According to a study by the China Population and Family Planning Commission, China has entered a new round of population peaks since 2008. It is expected that the birth peak will last for 10 years. China's highest birth rate will appear in 2016, and the population will peak in 2028, when China will usher in the fifth baby boom. At the same time, the domestic baby boy market capacity will rapidly increase to 300 billion yuan, China's baby industry will usher in a "bull market" for about 20 years.
The huge market has spawned an emerging industry, the baby industry. This industry is designed to meet the needs of children from the mother's arms to the child's Diaper
. In the narrow sense, the baby industry can be divided into children's wear, milk powder, diaper
s and other categories. In the broad sense, the baby industry also includes related industries such as early education market and children's photography. Despite the alarming size of the market, the domestic baby industry is a chaotic industry. The specific performance is characterized by huge production capacity, numerous suppliers in the industry, complex business models, and lack of one-stop shopping terminals for channels. It can be said that this is an industry that is not mature but full of hope.
Industry pattern: "dumbbell" sunrise industry
From the perspective of the consumer environment, consumers born after the 1970s are very different from their parents in the concept of parenting. This part of the population has a higher income. They regard the education of their children as an investment; they are so strong that they are not willing to let their children lag behind other children in social competition. After the pre-consumption of related industries, such as wedding photography, consumers are easy to accept new consumption patterns (such as membership, points system, etc.); this part of the population is accustomed to online shopping, focusing on the online reputation of products or services.
From the perspective of competition, China's baby market is still in the "warring states" era, the industry concentration is not high, but the overall growth of the entire market is very fast.
In fact, the domestic baby industry is a typical “dumbbell” market: both the manufacturing end and the market demand side are large, but the middle retail channel is relatively weak. However, the current retail channels are coexisting in a variety of formats, and any channel format lacks control over the market, which restricts the further development of the industry to a certain extent.
Reluctant to be controlled by the channel, many baby manufacturers began to try e-commerce. For baby-speaking companies, getting involved in e-commerce not only helps reduce costs, but also expands new customers. Because "post-80s" and "post-90s" consumers are more accustomed to online shopping.
The baby industry was involved in e-commerce earlier, and as early as 1999, Leyou became a pioneer. Next, the baby industry is scrambling to touch the net. After being launched in 2004, the red child is very popular. In contrast, the good kids who came online in September 2010 are a bit late.
Despite having seized the opportunity of the online baby market, 70% to 80% of the products represented by Red Kids and Leyou are still concentrated on standardized fast-moving products such as diapers and milk powder. However, these category prices Transparent, gross margin is extremely low. Most of the online platform vendors are more like the online “porters” of the brand. Although they are trying to sell their goods, they have not gotten good.
In addition to the “dumbbell shape”, another distinct feature of the baby industry is that suppliers are experiencing severe polarization, either as a domestic leader or a multinational brand with strong suppliers, or as a smaller company. . Although the latter can give retailers a higher profit margin, both dealers and consumers tend to buy products from “big names”.
In the baby products market, it can be further subdivided into milk powder, diapers, baby bottles, baby food supplements, etc. These four products are mainly the world of several super manufacturers. Although the above products are highly profitable, these “super-large” users usually only give the terminal 5 to 10 points of profit margin.
With the advent of the birth peak, the market demand has suddenly heated up, and in a short period of time, the terminal of baby products is still relatively weak. In addition to the good children, Lijia Baby, Leyou and other chain enterprises have a certain scale, the field of baby products No HyperTerminal appears. As a result, small terminals do not have any bargaining power for large suppliers.
The author observes that 70% of the personally invested baby products stores can't make money because the profit model is not found, and the competition is fierce. Another important reason is that the industry lacks medium-sized suppliers. . The imbalance between super-large households and super-small households has made supermarkets in a very embarrassing state, especially in first-tier cities such as Beijing, Shanghai and Guangzhou, where terminal competition is fierce.
Future trends of channels: specialization + branding
In a market where China is a channel, who can control the sales channels, who can control the market. So, what are the channel models for the baby industry? In the future, which channel model can be in a dominant position in the market competition? At present, the channels of the domestic baby market can be roughly divided into three categories: the first category is modern access channels (mainly including large stores, mass merchandisers, supermarkets, convenience stores, etc.). The second category is the professional channel for infants and children, which can be further divided into different chains, chain customers, networks and catalogues, and physical chain stores. The third category, online baby shop (B2C).
The above three types of channel models have their own advantages and disadvantages. The advantage of the channel channel is that consumers are more convenient to purchase products, but there are two obvious shortcomings: first, the degree of specialization is poor, and second, the service is missing. Although modern channels provide so-called self-service, this actually means that there is no service. Many young couples lack parenting experience and they need businesses to provide relevant knowledge and a high level of service.
There are also two obvious shortcomings in the pure online baby shop. First, the safety issue, the safety of the products in the baby industry is extremely high. After the melamine incident, consumers trust the domestic milk powder brand. The degree has dropped to the lowest point, and the foreign milk powder brand has become the only choice for consumers. Even with foreign milk powder, consumers pay special attention to their purchase channels. Relative to the online store, consumers are more reliant on the quality of the physical store products. Therefore, the development of pure online baby-friendly stores is limited. Some well-performing B2C companies have also begun to expand offline stores to realize the “heavy” of assets. ". Second, the experience factor is not enough. Although some brands (such as Pampers) use 3D technology to launch online experience activities, the virtual environment can not be compared to the offline experience. Experience marketing is an important means for baby-child enterprises to break the market competition and achieve differentiated marketing. Therefore, the future B2C enterprises in the baby industry will adopt the “online + offline” channel model.
