• by dave.b , Max Kalehoff , November 12, 2010

Perhaps the biggest news in the Internet industry this week was Amazon.com's purchase of Quidsi, parent of Diapers.com, for $540 million. According to Claire Cain Miller of The New York Times, the "acquisition suggests how far Amazon will go to maintain its edge in many corners of e-commerce." 

With two young toddlers, I can assure you that the diapers business is much more than a niche "corner of e-commerce." It's a high-stakes, highly innovative product category that fuels some of the world's largest advertisers and CPG companies. Global Industry Analysts, Inc. just reported that the global market for disposable baby diapers will reach $29 billion by the year 2015, despite the recession. 

My family has invested several thousand dollars in disposable diapers, and we're not finished yet. A recent discussion with our pediatrician revealed insights explaining why this industry is poised for long-term growth.

Mainly, the diaper industry is innovative and is becoming more sophisticated. From a performance standpoint, diapers hold more liquid than ever before, making dirty diapers more comfortable and less likely to leak. From a branding and packaging standpoint, the industry has created line extensions for every weight, age, sex, stage, activity and brand affinity. Whether your child is a newborn, over 27 pounds, a girl, a swimmer, beginning to potty train, or in love with Mickey Mouse, there's a diaper for you.

The result? The amount of money diaper consumers spend on premium diaper products is increasing. Fueling this trend is a growing class of busy two-income families that have less time for potty-training, less patience for leaky diapers and more neglectful-parent guilt. Kids are graduating to traditional underwear (which demands potty training) at a later age. And this is a global trend.

These factors create a perfect environment for a bustling consumer product category -- and one that Amazon.com is only smart to act on. 

That said, it's important for parents to recognize that the diaper industry is a big business, driven by big marketing. From a practical standpoint, busy and wallet-stretched parents should realize that generic white diapers will usually do just as well as the fancy ones. And any lack of performance from less-than-premium diapers will mainly contribute to a greater desire among your children to get potty-trained faster.

But diaper-mania doesn't end when children get potty-trained. When you reach your senior years, this same industry will be ready and waiting for you with a sophisticated line-up of adult diapers!

Will Amazon.com's next acquisition be Adultdiapers.com?