According to a report by the Financial Times on May 30, as part of a series of measures to boost the birth rate, China officially reinstated value-added tax (VAT) on contraceptive drugs and devices from January 1, 2026, ending a tax exemption policy that had been in place since 1993 for over 30 years. At the same time, regulators tightened restrictions on contraceptive product marketing, and TikTok (Douyin) banned live-stream sales of condoms starting last October. Jefferies, based on earnings data from Reckitt, estimated that sales of its Durex brand in China fell by about 5% year-on-year in the first quarter of this year, a sharp contrast to the over 40% growth in the full year of last year. Jefferies attributed this primarily to tighter advertising rules rather than the tax policy itself.
From an industry perspective, Durex’s online market share in China fell from over 50% in 2019 to about 29% in 2024. The overall size of China’s condom market also shrank from approximately 20.8 billion yuan in 2020 to 15.6 billion yuan in 2024, experiencing negative growth for four consecutive years with an average annual decline of about 6%, widely attributed to changes in young people’s lifestyles and shifts in intimate relationship patterns. The dual tightening of tax and regulatory policies, combined with the years-long decline in demand, is putting further pressure on the market prospects of foreign brands in China. In contrast, the government has been actively promoting birth subsidies and marriage and childbearing support policies during the same period, reflecting its clear orientation in the choice of population policy instruments.