent, researchers reported in 1983. Condoms’ share of the contraception market now exceeds 4 percent, according to a 2012 report in U.S.-China Today, a publication of the University of Southern California.

Ms. Contraception

That may help China counter what the National Center for STD control called in 2011 an “increasing epidemic of sexually transmitted infections, including HIV.” From 1991 to 2000, the average annual increase in cases of syphilis was 52 percent and 55 percent for genital herpes. Incidence was highest in the 20-to-29-year age group, and in affluent regions and cities, especially where tourists flock, Liang said in the presentation.

Fewer than 40 percent of people in China ages 15 to 24 received sex education at school, according to a 2009 survey of 22,288 youths by the Peking University’s Institute of Population Research.

At its campus hospital in north Beijing, Tsinghua University has installed a vending machine that dispenses free condoms while doling out sexual advice via an integrated TV screen. A cartoon plays in a continuous loop featuring an egg-shaped “Ms. Contraception” discussing how androgen-blocking contraceptive pills for women can also counter pimples.

Authorities in Hefei, the provincial capital of Anhui, are dispensing free condoms via nine machines scattered across the city, including in the Anhui Agricultural University, the People’s Daily reported on its website in April.

“It’s necessary that the school has something like this,” said Guo, the Beijing freshman, as she lugged a gray haversack packed with biology textbooks after class. “When you’re in university, and you have a boyfriend or girlfriend, sex will come naturally.”

To contact Bloomberg News staff for this story: Daryl Loo in Beijing at dloo7@bloomberg.net; Natasha Khan in Hong Kong at nkhan51@bloomberg.net

To contact the editor responsible for this story: Jason Gale at j.gale@bloomberg.net

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