Tracking the Formamide Controversy in Diapers: Hidden Risks in the OEM Supply Chain Surface

An unresolved diaper testing controversy is bringing the baby diaper industry chain into the spotlight.

On June 18, Xinhua News Agency's Economic Information Daily published an investigative report stating that reporters commissioned professional institutions to test baby diapers available on the market. Formamide was detected in samples from brands such as "Huggies," "Biba Baby," and "Babycare."

The report also cited relevant data from the Shandong Public Health Clinical Center, stating that formamide was also found in some infant blood and urine samples.

The incident quickly became controversial. Medical institutions, industry associations, and brands questioned the testing methods, sample sources, and medical evidence cited in the report.

On June 21, Huggies, Biba Baby, and Babycare released third-party test results one after another, all claiming that formamide was "not detected" in the diaper samples. Babycare also stated that it had reported the case to the public security authorities.

So far, national regulatory authorities have yet to release a final investigation conclusion. This means the episode cannot be simply characterized as a product quality accident, nor can outside doubts be fully dismissed just based on brands’ internal testing results.

The current GB/T 28004.1-2021 "Diapers Part 1: Infant Diapers" does not list formamide as a special detection item, nor does it set a corresponding limit requirement. GB 43631-2023 "Basic Safety Technical Specifications for Paper Products for Infants and Children" also does not make specific provisions for formamide in diapers.

According to "Beijing News," a relevant official from Zhongqing (Jinjiang) Hygiene Products Research Co., Ltd., one of the drafters of the GB/T 28004.1-2021 standard, stated that limitations on chemical components in commonly used raw materials for baby diapers were already set when the standard was drafted. Formamide was not included in routine testing because "it should not exist in this industrial system."

On the other hand, GB 15979-2024 "Hygiene Requirements for Disposable Hygiene Products" imposes stricter demands on raw materials for disposable hygiene products, clearly requiring raw materials to be non-toxic and harmless, and prohibiting the addition of banned chemicals listed in the "Cosmetics Safety Technical Specifications."

Formamide is also not an unfamiliar risk substance in other consumer product safety systems; the European Union has classified it as a risk substance with reproductive toxicity.

Behind the current conflict is a gap in the standard system:

When national standards for diapers do not include formamide as a routine test item, it is difficult for consumers to determine whether there is a gap between "compliance" and "safety."

While public opinion around brands continues to ferment, upstream OEM factories face not direct public pressure, but more hidden and long-lasting order risks.

Haoyue Care is the most watched A-share sample.

The company has public cooperation relationships with brands such as Babycare, Kimberly-Clark, and Aido Group. In 2025, the company achieved a revenue of 3.756 billion yuan, up 28.22% year-on-year; of which baby hygiene product revenue was 2.017 billion yuan, accounting for 53.70% of total revenue and remaining the largest business segment.

On the afternoon of June 22, a relevant person from Haoyue Care responded to Wallstreetcn through investor communication channels, stating that the company had tested raw materials, its own brand, and OEM brands, and no relevant substances were detected; the testing included both the company's own tests and joint tests with clients.

The reason why pressure on OEMs is noteworthy stems from the relatively weak position of upstream manufacturing in the current diaper industry chain.

In a stock competition environment, the diaper industry shows a pattern of "concentrated brands, dispersed OEMs." Leading brands continually increase their market share through channel, marketing, and operational advantages, while market concentration keeps rising.

Because diaper manufacturing is not a monopoly technology, and brands need to diversify supply risks, control costs, and meet varying product and channel demands, they usually keep multiple OEM factories for collaborative production.

Babycare is a prime example.

Babycare has built a global supply chain network with 9 strategic partners and 10 deep cooperation partners, with most products produced by Haoyue Care, Jieya Co., Shanghai Chongxing, and Jiangxi Wangwang and other OEM factories.

Logistics costs also limit upstream concentration. Diapers have low unit prices, large volumes, and are sensitive to transportation, making national distribution hard to rely on a single factory.

Even leading OEMs like Haoyue Care need to set up production bases in Hangzhou, Shuyang, Xiaogan, Xiantao, Hefei, Nantong, Thailand, and other places to be near clients, reduce logistics costs, and improve delivery flexibility.

This structure increased efficiency and reduced costs during periods of high industry growth; but entering stock competition, it concentrates pressure on OEMs.

Brands try to maintain growth by grabbing market share, pursuing premiumization, and developing niche series, while OEMs have to accept lower processing prices, shorter delivery periods, and more complex quality control requirements.

Haoyue Care wrote in its 2025 annual report that to support client terminal market competition, it reduced prices for ODM business, affecting profitability. That year, baby hygiene product revenue was 2.017 billion yuan, down 2.1% year-on-year.

If future regulations include formamide and other potential risk substances in routine diaper testing, OEMs will face higher compliance costs.

But in the medium and long term, it may be an external force driving up industry concentration.

Leading factories with testing systems, quality control ability, and stable large clients may use stricter regulation to eliminate a batch of low-priced, long-tail, and less compliant small and medium capacities.

Therefore, whether the formamide suspicion ultimately spreads to OEMs depends on regulatory investigation conclusions and brand order changes. But what is certain is that this turmoil has already exposed structural contradictions in the diaper industry chain.

Consumers place their trust in brands, brands split production among multiple factories; in the past, this model improved efficiency and reduced costs, but now it complicates quality responsibility, raw material traceability, and testing standards.

Upstream in the baby diaper industry, you can no longer just be a silent manufacturer.

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