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China’s Reproductive System is a Boon for Baby Care Products

China’s productive population is giving birth to approximately 17 million babies annually and this, backed by rapid urbanization as well as fast rising personal income are contributing to the strong sales performance of baby care products in the country. The GfK baby care panel showed that the market across ten key Chinese cities tracked , including Shanghai, Beijing, and Guangzhou etc., reached over USD425 million in total value in 2011, having expanded 16 percent over the previous year, and is expected to grow even further in 2012.

The global leading market research company commenced retail audit tracking of baby care products covering clothing, feeding and hygiene tools, safety equipment, transportation, furniture, and toys in China in 2010. Findings in the last two years revealed that registered online and offline sales have grown significantly as more consumers are increasingly turning to the Internet as a platform to purchase such products.

While total Internet sales accounted for only around 7 percent of the total market value in 2010, penetration rate escalated to 10 percent the following year. This figure is likely to deepen in 2012 with GfK foreseeing earnings derived from online retailers to make up over 14 percent of the overall baby care market worth.

“It is interesting to highlight the difference in buying behavior across various regions tracked by GfK,” commented Mr. Walter Leung, managing director of GfK Hong Kong. “The online buying phenomenon for baby care products is definitely more apparent in China compared to the European countries of Germany and France where consumers still prefer to make their purchases at brick and mortar stores.”

According to GfK, the online market is growing at a faster rate than the offline market due largely to its lower pricings. For instance, the price of a baby bottles sold online averages at USD7.10, which prove more attractive than those retailing at departmental stores and baby care specialists which averaged at USD10 and USD7.90.

“Physical retail stores in the baby care market are facing intensifying competition from increasing number of Internet retailers who have started selling baby care products,” observed Mr. Leung. “To compete effectively with the offline market, it is important for online retailers to keep enhancing the other aspects of sales, such as it’s after sales service, delivery time, etc.

“The market in China is expected to do very well in 2012, thanks to the baby boom experienced in the very popular year of the Dragon,” said Mr. Leung. “GfK predicts the fast growing market to close the year on a high, with at least 20 percent growth achieved in total sales earnings over last year for both online and offline retailers.”

GfK’s baby care panel is currently available in various European countries, including Belgium, Germany, Great Britain, France, and Netherlands, with Italy, Poland, Portugal, Russia and Spain starting in 2013. Other Asia Pacific countries researching baby products are Taiwan, Australia, Hong Kong, Malaysia, Singapore, and Thailand.

About GfK

GfK is one of the world’s largest research companies, with more than 12,000 experts working to discover new insights into the way people live, think and shop, in over 100 markets, every day. GfK is constantly innovating and using the latest technologies and the smartest methodologies to give its clients the clearest understanding of the most important people in the world: their customers. In 2011, GfK’s sales amounted to €1.37 billion.

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Note: GfK’s baby panel in China covers Shanghai, Beijing, Guangzhou, Chengdu, Wuhan, Shenyang, Foshan, Jinhua, Deyang, and Tangshan.

Source: Gfk