Baby-friendly housing gives birth to new biz

Thanks to the second and third-child policies, the market for goods and services catering to young mothers and their children has been steadily growing in recent years. According to a survey from United States-based data, information and marketing group Nielsen, between May 2019 and April 2021, sales of infant-related fast-moving consumer goods in China, including pacifiers, bottles, diapers, breast pumps, baby food and baby formula, grew at a compound annual growth rate of 5.6 percent.

Between May 2020 and April 2021, the sales volume of the country's overall maternal and infant market totaled 15.6 billion yuan, up 5.4 percent on a year-on-year basis, said Nielsen's survey.

Chen, who has been a market insider for over a decade, said: "With household per capita disposable incomes rising, parents are more and more willing to spend money on their babies. From a long-term perspective, the future growth and sustainability of China's mother and infant market are decent, and there are vast business opportunities ahead."

Parental demand for high-quality maternal and infant products has been rising. A more specialized, higher-end market will usher in opportunities for continuous growth, industry experts said.

According to the 2021 Maternal and Infant Industry White Paper issued by Beijing-based marketing service platform Ocean Engine, since the COVID-19 broke out, parents have been more willing to buy high-priced products for their children. Consumers in the new era, represented by the post-1990s generation, have gradually become the mainstream of the parental group, and their parenting concepts, related consumer behaviors and attitudes have all undergone changes.

"When it comes to maternal and infant products, consumers value the quality and appearance of goods, and are more willing to spend money. Such consumption concepts have driven the consumption upgrade of the maternal and infant market," said the report.

Chen agreed, saying: "With consumption upgrades, baby-related products have also been upgraded. Nowadays, babies have exclusive personal care products catering to them, including face washes, face creams, body washes, shampoos and haircare products. Also, for children in different age groups, there are differentiated products. For example, personal care products for newborns, preschoolers and older children vary. Some skincare companies are considering developing products for children in junior high school and for their mothers, so that they can share skincare products."

Kids prefer various fragrances for their products, which gives us the motivation to develop better-quality, natural, additive-free products, Chen added.

Shenzhen Securities Times said currently, there are more than 100 listed companies in the A-share market with businesses related to the maternal and infant sector, covering skin care, dairy products, children's medicines, toys, retail and clothing.

More than five institutions forecast that in the next three years, a total of 24 companies are expected to have an over 10 percent year-on-year increase in net profit. Among them, Anhui Anke Biotechnology (Group) Co Ltd is expected to grow at a compound annual growth rate of 94.6 percent.

Also, among the 24 companies, Yunnan province-based biopharmaceutical company Botanee Group Co Ltd, which created a sub-brand "Winona Baby" for toddler skincare, received a northbound investment of 649 million yuan in April.

Wei Zhe, co-founder and chairman of Vision Knight Capital, said, "The shifting of the consumption group and their consumption concepts offers new brands in the sector more business opportunities."

Regarding consumer brand choices, Chen from Burdock Biotechnology said that for most high-end consumers, their first choice will be famous brands, especially international brands. However, he also noted that with the rise of the guochao trend or the Chinese cultural tide, newly emerging domestic brands also have chances to present their maternal and infant products to consumers.

"High-quality domestic brands are entering a rapidly growing phase. In the past, the knowledge of raising a child was passed on from experience. Now, even in fourth and fifth-tier cities, parents can easily access scientific parenting knowledge through various channels. With the help of social networking, e-commerce platforms, celebrity endorsements, key opinion leaders and consumers, homegrown brands are able to get connected with consumers and gain trust among the latter," Chen said.

"KOLs and KOCs have an influence on consumers, who tend to acquire brand recognition and then purchase products," he added.

As promising as China's mother and infant market is, experts said industry players should carefully work out business strategies.

Chen Xianglin, chairman of children's brand Igrowkids, said that as household income levels continue to increase, people's sensitivity to prices is also decreasing, and it is difficult to impress consumers simply by relying on low prices.

Consumers' consumption thinking has gradually matured, and decision-making will become more complex and diverse, he said.

Shi Qiong, chairman and president of Shanghai-based mother and infant brand Babemax, said, "Under the consumption upgrade background, when facing consumers, especially young consumers, maternal and infant industry brands need to understand their mentality and ways of thinking, and work out diversified, customized business strategies."