Requests for comment sent to Zuru’s press office from the Herald went unanswered this week. In a statement to the NAD the company said: “While Zuru respectfully disagrees with NAD’s conclusions regarding the challenged claims, it support the self-regulatory process”.
Zuru, founded by the New Zealand-born Mowbray siblings, has its nappy manufacturing and parent – Zuru Edge – based in Hong Kong, China.
Zuru made its name mass-producing toys in China and selling to the world, making particular inroads into the massive US market.
The company recently expanded its product line into consumer goods with an early focus on nappies.
Zuru, wholly owned by billionaires Nick and Mat Mowbray, acquired Rascals from Hamilton siblings Grant Taylor and Louise Stainthrope in 2020 for a reported $30m. Rascals International was later also re-incorporated in Hong Kong.
The relationship between the Mowbrays and Taylors soured, however, with the former suing the latter over the alleged disclosure of confidential information to a commercial rival who sells the Treasures brand. The civil dispute, including a counterclaim against the Mowbrays, is set down for a four-week trial in the High Court in August.
Zuru distributes exclusively through large chains, with Wal-Mart stocking Rascal and Target selling Millie Moon, and by mid-2022 Zuru claimed to be on track to achieve US$150m ($166m) in annual nappy sales in the US, making it a small but fast-growing player in that country’s US$8.2b ($14.43b) market for what are locally known as diapers.
Kimberly-Clark, along with Procter & Gamble, can be seen as making up Big Nappy with – according to Zuru – their combined global market share being 80%.
The Kimberly-Clark Corporation argued Zuru made a number of misleading claims of product superiority on billboards, product packaging and on social media.
During the course of the complaint process Zuru undertook to permanently discontinue a number of claims made in advertising about its nappies, including that they were the world’s “softest” and “most-absorbent,” and “Never Leaks,” and “Leak Proof”.
Another bone of contention from the nappy giant was over “a series of product demonstrations posted on TikTok, Instagram and YouTube featuring young influencer moms conducting the ‘Five Cups Water Test’”.
The ‘Five Cups Water Test’ involved influencers pouring water into a range of different nappies, showing only Rascals were able to absorb five cups and remain dry.
Kimberly-Clark argued this demonstration failed to account for chemical differences between water and urine. The ionic strength of the latter means less can be absorbed, and when a saline urine substitute was used Rascals was found to only manage three cups.
Kimberly-Clark said Zuru’s research used inconsistent rounding – moving Rascals up from 4.75 to five cups, while rounding Huggies’ 4.63 cups down to four – to make its claim of product superiority.
Zuru’s use of influencers also came in for scrutiny, with the NAB critical of a social media post that failed to make it clear the poster had been provided free Rascals product and had partnered with the nappy brand.
Zuru told the NAD it required all its influencers to comply with applicable laws and regulations, and conspicuously disclose material connections with tags like “ad,” “sponsored” or “paid partnership”.
This policy was considered by the NAD to be a “reasonable monitoring and compliance program”.
Matt Nippert is an Auckland-based investigations reporter covering white-collar and transnational crimes and the intersection of politics and business. He has won more than a dozen awards for his journalism – including twice being named Reporter of the Year – and joined the Herald in 2014 after having spent the decade prior reporting from business newspapers and national magazines.
