Mother & Baby Sector Insight 2019 - In collaboration with: China-Britain Business Council
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Mother & Baby
Sector Insight 2019
In collaboration with:
CBBC Research Mother & Baby
Sector Insight 2019
Santander is pleased to have once again led a delegation to the Children Baby Maternity
Expo (CBME) in China in conjunction with the China-Britain Business Council (CBBC). As a
bank with international presence in 10 core markets and many more via our network of
alliances, Santander UK focuses on helping businesses prosper by being the “accelerator
for business growth”. We know that businesses want to grow in their current markets
and even beyond – that is why we have a deep, holistic and tailored approach to our
international proposition to help with their international growth ambitions.
Trade missions are one of the ways more than GBP 3 billion year-on-year. In baby and maternity store visits, testing
where we help. China was chosen as the addition, Chinese consumers are willing to laboratory visits to ensure products can be
destination for the trade mission due to pay higher premiums for high quality and sold in China, marketing briefings, Key-
it being a major hub for the maternity, high safety baby products. Opinion-Leader (“KOL”) strategy, and visits
children and baby market, worth more to the CBME trade show.
than GBP 339 billion in 2018. The child For this trade mission, Santander, together
population has grown significantly over with CBBC and DIT, organised 1-2-1 To find out more about how we can support
the last couple of years, and the industry matchmakings for our delegates to meet your ambition to grow in China, please
is expected to see consumption growth of Chinese buyers. In addition, there were contact dennis.lin@santander.co.uk
2
CBBC Research Mother & Baby
Sector Insight 2019
THE MARKET OPPORTUNITY
The growth in China’s Mother & Baby market has been well documented and shows no sign of stopping. According to Mr Enlong Hou (COO,
Suning Commerce Group) the value of the mother and baby market in China reached RMB 2.59 trillion (GBP 298 billion)1 in size by 2017 and
with the introduction of China’s two-child policy, it is predicted to reach RMB 3 trillion (GBP 345 billion) by 2019.2
Figure 1: Market Size and Growth Rate of
China’s Mother & Baby Product Market by Year3
Market Size, RMB Billion Growth Rate %
3500 20%
15.8% 16.2% 16.3% 16.5%
15.7%
Market Size, RMB Billion
3000 13.7%
13.5% 3019
2500 2227 15%
Growth Rate %
10.4% 1916 2591
2000 1654
1430 10%
1500 1258
1108
1000 5%
500
0 0%
2011 2012 2013 2014 2015 2016 2017 2018E
Year
Among the fastest growing sub-sectors within China’s market for Mother & Baby products is fast-moving consumer goods (“FMCGs”),
seeing a growth rate of 9.0% in 2017. Within this category, market demand for baby diet supplements grew by 32%, and baby care products
grew by 18.7%, as shown in Figure 2. Meanwhile, the largest product categories are infant formula and nappies, which grew at 8.7% and
6.8% respectively in 2017.
Online, childrenswear and shoes were the most popular sub-categories sold in 2016, with casual shoes and sports shoes for children being
particularly popular. In addition, baby carriages and cribs also performed well.4
Figure 2: Growth of 40%
Mother & Baby 30%
32.0%
Growth Rate
Fast-Moving Consumer 18.7%
20%
Goods, 2017 8.7%
10% 6.8%
0%
Diapers IMF Products Baby care Dietary
supplememnts
Products
1
https://finance.yahoo.com/currency-converter/
2
http://36kr.com/p/5078310.html
http://www.baobei360.com/Articles/Html/2018-03-19/152558.html
http://research.baobei360.com/a/20161023/10004016.html
3
http://www.sohu.com/a/228160600_372052
4
Kantar World Panel: New Generation’s Baby Shoppers Behaviour
http://www.sohu.com/a/160585389_766558
http://research.baobei360.com/a/20161023/10004016.html
3
CBBC Research Mother & Baby
Sector Insight 2019
Different product categories within China’s Mother & Baby market display various levels of development, as Insight & Info Consulting Ltd has
summarised, and as is shown in Table 1 (below).5
Table 1: The Development Levels of Selected Product Categories
PRODUCT CATEGORIES MARKET CHARACTERISTICS MARKET NEEDS & POSSIBLE CHANNELS
• Children’s food; High degree of market saturation There is strong demand for international baby formula
• Children’s skincare products; concentration; high importance and nappy brands in China; Chinese consumers pay a
• Fast moving consumer goods. attached to brand. close attention to which brand a product is labelled as;
all retail channels would be suitable for these products.
