By Lynn Yu

As China embraces its three- child policy， Chinas maternity and kids market can expect a boom. In the past two years， Chinas maternity and kids FMCG market has continued to grow. According to the 2021 White Paper of Maternal and Child Industry published by Ocean Engine， with a compound annual growth of 5.6%， the total trading volume of maternity and kids market reached RMB 15.6 billion in recent 12 months， an increase of about RMB 800 million from the same period last year.

The registration number of enterprises in the maternity and kids market reaches peak of past two years

According to Qichacha， as we review the development of enterprises related to maternity and kids in the past ten years， a huge amount of such enterpriseswere registered in the years 2019 and 2020. The number of companies registered exceeded 0.65 million， an increase of 236.1% year-on-year. In 2020， thisnumber reached 963，000， a growth of 47.7% year-on-year.

At present， there are 2.365 million enterprises focusing on goods， services， and nursing related to mothers and kids. In the first five months of 2021， the number of registered enterprises related to mothers and kids in China was 528，000， an increase of 110.4% year-on-year. In terms of monthly registration， March and April are the months with the largest number of registrations， with 143，000 related enterprises registered. From the current trend， the number of registered enterprises related to mother and child is expected to exceed one million in 2021.

Shandong， Zhejiang and Shaanxi provinces rank the top three， with 78% of enterprises with registered capital less than 1 million. From the perspective of geographical distribution， data from Qichacha shows that at present， the maternity and kids enterprises in operation and existence in China are mainly distributed in Shaanxi， Zhejiang， Shandong and other provinces. Among them， Shaanxi Province has the largest number of maternity and kids related enterprises， with a total of 333，000； Zhejiang ranks second with a total of 266，000 enterprises； Shandong ranks third with 242，000 enterprises. In addition， Fujian， Guangdong， Guizhou， Jiangsu and other places rank among the top ten in terms of the number of maternity and kids related enterprises.

From the perspective of urban distribution， Qichacha data shows that Xian is the city with the largest number of maternity and kids related enterprises in China， with 304，000 enterprises far ahead； followed by Guiyang City， there are currently 164，000； Jinhua City ranks third， with a total of 126，000 at present. In addition， Sanming City， Shenzhen City and Chengdu City also rank in the forefront in the number of enterprises related to mother and child.

According to the distribution of registered capital， according to Qichacha， 78% of enterprises related to maternity and kids in China have registered capital of less than 1 million， and 18% have registered capital of between 1 million and 5 million， and the enterprises with registered capital of more than 5 million are the least， accounting for 4%.

Maternity and kids e-commerce market grows steadily

With an increase inthe number of newborns and the improvement of household consumption capacity， the scale of Chinas maternity and kids market is growing steadily. More and more women born in the 1980s and 1990s join the ranks of mothers， and the penetration rate of maternity and kids e-commerce users is steadily increasing， with the future looking bright for this industry. On the one hand， parents born in the 1980s and 1990s are more advanced in their consumption， and are more likely to take on more modern concepts of parenting， which brings more diversified development opportunities to the maternity and kids market， meaning that innovative categories are expected to grow. On the other hand， with the upgrading of consumption and the continuous improvement of peoples living standards， parents demand for the quality of maternity and kids products is also increasing， and the specialized and highend market will see sustained growth.

According to DATA.100EC.CN， from 2011 to 2019， the scale of maternity and kids e-commerce transactions in China continued to grow. In 2020， the transaction scale exceeded the trillion RMB mark and reached RMB 1，000.05 billion， up 9.79% year-on-year. It is predicted that thesize of the maternity and kids markets e-commerce in 2021 will reach RMB 1.1 trillion.

At present， the main players in the maternity and kids e-commerce market are as followed. Comprehensive ones： Pinduoduo， JD.COM， Taobao， Tmall， Vipshop， etc.； vertical ones： Beibei， Mia， Redbaby， Baobeigezi， GoodBaby， etc. Community ones： Babytree， Lamabang， Qinbaobao， MMbang， Nicomama and so on. In 2020， there were two unicorns， namely Beibei Group （USD 1.5 billion） and Mia （USD 1.1 billion）， with a total valuation of USD 2.6 billion. At the same time， the two maternity and kids e-commerce enterprises are in Beijing and Hangzhou， which are first-and second-tier cities.

