Challenges and New Opportunities in mother and infant market(syndicated)

CPG, FMCG & Retail | 03-07-2019

According to the latest data released by the National Bureau of Statistics, the total number of Chinese born in 2018 was 15.23 million. This is 2 million fewer births when compared with the baby boom in 2017 due to the recent two-child policy. The increase in population due to the policy will undoubtedly bring about an increase in the demand for maternal and infant products, thus stimulating the development of the market. However, due to the improvement of living standards, young couples tend to consider the cost of childcare when they plan for the next generation. Nielsen's latest report titled the "2018 China Shopper Trend: Mother and Infant Market" shows that the mother and child market still has great growth potential, but also faces many challenges, while the population growth keeps growing but the growth rate slows down.

"The size of China's mom and baby industry continues to grow, in part because of the implementation of the second-child policy. Although the future of the mom and baby industry has significant opportunity, there are many challenges. With the rise of new retail, or the integration of online and offline sales platforms, it is foreseeable that retail competition will grow in intensity. In the face of increasingly discerning consumers, brands must stand out from the complex competitive environment by improving product quality, creating a pristine reputation, and building brand awareness,” said Brady Ni, vice president of Nielsen China.

New Customers: Parents of Second Children Inject New Economic Vitality

Nielsen data shows that parents who have only one child are mostly post-1990s generation (39% ), while parents who have two children are mainly post-1980s generation (76%).

Since there have been experience of caring for the baby, 48% of the parents have the second child are more inclined to choose cost-effective products, while 28% of the second-child parents said that although they have the experience of taking care of the baby, they will pay more attention to the reputation when choosing products. The two-child parents who had purchased mother skin care products were 7% higher than the one-child parents. Obviously, the full opening of the second child's birth policy has a positive impact on the maternal and child products market, and this policy will promote the development of baby food supplements, mother skin care products and infant nutrition products in the short term.

The consumption characteristics of parents in different ages are also different. Parents of 0-3 year old babies are mainly born in the post-80s (64% ). In the decision-making process of maternal and child products, the proportion of mothers making decisions exceeds 90%. Compared with the fathers of other generations, the proportion of post-80s fathers is relatively high, reaching 9%. Post-70s parents tend to buy maternal and infant products in the physical stores, while post-80s and post-90s parents have higher online shopping penetration rate and are more easily influenced by sales promotion staff in physical stores. It is worth noting that a family with a baby of 0-6 months has a significant spending power, and the average monthly childcare expenditure is 1074 yuan, which is higher than that of families with other ages.

New Layout: Diversification of Channel Chain

Nielsen's data show that physical stores of maternal and infant products ( 90% ), hypermarkets/supermarkets ( 68% ) and integrated online shopping platforms ( 50% ) still occupy the top three purchasing channels, The main reasons for shoppers go to physical maternity stores are that they have complete categories ( 64% ) and guaranteed product quality ( 49% ). Shoppers of physical stores are similar to those of hypermarkets/supermarkets, and many of them are about 30 years old working women with higher education.

In addition, 37% of the parents of infants aged 0-6 months pay more attention to the comfortable shopping environment of physical store. 18% of parents of infants aged 7-12 months say it’s most important to have desired goods in the store, and 25% of the parents of children aged 1-3 years say it’s important to have special areas to take care of their children.

New Demand: Enhance Shopping Experience

More than 50% of parents prefer physical stores that have an area to rest. In addition, a special area for mothers to nurse temporarily, baby strollers for shoppers and children's play programs have become the main expectations of parents for the ideal mother-and-infant stores. It can be seen that besides purchase goods, due to the inconvenience of young parents taking their babies out of the house and the single entertainment mode for infants, the mother-and-infant store seeking for development should grasp parents' needs and provide more comprehensive services.

Nielsen's study of 13 major categories operated by physical stores for mother and infant products found that shoppers bought an average of 7.8 categories. Among them, infant diapers, children's clothing and infant feeding products are in the top three with 80%, 74% and 71% penetration rates respectively, while books, children's beds and children's chairs have lower penetration rates. The physical store for mothers and infants can meet the one-stop demand for mother and infant products, with all kinds of needs. Supermarkets/hypermarkets are dominated by diapers and skincare products.

In terms of promotion preference, no matter what kind of category, "direct discount" is the most popular form of promotion for shoppers. Most consumers will carefully compare several different products before making a decision. The ingredients/ materials, prices and recommendations of classmates/friends/family on the product packaging will affect parents' purchase decision.  Therefore, only by grasping shoppers' needs and purchasing habits for different categories in different channels can the brands stand out from the competition.

Tagged:  CHINA

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