• Childrenswear; Low degree of market saturation; Brands new to China need to first raise brand
• Children’s footwear well-known brands see more awareness; shopping centres, department stores, and
and accessories. success in the market. online platforms are all suitable for these products.
• Functional appliances; Low degree of market saturation; Brands new to China need to first raise brand
• Daily-use goods; wide range of sub-categories. awareness; shopping centres, department stores, and
• Toys for young children. online platforms are all suitable for these products.
• Children’s car seats. Low degree of market Despite the low degree of market penetration and
penetration; opportunities for awareness of car seats, demand for car seats in
expansion of these products. China is increasing; hence there are opportunities
for international brands in this market. Consumers
generally require to test these products on-site,
therefore Mother & Baby product stores would be a
suitable channel for distributing car seats.
Demand for Mother & Baby products is not restricted to first- and second-tier cities. Economic and cultural differences between more affluent
cities and those that have lower incomes has resulted in consumers with different demands, and lower-tier cities are expected to record
strong growth in the coming decades. Some key trends that look set to define the Mother & Baby sector over the next decade include:
A New Generation of Mother & Baby Consumers
Consumption of Mother & Baby products in Convenience and fashion are more The generation of mothers born after 1985
China is mainly driven by those born after important to today’s young mothers are more economically independent than
1985, with these generations generally than to those from previous generations. previous generations, and are therefore
considered to be more willing to try new Coupled with a growing disposable income pursuing a high quality of life, as well as
products, as well as heavily influenced by that these mothers are partly spending improvements in their personal appearance.
the Internet, and open to international on Mother & Baby products, new market The annual expenditure of this new
culture. sub-sectors are being created to meet generation of mothers on Mother & Baby
their needs, such as skincare products for products ranges from RMB 5,000 (GBP 588)
pregnant women; a market predicted to be to RMB 18,000 (GBP 2,118).6
worth RMB 4.7 billion (GBP 540.2 million)
by 2022.
5
http://www.gyii.cn/m/view.php?aid=208253
6
http://mini.eastday.com/mobile/180322150923810.html
4CBBC Research Mother & Baby
Sector Insight 2019
Demand for Higher Quality Products Key Distribution Channels
Quality is more important than ever for Chinese parents, which Both online and offline distribution channels are dynamic and
presents a significant opportunity for international companies, complex, with major companies across both channels seeking
which are often perceived by Chinese consumers to be of a higher to take advantage of growth in the Mother & Baby sector, and
quality, safer, and more reliable than their Chinese counterparts. differentiate their approach to the market from those of their
competitors. Online sales made up 16.3% in 2017, with this
The effects of this drive for quality can be seen in ever-more
expected to increase to 27.7% by 2022.8
specific and detailed consumer demands for products to be healthy,
pollutant-free, environmentally friendly, and contain minimal added Supermarkets still dominate the offline market in China as a whole,
additives, as well as to have a long service life.7 but specialist stores attract 57% of shoppers in first and second
tier cities. Growth in specialist baby product stores is predicted to
Researching online outpace that of other channels to become the main offline sales
From community E-commerce, to user reviews left online, to simply channel for Mother & Baby products in China by 2020.9
discussing new products on social media, Chinese mothers are using
Finding the right model to access the market is key to success in
the Internet as an information source more than ever before. On
this competitive market, and various options are available to UK
the Chinese search engine, Baidu, more than 100 million searches
exporters, as shown in Table 2 (below).
related to Mother & Baby products are conducted each month.
Table 2: Potential Distribution Models Available to UK Exporters
LOW CAPITAL LOW CONTROL OF OFFLINE CONTROL GIVES IDEA DIRECT RISKS/LIMITATIONS
INVESTMENT OPERATIONAL PRODUCT SALES OF SALES OF MARKET ACCESS TO
RISK BRANDING DEMAND CONSUMERS
AND/OR END
USERS
CROSS BORDER Not Yes Yes No Yes Yes Yes Government policies and
E-COMMERCE always regulations changeable.
