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Three Startup Opportunities In China’s Booming Maternity Market

By Emma Lee

Being a new mom can be incredibly stressful. If you are drowned by daily chores and still can’t conceive of popping out to the shops for groceries, you are not alone, at least not in China.

As the world’s largest country in terms of population, China records more than 16 million newborn babies per year. The sheer size of this new population is makes China the world’s second largest consumer market for babies and children goods after the United States, according to China E-commerce Research Center.

The burgeoning sector has even received a boost from the policy level. In recent years, Beijing has been relaxing family planning policies, such as the well-known ‘one child’ policy, due to concerns over a aging society and slowing economy. Since November 2013, young coupes can have two children if one of the parents is an only child.

Although lots of eligible couples, especially those live in urban areas, are unwilling to have a second child due to financial and other pressures, the effect of this policy is still great. After its implementation, the country is expected to witness another baby boom with the numbers of newborns reaching 20 million by 2018, citing data by Huatai Securities. China E-commerce Research Center predicted that the market is going to worth 100 billion to 200 billion RMB by 2015.

Notably, the sector is filled with young, tech-savvy customers with new spending powers. As the first group that experienced China’s economic and digital boom, the post-80s and post-90s gen are existing online customers and have more disposable income than previous generations. When becoming parents, they are willing spend big bucks on babies, so the market is characterized by a higher price-per order than their predecessors. On the other hand they are also more rational buyers who pay more attention to product quality.

The maturing sector has attracted a slew of entrepreneurs. Here are three hottest baby and maternity-related verticals we can expect to see.

E-commerce

Infant care e-commerce is currently one of the red-hot verticals amid China’s e-commerce boom, and its rise is fueled by the growth of another emerging vertical: cross-border e-commerce.

Contaminated formula, counterfeit dippers and product safety concerns has spurred has triggered a demand from Chinese parents for imported baby products. The trend has attracted some significant investments for relevant sites. In the first nine months of 2015, the infant and mother care industry recorded over 60 funding cases with a total investment of 1.3 billion USD.

Infant care online retailer Mia, a leader in the cross-border e-commerce sector, received a 150 million USD series D funding last year. Their competitor Beibei raised a $100 million USD series C funding at a valuation of nearly $1 billion USD. Jumei, the Chinese cosmetic retailer, also shifted into infant care sector by joining a 300 million USD round for BabyTree, an online community for early care and education.

Despite hefty capital injections, the infant product retailors still have a long way to go when compared to China’s e-commerce giants. Alibaba’s e-commerce market place Tmall, JD and Suning’s Redbaby took the top three spots, accounting for 46.9%, 22.8% and 5.6% of China’s B2C maternity product market in Q2 2015, according to report from Analysys.

The research institute pointed out that China’s turnover of maternity products was at 28.52 million RMB in Q2 2015, of which e-commerce only represents 10%.

Hardware

As the hardware hub of the world, China loves to indulge in weird gadgets, and the smart devices for mothers-to-be and babies may sound even weirder for most of us. The good news is that most of the products stem from the demands of entrepreneurs who are parents themselves, so they should be solving some real problems for you.

Prenatal care is very important to help make sure that the mom and baby are as healthy as possible. Visiting clinics is an indispensible part of the whole pregnancy, but it could be a really hassle if you go there every time for small concerns.

There’s a group of smart hardware helping you ease these worries. A fetal ultrasound tracker is what I considered to be the most useful device as an expecting mom myself. One leader in the sector is iCareNewlife. Other products focused on mothers-to-be include smart fetal movement tracking wristbands like Lisa and B-smart.

Smart gadgets for babies are more diversified, range from milk formula mixers (ingmeng, NicePapa), smart dipper change buckles (Smart PeePee, Bangbeiyi) and smart thermometers (iThermonitor, Baohuquan).

Most of the products have launched their crowdfunding campaigns to gain supports from Chinese backers who prefer price and deals, not only as a means to get funding but also for marketing.

It is interesting to note that a large number of these smart devices are developed by geek fathers, and hence a great portion of the users are new dads.

On-Demand & O2O

The O2O industry is in full swing in China, and maternity is no exception. As the traditional custom of women “sitting out for a month” after giving birth prevails in China, the demand for O2O postpartum services is huge. New mums can order on-demand services including maternity matrons, milk encouragement massagers, dietitians, postpartum fitness trainers and early care and education professionals, among others.

But the market is still untapped because it is difficult for a third-party platform to standardize and control the quality of these services. Major players in the field are O2O fitness training service HotSlim, infant caring service Youfumama.

Source:: Three Startup Opportunities In China’s Booming Maternity Market

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