It looks kind of bruised to me.. Could he have somehow hit it on something or with a toy maybe?? Not really sure but the redness doesn't look too serious though. I'd just put plenty of desitin on it every diaper change. If it starts to develop into little spots then he might have some yeast & you'll need to take him to his pediatrician to get some nystatin cream.

I usually put Lotrimin on my son with blue box Desitin. Clears up immediately.