Limited market share; no
product in-market.
DISTRIBUTOR Yes Yes No Yes No No No Loss of control on pricing
and branding. Limited
oversight on exact
activities.
CONSIGNMENT No No Yes Yes Yes Yes Yes Greater risks of product
TO RETAILERS not selling, and paying
higher costs for
consignment. Potential
return of stock.
DIRECT SALES Yes Yes No Yes No Yes Yes Potential risk of retailer
TO RETAILERS managing brand. Low
visibility on performance.
7
http://mini.eastday.com/mobile/180322150923810.html
http://www.sohu.com/a/160585389_766558
8
https://ww2.frost.com/files/9415/2689/0964/Preview_-_the_Cross-border_E-commerce_Haitao_Opportunity_in_China_Preview_mtd.pdf
9
http://www.sohu.com/a/228160600_372052
Online Consumption Trend Report for China Maternity and Baby Products 2017 by JD Big Data Research Institute
5CBBC Research Mother & Baby
Sector Insight 2019
Online Channels
As stated in the China online retail market data report- 2018 H1 Among all Mother & Baby products sold online, sales of clothing
released by China E-Commerce Research Centre (电子商务研究中 comprise over 25% of the total and are likely to have a total sales
心发布了《2018年（上）中国网络零售市场数据监测报告》), value of approximately RMB 192 billion (GBP 22.7 billion) by
the market size of China’s mother and baby e-commerce in the 2018.10 Key platforms for this product category are shown in Table 3
first half of 2018 reached RMB 374 billion. By the end of 2018, the (below).
number was estimated to be RMB 747 billion. Source: http://news.
baobei360.com/research/2018-10-31/10008493.html
Table 3: Leading E-Commerce Platforms
NAME USER PROFILES DESCRIPTION
Tmall Global Registered users: 500 million Comprehensive online shopping platform with
Daily visitors: 60 million cross-border E-commerce section
JD Worldwide Registered users: 300 million Comprehensive online shopping platform with
cross-border E-commerce section
Kaola Active users: 50 million Specialises in cross-border E-commerce
VIP Registered users: 300 million Comprehensive online shopping platform with
Active users: 58 million cross-border E-commerce section
Mia.com Registered users: 30 million The first flash sales platform in China offering imported
Mother & Baby brands
Mama.cn Active users: 4 million Content-driven social E-commerce platform focusing
on the Mother & Baby sector
Babytree.com Active users: 9 million Content-driven social E-commerce platform focusing
on the Mother & Baby sector
Little Red Book Registered users: 70 million Specialises in beauty and personal care, healthcare,
(mobile only) and Mother & Baby care products
10
CBBC ; Santander;
https://www.sovereigngroup.com/wp-content/uploads/2015/04/China-e-commerce-2016-for-website.compressed.pdf
https://www.sohu.com/a/219536078_119659;
https://www.thedrum.com/news/2018/08/20/china-e-commerce-market-forecast-reach-18tn-2022
6CBBC Research Mother & Baby
Sector Insight 2019
Offline Channels
Table 4: Large Offline Store Chains
STORE NUMBER OF STORES DESCRIPTION
Kidswant 227 offline stores and Established in 2009, Kindswant is well-known maternity and baby retail brand
one online store in China providing a full range of products and services for mothers-to-be, and
children aged up to 14.
Kidswant’s 227 large and fully digitised stores are located in 19 provinces and
109 cities cross China. To accompany its physical stores, Kidswant launched its
online app in 2015, which had been downloaded by 6 million users by 2017. It is a
content-oriented and community-based maternity and baby platform.
Leyou 580 offline stores and six Set up in 1999, Leyou is a maternity and baby chain store brand with O2O
online stores omni-channels for maternity and baby products. Leyou adopts the “App+
online shopping mall + chain stores” business model with the aim of providing
consumers with one-stop professional services and a convenient and comfortable
shopping experience.
