Why 2018 is the Best Year to Enter China Baby Industry
When it comes to China’s signature features, one of the most famous was surely its One Child Policy. However, as we all know, the Chinese baby industry is not small at all. After the newly implemented plan that allowed for a second child in the family, the China baby market will only continue to expand.
In 2018, the industry size of maternity and baby products is expected to exceed RMB 3 trillion. There are multiple expos that provide opportunities for foreign brands as well, such as China Kids Expo 2018. Considering other factors, this year is, in fact, the best year for foreign companies to enter the China baby market.
Why? Let’s find out.
1. Effect of the Two-Child Policy
In 2016, China changed from its One-Child Policy to the current Two-Child Policy. The whole country was overwhelmed with this policy change. Discussion about giving birth to a second child became intense, especially in the biggest online community, Weibo. Currently, the hashtag of the topic has accumulated over 190 million views.
The Two-Child Policy did not trigger an immediate response though. As families still require time to make decisions and go through the pregnancy period. Therefore, experts conservatively predicted that from the years 2016 to 2021, China is likely to face a birth rate peak.
2018 has the potential to be the peak year. The expected number of the newborn will increase for 400 to 600 thousand due to the policy change. Adding up the existing data, the sum of newborns every year will range from 18 to 20 million, showing the powerful potential of the market.
New Foreign Brands are Welcome to the Market
It is essential for foreign companies to grasp this chance for expansion. The key point is that the change favors a higher diversity of products and more fresh brands in the China baby market. For instance, according to the latest survey in the category of baby food products, 88% of the China interviewees strongly agree that they will consider various new brands present in the market.
If you want to enter the market and become the popular products in China, it is crucial to seize the opportunity with suitable marketing strategies. You will also need to know more about the dos and don’ts when entering China and avoid making mistakes.
2. E-commerce Development Boost the Baby Market
The post-80s and 90s generation in China have gradually become parents now. These young couples grew up in the E-commerce era and are deeply influenced by social media and other digital channels. They are also more open to the idea of purchasing baby products through online platforms.
Although selling baby products offline is still the mainstream in China, online purchase is gaining market share. Regarding latest statistics, the trend of offline sales is decreasing from 94% in 2013 to 77% in 2018. Accordingly, baby products that are sold online are expected to rise from 6% to 23%.
China’s E-commerce environment is extremely developed with leaders like Taobao and Tmall. The established paying tools such as Alipay and WeChat Pay further enable parents to purchase goods online. In 2015, the net worth of online transactions of baby products was 302 billion. In 2018, this figure is expected to reach 494.4 billion dollars.
Mature Industry-Specific Social Media Websites
One of the popular trends in China is the development of industry-specific websites. They aim at a particular group of users and focus to serve them well with reliable information.
The China baby industry has beibei.com and muyingzhijia.com (Home to mothers & babies). They are examples of those renowned platforms that have assembled tens of thousands of consumers interest in learning more about and purchasing baby products. Muyingzhijia.com is the most popular and integrated online platforms for buying diverse maternity and baby products. Beibei.com is the newly established websites that focus on providing genuine and safe products to younger mothers.
If you want your company to enter China, you will regret missing these channels. Making full use of these websites can help you to build up your customer base. It is also an excellent way to gain trust from Chinese mothers and boost your sales with a professional image.
3. Rising Middle-Class and Changing Demographics
The social structure of China is evolving into a new form which favors the entry of foreign companies in 2018. Unlike the situation in the past, consumer behavior is facilitating the selling of baby products. According to latest statistics, from 2010 to 2015, the disposable income per household in China has maintained a yearly growth rate of 10.3%. The trend is pushing up the living standard of citizens and also upgrading the consumption structure.
At the same time, with a higher national education level, Chinese mothers are likely to work even after giving birth to a child. This further increases the income of the family. Parents in China are now more intellectual with intense exposure to global information. Not only can they afford expensive baby products, but they are also willing to offer the best to their children. Under the support of the rising middle-class, the baby industry is expanding vigorously. (Related article: Everything You Need to Know About The Chinese Middle Class)
Quality is Crucial when Selling Products to Middle-Class
Following the rise of Chinese middle-class, the demand of the baby products become complex. Consumers in China now prefer quality over price, especially with the younger generation of post-80s and 90s. They aim to find high-quality products that are safe and, most importantly, not a counterfeit brand. Their focus has changed from looking for discounts or sales to looking for the best products available. This is beneficial for companies who aim to provide more diverse and higher quality baby products.
Last but not least, Chinese middle-class parents are very careful in selecting the platform they make their purchases on. This should lead all brands to consider, what platforms they should choose for listing their products on. The first thing these consumers worry about is whether or not the products are genuine. They rely heavily on the platform as a signal for whether they should trust these baby products. Building trust among consumers takes time, and choosing the right platform can also have an extremely important impact on the trust building process. (Read more)
Conclusion on China Baby Industry
The China baby industry is experiencing a dynamic change in 2018. Foreign companies should grasp this great opportunity to enter the market. However, it is important to know what to avoid when expanding your business in China. Possible misconceptions may lead to serious consequences.
Dragon Social is a professional marketing agency aiming to assist you to enter China. If you have any questions regarding marketing to China, welcome to contact our team for more information!