What drives baby products growth in China?

What drives baby products growth in China?
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The mum and baby products market in China has reached almost 1.5 trillion yuan and is expected to reach about three trillion yuan in 2018, with a steady growth rate between 15 to 16 percent.

You may have heard of or seen Chinese bulk-buying baby products like milk formula or diapers, etc when they are travelling overseas. Why do they do that and what are driving the baby products growth in China?

One child policy shaping different buying behaviour

The decades-long one child policy has inevitably shaped a different shopping behaviour among the Chinese parents. Having one child means that the kid is more precious and parents naturally want to give them the best. This has led to a more selective and picky shopping behaviour. When it comes to baby products, many Chinese parents care more on the quality, functionality and brand reputation than prices. They are willing to pay more for safety and better quality.

These behaviours are somehow rooted in the young Chinese parents’ mind. With the relaxed one child policy implemented in 2015 and greater purchasing power among the middle class, the baby products market is expected to grow continuously.

Middle class pursuing a better quality of life

China has now a larger middle class than any other society. When people are getting richer, they have higher awareness on health and want to pursue a better quality of life. As the consumer market heats up, parents of the post-80s and 90s generation seem willing to spend more on their children – buying safer products with high quality regardless of the prices.

In addition to the higher purchasing power, scandals of domestically produced baby products have resulted in distrust of local products among middle class parents. For example, in 2008, China dairy products were found tainted with melamine. The use of melamine in milk has killed six babies and made 300,000 sick. Consequently, they tend to buy western or Japanese brands which give them higher confidence.

Cross border e-commerce opening up

Cross border e-commerce came into the picture in 2014 and changed the e-commerce landscape dramatically. The practical regulations and processes favour thousands of overseas brands to enter the Chinese market in an easier way. This means that foreign brands are more easily accessible to the Chinese consumers.

Moreover, the enormous outbound Chinese tourists can explain the baby products boom. The number of outbound Chinese tourists reached about 120 million in 2016. As mentioned above, the distrust of China produced baby products has led to a bulk-buying behaviour when the Chinese travel abroad. They want to bring back as many baby products as they can – especially when they are in Japan and Australia. Some of the products or brands they bought may not be available in the Chinese market yet. When they want to purchase these products again, they will look for them on the cross border e-commerce sites.

Admittedly, many international baby product brands have already set foot in China, especially in the first tier cities where people are richer. However, this does not mean that your baby products – probably designed and produced in Norway which the Chinese tourists love, stand little chance in China. For small or medium size businesses, entering the second and third tier cities are suitable cut-in points. In addition, cross border e-commerce is a good solution to reduce the risk and cost for your business to enter the Chinese market.

Are you interested in cross border e-commerce in China? Contact us now and let’s bring your products to China!

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