Leyou has worked with more than 530 suppliers from 21 countries across the
world, and owns more than 30,000 SKUs in 16 product categories, including
children's and maternity clothing, toys, car seats, children’s furniture, milk
powder, food, feeding supplies, toiletries, and diapers.
les enphants 382 stores and seven Les enphants first came to mainland China in 1993. It is composed of four
online stores companies in mainland China covering maternity and baby clothing, daily
supplies, toys, and logistics, respectively.
Les enphants has established branch offices in Shanghai and Beijing and several
regional marketing centres in China. Apart from the 382 direct-operated stores, it
also has 426 franchised stores covering China’s first and major second tier cities.
The brand is seeking to build a more extensive presence by opening and running
counters in many shopping malls such as Bailian and Wangfujing, and working
with large shopping complexes.
Les enphants established its flagship stores on Tmall, JD, VIP.com, and other
E-commerce marketplaces in 2012.
Baby Bear 230 stores and two Wholly owned by Infore Group and founded in 2003, Baby Bear is a famous
online stores Chinese maternity and baby chain store brand focusing on providing mid to high-
end products and services to families with babies and children aged up to six years
old.
Baby Bear’s business covers seven large provinces (Hunan, Hubei, Jiangsu,
Shanghai, Jiangxi, Sichuan, and Chongqing), providing 17 categories of
commodities including milk powder, nappies, high-end children’s clothes, shoes,
maternity clothing, and bedding. It currently owns more than 230 stores with 5
million members and continues to actively expand.
Baby Bear has established its omni-channels by integrating its online and offline
resources so as to provide its customers with a convenient and comfortable
experience of purchasing goods and using its services. Baby Bear has also set up
its own flagship stores on key E-commerce marketplaces, including Tmall and JD.
Aiyingdao 1,600 stores and one Established in Zhuhai, Guangdong Province in 1998, Aiyingdao is one of China’s
online store biggest maternity and baby chain store brands. It has more than 1,600 stores
(both directly-operated and franchised models) in 12 provinces, across over 80
cities in South China, East China, and Central China, as well as an online shopping
mall (baby.com.cn). Aiyingdao’s key product categories include baby food, daily
necessities, toys, and clothing.
7CBBC Research Mother & Baby
Sector Insight 2019
Intellectual Property
Protection
A key preparatory step to consider before entering the China
market is registration of your intellectual property (“IP”)
rights, including trademarks and patents. CBBC recommends
reading the detailed guidance on this available on our
website www.cbbc.org.
8CBBC Research Mother & Baby
Sector Insight 2019
Regulatory Environment & Trade Compliance Requirements
Intertek agencies, social organisations, and non-government bodies, such
as professional shoppers. Key government bodies in charge of
The children’s sector in China is highly regulated. It is important regulations related to the maternity and baby product industry
to understand which standards (known as “Guobiao”, or “GB”), include China Customs and the State of Administration for Market
certification, or other tests are required for products, and what Regulation (“SAMR”), while the China Consumers Association
effect this will have on your route to market. (“CCA”) is a semi-government agency.
China's regulatory regime is still in the process of reforming, and The testing requirements for market entry can be split into three
there are currently multiple regulators within the Mother & Baby parts: laws and regulations, mandatory standards, and product
product industry, including the government, semi-governmental standards, As Figure 1 (below) shows.
Three aspects of
Legal Compliance
of commodities
Laws and Mandatory Product
regulations standard standard
Laws and regulations are Mandatory standards Product standard is
compulsary and non- must be adhered to normally stated on the
compliance is a serious label and once used, the
offence product must comply to it
(optional but beneficial)
Products affected include:
• Clothing and soft furnishings (both mandatory testing and labeling requirements apply);
• Feeding accessories (mandatory standards apply);
• Toys and games (some require CCC certification);
• Cosmetics or skincare products (mandatory testing and filing regime);
• Car seats and prams (CCC required).
For further information or product-specific advice, please contact Mr Joseph Peng, joseph.peng@intertek.com.
