Third child policy, consumption upgrades, more attention to high-quality lifestyles, online sales all contributing factors
Contestants attend a maternal and child care competition in Chongqing on Nov 3. China's maternal and infant market is set to see steady growth over the next few years due to growing demand from young parents. (CHEN CHAO / CHINA NEWS SERVICE)
China's maternal and infant market is set to see steady growth over the next few years due to growing demand from young parents keen on high-quality, personalized and trendy products amid consumption upgrades, industry insiders said.
In addition, China's policy to allow married couples to have a third child, announced on May 31, with a view to improving the age structure of the population, will also create more business growth opportunities for maternity and baby product makers, they added.
Many young moms are highly educated, economically independent and tend to shop rationally. They pay more attention to high-quality and cost-effective products. They not only pursue international brands, but also focus on the safety, practicality, durability and materials of those products
Liu Nan, founder and CEO of Mia
Sales revenue in China's maternal and infant goods market rose 5.4 percent in the second quarter compared with the first quarter, according to a survey commissioned by BabyTree－China's leading online service platform for young families－and conducted by market research firm NielsenIQ.
With the increasing urbanization rate and higher disposable incomes, offline sales of maternal and baby products from lower-tier cities and townships accounted for about 60 percent of total offline sales of such products in June and saw rapid growth, the report said.
It noted that the sales proportion of baby formula produced by the Top 10 domestic maternal and infant product manufacturers reached 50 percent in June, an increase of 27.9 percent year-on-year. Mid to high-end baby products, such as baby formula, diapers, skin care products and soaps have gained traction among consumers.
According to the report, people prefer to buy baby diapers and washing and care products from e-commerce platforms, with sales from online channels surpassing 50 percent, while the online penetration of baby formula, infant supplement foods and feeding accessories, such as nursing bottles and pacifiers, is relatively low.
The report also showed that the post-1990 generation accounted for 76 percent of all customers of maternal and baby products, thus becoming the main customer in the category. The majority of new mothers have bachelor's degrees or above and they prefer to watch livestreaming and short videos. Moreover, families spend an average of 6,265 yuan ($970) each month on parenting.
As one of the largest and most active maternity and child-focused community platforms, BabyTree offers parenting knowledge and content covering stages from pregnancy preparation to child care for Chinese families as well as related e-commerce services, said Xu Chong, executive director and CFO of BabyTree.
The company has advantages in terms of big data and insights to help offer effective and differentiated products and services during the COVID-19 pandemic and ease consumer anxiety, Xu said.
Xu is bullish on the prospects of the maternity and baby products market buoyed by the rise in consumer purchasing power and changing consumption concepts.
Customers peruse products at a Mia store in Zhengzhou, Henan province. Mia is an online retailer specializing in mother and baby products. (MA JIAN / FOR CHINA DAILY)
BabyTree's first half revenue amounted to 135.2 million yuan, up 44.2 percent year-on-year, and average monthly active users of its BabyTree Parenting app rose to 21.8 million, up 7 percent on a yearly basis. Revenue from advertising experienced a sharp rebound while revenue from e-commerce recovered slightly.
BabyTree aims to further diversify its business portfolio and extend services, such as providing maternity care and postnatal care and high-quality e-commerce products, in a bid to enhance monetization capabilities, the company said.
It has launched a maternity and baby livestreaming channel, providing all-day webinars and Q&A sessions by experts, and cooperates with short video platforms such as Douyin to drive community interaction to promote sales.
"In the future, we will focus on Generation Z families to grow our business. Meanwhile, we believe that our dual-engine business model powered by advertising and e-commerce will become the new source of momentum for achieving strategic goals aimed at Generation Z families," said Wang Huainan, chairman of BabyTree.
Consultancy iiMedia Research said revenue from the maternal and infant market in China surpassed 4 trillion yuan in 2020, and this figure is expected to rise to 7.5 trillion yuan in 2024. The consultancy said the number of users who purchased such products through e-commerce platforms reached 216 million in 2020.
To meet the growing and diverse demand for maternal and baby products, a string of online retailers have launched customized products and collaborated with foreign brands.
Chinese e-commerce giant JD is betting big on the consumer-to-manufacturer or C2M model, which leverages online retailers' big data and customer analysis capabilities to customize products that meet the demands of Chinese consumers.
It has cooperated with a diaper brand to jointly develop a new paper diaper with enhanced aeration and softness that forms a comfortable seal around the waist, making it more comfortable and convenient for babies to move about.
JD has become one of the largest online retailers of many maternal and baby brands such as Wyeth, Kao, Unicharm, Friso, Nestle, Abbott, Danone and Pigeon. In addition, Jingxi, a business group under JD, opened its first store for baby and maternal products in Chengdu, capital of Sichuan province, in April.
Visitors check out the exhibition booth of BabyTree, an online service platform for young families, during an internet conference in Beijing. (WANG XINFENG / FOR CHINA DAILY)
By integrating omnichannel supply chains, logistics, marketing and technology capabilities, Jingxi empowers the store with standardized decor, pricing and inventory management as well as providing training courses.
Li Jincan, an analyst at LeadLeo Research Institute, said consumption of maternal and infant products in lower-tier cities shows huge growth potential, and people born in the 1990s, who pursue higher-end lifestyles, have become a major force in the category.
The third-child policy will boost the number of newborns and help fuel the development of infant formula, children's clothing, toys and other maternity and baby goods while alleviating the price war in related segments to some extent.
"Parents will spend more on nursing their babies, so business segments like early-stage education, infantile massage and postpartum recovery are foreseen benefiting from the trend," Li said.
Li added that maternal and infant goods with unique designs and excellent quality are more likely to capture the attention of the post-1990 generation, who are more willing to pay for safe, personalized, high-quality and environmentally friendly products.
Mia, an online retailer specializing in mother and baby products, has invested heavily in establishing its self-owned brands such as Mompick and Superfarm.
Liu Nan, founder and CEO of Mia, herself sold 280,000 products, with sales revenue reaching 40 million yuan during a five-hour livestreaming on short video platform Douyin on Sept 19, 2020. About 60 percent of products presented during her livestreaming session came from Mia's own supply chain.
The company will continue to expand the categories of its self-owned brands which cover infant and mom products, cosmetics, nutrition and health goods, as well as strictly control the quality of its products. Liu said more Chinese consumers are interested in online purchases since the COVID-19 outbreak, which has reshaped the shopping habits of consumers.
"Many young moms are highly educated, economically independent and tend to shop rationally. They pay more attention to high-quality and cost-effective products. They not only pursue international brands, but also focus on the safety, practicality, durability and materials of those products," Liu said.
They also have a higher degree of acceptance for homegrown brands and are looking for niche and personalized products, Liu said.
Founded in 2011, Mia is committed to helping middle and high-income families access the best products for mothers and babies, such as diapers, infant formula, toys, and baby clothes from abroad.
The purchasing power of residents in third and fourth-tier cities is increasing, with the integration of online and offline channels continuing to grow, said Cao Lei, director of consultancy Internet Economy Institute. Moreover, the maternal and infant market has extended to the early-education and healthcare sectors, creating more consumption scenarios, Cao added.