E-retailers of maternal & baby products to cater to consumer demand
Last Updated: 2016-12-13 12:42 |
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By Shen Hui

"China will enter the high-speed growth period of parent-child product consumption within 5 years, and the market scale of the pregnant, infant and child products in 2018 is expected to break RMB 3 trillion yuan." Such prediction made by Analysys pointed out the root cause of prosperous e-commerce development of maternal & baby products.

However, through several rounds of shuffling cards during the cold capital winter, the e-commerce of maternal & infant products that developed vigorously once greatly sapped. In this August,, the subordinate brand of Lamabang and the special offer e-commerce platform was closed; Mitao, the outstanding cross-border e-commerce platform, has also depressed not long ago for the unbalance of capital turnover after the major measures, such as overstocking, market promotion and advertisement by money.

Embracing new development inflection point

The e-commerce of maternal & infant products may embrace a new development inflection point after passing through the startup and cold capital winter. Zhang Lianglun, the founder and CEO of "Many people think that the e-commerce development at the preliminary stage of maternal & infant products benefits from the overall opening of two-child policy; however, I think it mainly benefits from the transfer from PC to mobile terminal, but this bonus is disappearing obviously in the past two years, especially this year. The cost for e-commerce to get a user is twice of that in 2015, 5 times of that in 2014."

Jiang Haotian, the managing director of Northern Light Venture Capital agreed with that opinion. "The bonus of mobile network has disappeared, the flow cost is increasing rapidly, and the online acquisition cost continuously increases, which is the common issue that the e-commerce industry of maternal & infant products suffers from." Jiang Haotian believed that the cold capital winter would continue one year at least.

The "survivors" of the cold winter are still in severe condition. "Although the consumption frequency of e-commerce of maternal & infant products, it has problems, such as too low gross profit, short period and large retaining difficulty." Zhang Lianglun said that the rise of mobile internet promotes the rapid rise of e-commerce of maternal & infant products started with cross border transaction and reference product. However, the typical price sensitive products, such as milk powder and paper diapers, feature transparent price and low user stickiness, resulted in various problems, like short consumption period.

"The industry structure of e-commerce of maternal & infant materials has been initially determined and the competition has stepped into the 'second half'. Under the background of cold capital winter, the people start to pay attention to the real product value and user value," said Zhang Lianglun

"Mom economy" becoming new "battleground"

However, the opportunity coexists with danger Following the C+ round of financing that current capital mainly invested on completed at the end of the year, published in June that it had completed D round of financing with USD 100 million, and BabyTree, a child rearing community platform also published that it has acquired a financing fund of RMB 3 billion yuan in July.

In the cold capital winter, the optimistic look is absolutely in relation with the profitable two-child policy. The good prospect of maternal & infant products market is also a more critical factor. According to the related data in 2015, the maternal & infant product industry of China also has large increasing space based on the market share of maternal & infant products in Mainland China having broken through RMB 2 trillion yuan.

Furthermore, the mom group with exuberant consumption ability and consumption decision ability will become the largest "backer patron" for e-commerce of maternal & infant products.

According to a study by Nielsen, women have become the main force of online shopping population, of which, the mom group has a proportion above 65 percent, and their total amount of consumption is 1.4 times of that of the total online shopping crowd. In addition to the infant milk powder and diapers, the single cosmetics consumption amount of mom group is RMB 706 yuan and that of the general online shopping crowed is RMB 615 yuan only; the single purchase amount of health care products of mom group is RMB 1,048 yuan, and that of the general online shopping crowed is RMB 836 yuan.

"Mom economy is going to be the new focus of e-commerce of maternal & infant products, which will also bring new chance for the burst of online shopping on mobile terminal," said Ding Xia, the vice president of Nielsen.

Product quality being critical factor

To expand the market, the e-commerce enterprises of maternal & infant products shall attach importance to the product quality. "The generation born around 1985 is the first core generation of China's e-commerce, while the generations after 1990 and 1995 have stronger purchase ability, both of the groups are promoting the 'consumption upgrading' in China, but they are quite different in consumption aspect." Jiang Haotian believed that people after 1980 pay more attention to health other than luxury, while people after 1990 pay more attention to interest and trend. The upgrading of e-commerce of maternal & baby products shall consider the value concept and individuality requirements of the consumer in the future.

No matter how the consumption trend changes, the pursuit of consumer on product quality never changed. "In maternal & infant products industry, the product quality is the priority among priorities as the product quality is in relation with the physical and psychological health, as well as the social harmony and stability." Miao Yuchen, the director of General Administration of Quality Supervision, Inspection and Quarantine of the People's Republic of China, said that with the economic development, people are no longer satisfied with the simple basic products, therefore, the e-commerce enterprises of maternal & infant products shall endeavor to provide higher quality and safer products to share a space in the market competition.

In Zhang Lianglun's opinion, many consumers in the past thought that it was enough if the price was low, but now, people even in second-, third- and fourth-tier cities have started to pay attention to the quality and cost performance. From the analysis on the consumption habit of mom consumption group, we can see that shopping has been one way of their entertainment: the user may browse and directly purchase goods they want on Taobao or other APP when they are on a bus or subway, the unconscious browse behavior has become a trend. "No matter how the shopping experience change, the core pursuit on product quality and safety will always be consistent, and the salable product guarantee will always be their important focus".

Where will the e-commerce of maternal & infant products head in the future? Experts indicate that the e-commerce market of maternal & infant products shall go back to the essence, pay close attention on the construction of supply chain and service chain, construct the core competitiveness by finding the actual demand of user and focusing on quality and marketing to lower costs and improve efficiency and provide high cost performance goods and services.

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