9CBBC Research Mother & Baby
Sector Insight 2019
Marketing
Key Online Marketing Trends in the
Mother & Baby Product Sector
With over 800 million Internet users in China, 98% of which go
online using a mobile device, it is little wonder that international crucial, especially in smaller cities, as parents sometimes still prefer
companies first focus on digital channels when entering the Chinese to test baby products out and make inquiries with salespeople.
market,11 with 73% of digital purchases now made on mobile Companies are therefore exploring an omni-channel approach when
devices in China.12 However, a company’s offline presence is still marketing Mother & Baby products in China.
Case Study: Biostime
Biostime Omni-Channel Campaign
Biostime, one of China’s largest brands of milk formula for expectant Mother & Baby KOLs
and nursing mothers, organised an omni-channel campaign by
launching its family yoga camp through online platforms, before Apart from having a verified branded presence on Chinese social
inviting Key Opinion Leaders (KOLs) to participate in its offline platforms, it is also crucial to involve influencers or KOLs that
activities. This campaign not only raised the awareness of this can endorse a brand. Engaging with KOLs in the Chinese digital
brand in the Chinese market, but also positioned it as a brand that ecosystem is a key component of marketing activity in China, more
mothers can rely on. so than in many western countries. With multiple brands trying
to attract Chinese consumers, Chinese parents are more selective
of which brands they choose, and heavily rely on word-of-mouth
recommendations from friends and KOLs.
KOL Campaign Example
An example can be seen in the recent launch of Teletubbies’ new
series on Subscription Video on Demand (“SVOD”) platforms in
China. Teletubbies partnered with a popular celebrity, Da Tao, who
has a two-year-old son, who produced a short film set in London
and posted it on her social media accounts, to announce the launch
of the new series. Da Tao’s video highlighted the educational aspect
of the new Teletubbies series and also played on the memories
which young parents who grew up watching Teletubbies may have.
The video generated approximately 3.5 million views and garnered
significant interest from Chinese parents.
11
https://www.forbes.com/sites/niallmccarthy/2018/08/23/china-now-boasts-more-than-800-million-internet-users-and-98-of-them-are-mobile-
infographic/#5616f8a77092
12
https://www.forbes.com/sites/niallmccarthy/2018/08/23/china-now-boasts-more-than-800-million-internet-users-and-98-of-them-are-mobile-
infographic/#5616f8a77092
10CBBC Research Mother & Baby
Sector Insight 2019
Aside from celebrity influencers as KOLs (Key Opinion Leaders), brands can also consider working in partnerships with experts such as
nutritionists, authors and educators, some examples of which can be seen in Table 5, below:
Table 5: Examples of KOLs in China’s Mother & Baby Market
KOLs INTRODUCTION
年糕妈妈 Nicomama has over 16 million followers in total across various online platforms. Her most read
(Nicomama) article achieved a readership of more than 2.2 million.
The platform was established 4 years ago by an individual KOL and is now an integrated platform
with functions and services including community, expert Q&A, and an online shop.
大J小D Big J little D has over 278,000 followers on Weibo and shares stories related to her difficult
(Big J little D) experiences during childbirth and raising her child under the guidance of a US doctor.
君君食尚美妈 Meima Loves Cooking has close to 2 million followers on Weibo. Her content focuses on baby
(Meima Loves Cooking) foods, nutritious meals, travel, and lifestyle.
Recommendations for Marketing
Most brands are familiar with online marketplaces such as Tmall As most Chinese parents are first-time parents, they often seek
or JD, but it is also important to explore partnerships with targeted information and conduct their research online. It is therefore
Mother & Baby product platforms such as Babytree and Mia. important to ensure that branded content is also coupled with
com. Apart from having E-commerce features, these platforms engaging, insightful, and creative information. Constant sales-driven
also serve as a community for mothers to share information and posts are a necessary component of online content but should not
recommendations. Companies are also exploring co-branding and be the bulk of the content. In China, parents are most attracted to
collaborations, as seen in a campaign for Babyfirst, which worked companies committed to their children’s wellbeing and that are
with Kidswant, ibaby, Purecotton, and Matern'ella during China’s perceived as being accessible, trustworthy, and reliable.
Children's Day on 1st June 2018; covering multiple Mother &
Baby social channels, and receiving positive reviews from users.