According to DATA.100EC.CN， the per capita annual consumption of maternity and kids e-commerce was RMB 4，081.83 in 2020， and it is estimated that the per capita annual consumption of maternity and kids e-commerce will reach RMB 4，400 in 2021.

According to DATA.100EC.CN， the penetration rate of maternity and kidse-commerce in China was27.5% in 2020， and it is estimated that the penetration rate of maternity and kids e-commerce will be 28.7% in 2021. From 2012 to 2014， the penetration rate of maternity and kidse-commerce exceeded 10%， and the scale of users increased rapidly from 10.99% to 27.5% from 2014 to 2021. It shows that increasing numbers of mothers are more willing to choose online consumption. The total valuation of the two unicorns is USD 2.6 billion， and Beibei Group ranks first.

Security becomes an important consideration

The Report on maternity and Child Consumption Behavior in Chinas Sinking Market in 2021 points out that the new generation of parents pays closer attention to product quality and is willing to give their children the best. Security has become an important consideration.

Compared with the same period in 2020， the overall performance of Tmall Internationals imported baby food from March to May in 2021 was not as good as before， and the market awareness of “import = good” was gradually diluted by younger generations of maternity and kids consumers. Repeated outbreaks abroad bring both opportunities and challenges to the imported maternal-and-child food market.

According to the statistics of Tmall International， the online maternity and kids market of Tmall International has performed steadily since 2020. Affected by the promotion season， the maternity and kids market ushered in sales peaks in March， June and November. Nursing care products， such as those for baby skin care and maternity care， are featured with large scale and steady growth， while milk powder complementary foods， such as infant liquid milk， special formula milk powder and infant condiments， have attracted much attention due to their multi-ratio， health and organic characteristics.

Affected by milk sources， places of origin and standards， consumers still trust imported baby dairy products， but the incremental market of supplementary food for babies is concentrated on Tmall（non-international） platform. As a highspeed expansion track， supplementary food for babies has attracted more and more brands to enter. Baby care， as the star category of Tmall Internationals maternal and child products， has the characteristics of large market demand and high growth rate. People in the industry believe that future brands can start from subdividing the track to create star products， such as baby sun protection， childrens emulsion cream and so on.

In the first quarter of 2021， in Tik Tok， the content of milk powder received the highest attention， followed by chil- drens toys and nutritional supplements. The growth rate of childrens wear， diapers and wet wipes， and nutritional supplements ranked the top three， indicating that parents are more concerned and interested in video contents about childrens eating， wearing， and using.

As for baby diapers， apart from comfort， parents born in the 1990s pay more attention to appearance. Manufacturers regard appearance as one of the selling points of diapers through IP cooperation. In 2018-2019， the sales of IP authorized products in Tmalls maternal and child industry increased， including milk powder， complementary food， nutrition and snacks， which increased by 230%. Sales of products for babies， including diapers， increased by 47%.

Foreign brands actively expand their product lines to sink the market. Laxman Narasimhan， CEO of Reckitt Benckiser， believes that the potential of Chinas low-end market in the future is regarded as a boost. In order to seize the third and fifth tier markets in China， Reckitt Benckiser will adopt a series of innovative models. Thierry Philardeau， global head of Nestles nutrition strategy business， said that he would sink into the western China market and the third and fourth tier markets， and planned to enter 10，000 maternity and kids stores in the next 18 months.

In addition， research shows that the market of early education and educational toys shows great potential， with the number of commodities and the average price of commodities rising continuously， which is far faster than the whole toy category， and products see innovation and upgrades. It is a brand opportunity to dig deep into the educational training of children in different scenes.

In the first quarter of 2021， statistics from TikTok show that among videos containing various keywords of mother and child， the videos of kindergarten， early education and childrens songs have the highest broadcast volume， and the videos containing educational toys and Lego related keywords also rank in the forefront， which shows that everyone has a high demand for childrens content in intellectual development and logical thinking exercise， and early education and parent-child content are highly valued.