Notes from China
A
BABY CARE IN
RECESSION-PROOF
CHINA:
CATEGORY
Parents dote on their children in China.
BEFORE TRAVELING to West- ern countries, I always ask my friends what I can buy
for them, and the most requests
by expectant and new mothers
are,“can you ship baby powder
milk (or baby care products) for
me?”It seems logical to me considering the recent safety and
quality concerns over baby care
products here in China. Incidents
such as melamine-contaminated
milk in 2008 and baby powder
containing prohibited amount of
asbestos in 2009 have ruined Chinese parents’ faith in domestic
baby products.
Still, there is an enormous op-
portunity for growth in the baby care market
as China’s baby boom has been looming for
decades. According to Beijing Answer Mar-
keting Consulting, China is currently the
world’s second largest consumer market for
babies and children goods (after the US).
With an annual growth rate of 30% since
2000, this market was worth nearly $16 bil-
tors despite a marked decline
in the birth rate, according to
Euromonitor. The most signifi-
cant one is China’s one child
policy, which resulted in a dis-
tinctive family structure with
four grandparents, two parents
and one child. This “ 4+2+1”
structure in turn results in
grandparents and parents
being keen to indulge the only
child. Another one is long-
term growth in disposable in-
come levels, which enables
grandparents and parents to
spend more freely on children.
According to the China Acad-
emy of Social Sciences, Chi-
nese households spend up to 50% of total
family income on the child.
Ally Dai is senior editor of HAPPI
CHINA. She has more than 10 years
of experience in the cosmetic and food industries.
HAPPI CHINA is a leading media for the China household & personal care industry. Published by Ringier
Trade Media in strategic editorial partnership with
HAPPI, it helps local manufacturers update their knowledge on formulating, testing and packaging, as well
as providing market insight.
Ally Dai
Happi China
Website: www.industrysourcing.com
lion at the end of 2008, and is expected to
reach $23 billion at the end of 2010.
According to National Population and
Family Planning Commission (NPFPC),
some 20,800 babies have been born every
day during the past decade, despite an attempt to curb population growth by the
Chinese government, which adopted its
one-child policy in 1979, which encourages
late marriages and late childbearing and
limits most urban couples to one child. The
one-child policy impacted about 36% of
China’s population and the government
claims the controversial policy has led to
400 million fewer births.
The recent baby boom can be attributed
primarily to economic incentives—
newly-wealthy couples find they can afford to pay
fines incurred from having more than one
child. A survey conducted by the NPFPC
found the number of rich people having
more than one child is rapidly rising. Another reason for the boom is that there are
millions of Chinese in their 20s and 30s
who are now allowed two children under
the policy because they themselves are single children.
Consequently, China’s baby care industry benefited from the two major fac-
Competitive Landscape
No wonder why the baby care segment has
prospered during the past year. According
to a Euromonitor report, sales have
soared—even as the birth rate dropped
from 12. 4 births per 1,000 in 2005 to just
11. 8 births in 2010. The stronger growth
was attributed to consumers’ economic
concerns easing as the Chinese economy
returned to growth.
Baby skin care and toiletries remain the
main entry points to China’s baby care market, and jointly dominate sales, accounting
for 48% and 38%, respectively, of baby care
value sales in 2010, according to Euromonitor. Consumers rarely see a need for baby
sun care or baby hair care. Many parents use
baby bath products both for cleansing and
washing baby hair, while babies are usually
kept out of the sun and thus do not require
sun care products. Meanwhile, consumers
are highly familiar with baby skin care and
baby toiletries thanks to strong consumer
education campaigns from leading companies such as Johnson & Johnson and P&G.