This campaign increased awareness of Babyfirst and expanded its
customer base at the same time.
11CBBC Research Mother & Baby
Sector Insight 2019
Case Study: Frugi
Frugi, a large ethical and organic children’s Frugi has since gone on to secure initial
clothing brand from Cornwall, is a family-run orders from China, and continues to explore
company producing products in bright and opportunities with other partners.
vibrant colours and that feature a variety of
To enable that first step into such an
characters and designs.
important market, the help from CBBC
China presented a new market for Frugi, so and Santander was invaluable, the market
it decided to explore this opportunity. Frugi research element was a huge help, and
commissioned a research project with CBBC the in-market support essential. The team
to include bespoke market information and created a trade mission with broad appeal
introductions to potential partners. It then to all businesses attending, yet managed
joined a Santander-CBBC trade mission to to provide focussed support to Frugi and
the Children, Baby, and Maternity Expo in our individual needs. Our first step into
July 2018, meeting with several Chinese China will be made with more planning and
buyers through the matchmaking activities understanding as a result...”
organised as part of this mission.
Neil Roach (International Distribution
Manager, Frugi)
Next Steps
Taking preparatory steps, building a brand, establishing routes To learn more about doing business in China, please visit the CBBC
to market, and ultimately continuing to grow in China can seem website for information about support, services, and upcoming
daunting. It is important to learn and benefit from the expertise events.
of partners in both the UK and China to tackle these challenges To be put in contact with a CBBC China Market Business Adviser,
effectively. please contact: enquiries@cbbc.org
If you would like to find out more about how Santander can support Telephone 0800 389 7000. Calls may be recorded or monitored.
you and your business please visit: www.santandercb.co.uk Authorised by the Prudential Regulation Authority and regulated
by the Financial Conduct Authority and the Prudential Regulation
Products and services are subject to eligibility, status, terms and
Authority. Our Financial Services Register number is 106054. You
conditions and availability.
can check this on the Financial Services Register by visiting the FCA’s
Santander UK plc. Registered Office: 2 Triton Square, Regent's Place, website http://www.fsa.gov.uk/register. Santander and the flame
London, NW1 3AN, United Kingdom. Registered Number 2294747. logo are registered trademarks.
Registered in England and Wales. www.santander.co.uk.
12CBBC Research Mother & Baby
Sector Insight 2019
Annex:
Table 6: Major Trade Shows in the Mother & Baby Product Sector,
or which feature Mother & Baby Products
EXHIBITION TIME VENUE WEBLINK
Children-Baby-Maternity Late July 2019 National Exhibition and www.cbmexpo.com
Expo (“CBME”) Convention Center (“NECC”),
Shanghai
Ying BashaBaby / Early October 2019 China National Conference bj.yingbasha.com
Children Expo Centre (“CNCC”), Beijing
Best of British October 2019 Shanghai Exhibition Centre, www.thebestofbritishshow.com
Shanghai
China Kids Expo Mid-October 2019 Shanghai New International cn.china-kids-expo.com
(“CKE”): China Expo Center (Shanghai)
International Baby
Articles Fair
China Toy Expo Mid-October 2019 Shanghai New International cn.china-toy-expo.com
Expo Centre, Shanghai
MBC China Early November 2019 Shenzhen Convention & www.mbcexpo.cn
Exhibition Centre, Shenzhen
China Jiangsu Mid-March 2019 Nanjing International www.mbechina.com
International Products Exhibition Centre, Nanjing
for Maternity & Baby
Exhibition
The 29th Beijing Late April 2019 Beijing New International www.jingzheng.com
International Pregnancy, Exhibition Center, Beijing
Babies & Children’s Expo
13CBBC Research Mother & Baby
Sector Insight 2019
Contact us for more information
China-Britain Business Council: Santander Corporate & Commercial Bank:
Jack Porteous Dennis Lin
UK Sector Lead - Retail & E-Commerce China Desk Director
T: +44 (0) 207 802 2008 T: +44 (0)75 4013 8187
E: jack.porteous@cbbc.org E: dennis.lin@santander.co.uk
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