Compared with these two types of pure online channels, the more promising channel model is the professional channel for baby boys, which can be divided into five categories:
The first category is the integrated chain. This type of baby sales platform has both an online platform and a physical store. The two complement each other and promote each other. The representative companies are Leyou, Baby Friendly and so on. The products sold by Leyou include milk powder, paper anti-urine products, food, feeding supplies, toiletries, electrical appliances, toys, books and audio and sports, lathe chairs, baby underwear, baby outfits, baby accessories, maternity clothes, Children's socks, children's shoes, children's hats, scarf gloves, bedding and other 16 categories, more than 30,000 kinds of single items.
The second category, pure offline chain. All chain stores signed a brand agreement with the manufacturer, and the franchisees kept the same in terms of products, management methods, terminal brand image and store design. For example, Lai Ying Fang focuses on the professional production, production, retail and wholesale of baby clothes and supplies. The steady growth of Liyingfang is mainly attributed to the four major advantages accumulated in the long-term, namely vertical integration of production and sales, multi-brand strategy (independent brands and imported brands), strong channel network, and “Golden Elephant Membership” plan to enhance customer loyalty.
The third category, "network + directory" business. The typical representative is the red child. The success of Red Kids is precisely because of its lack of a “one-stop” shopping platform for the baby industry. For example, to buy milk powder to go to the supermarket, to buy clothes to go to the clothing store. And young parents don't actually have that much time. Chinese mothers have the habit of confinement. During this period, they do not go out. They have to go to work after the month, which leads them to have no time to shop. Therefore, the red child adopted the "catalog + network" mode, successfully solved the problems of convenience, trust, price and so on.
The fourth category, the baby single store. Typical enterprises such as Garbo have infants. The advantage of this format is that it is highly specialized and distributed in large communities, and consumers are more convenient to shop.
The fifth category, the “1+N” model created by Dr. Frog, in which “1” refers to a self-owned brand and “N” stands for brand authorization. At present, the model of Dr. Frog is not ideal. The specific performance is as follows: The independent brand of Dr. Frog is not influential, and the brand authorization is not good enough. In fact, the essence of the Boshi frog business model is to be a brand management company, which is not uncommon in the apparel industry. Companies such as ZARA and Metersbonwe use this model. With the 1+N model, the market has higher requirements for its brand influence. In addition, franchisees are also an unstable factor. once the performance is not good, the entire channel faces great problems.
At present, the main sales revenue of Boshi frog comes from department store counters, which also has great limitations. Because the counters of department stores have certain promotion effects on the brand, if they can not bring actual sales, the sales volume is only The wood of this. After all, the radiation power of department stores is limited, and the specialty stores are the development trend of the baby industry.
At present, there are only specialty stores such as baby carriages, children's books, toys, baby food, children's furniture, etc., and the professional chain stores for baby boys are still in new business. The author believes that with the popularity of private cars, this new type of business with the "precision segmentation of target consumer groups" will surely become a popular professional shopping place like Watsons and Metro.
online and offline integration has become the trend of the times
For the baby industry, e-commerce has become the consensus of many companies, but there is still much controversy in the specific strategy. Is that a vertical website or a platform?
In recent years, with the rise of Dangdang, Jingdong Mall and other e-commerce platforms, the e-commerce sector has created a trend of department store and platform. And as the baby products market becomes a new “gold rush” industry, will there be a big e-commerce platform with manufacturers?
When the baby-child enterprises have touched the net, will the “three-in-one” model formed by the physical stores, online and catalog sales of baby-child enterprises be adjusted?
In fact, whether to adopt the platform model depends mainly on two aspects: First, it is related to industry characteristics. Second, it is related to the state of resource resources and quality control.
Some baby and child e-commerce companies believe that the more types of goods, the better, but the baby industry may not be. If the open platform introduces some collaborators who are not strict with the products, there will be a situation in which the eyes are mixed. Baby products are a special industry that is related to the healthy growth of children. Therefore, the baby products industry should emphasize the focus, and businesses must sell products that consumers can rest assured. Therefore, the baby industry must adopt the “online + offline” channel model.
In this context, companies such as the baby industry must think twice before deciding whether or not to conduct e-commerce. In fact, the key to e-commerce development is to clarify the issue of the distribution of benefits for online and offline channel members. If the interests of online and offline channel members conflict, it should be called to stop or re-adjust the relationship between the two parties. In fact, for some baby-child enterprises, it is a good choice to do a solid offline channel. For example, the domestic baby chain brand Lijia Baby mainly expands the offline store, and still has achieved good results, which is called the “cement pie” of the baby industry.
Open up the industrial chain and expand the profit area
As the competition in the baby industry becomes increasingly fierce, industry profits continue to decrease. Baby manufacturers can expand their profit areas to surrounding industries on the basis of doing a good job and building a brand. The surrounding areas of the baby industry mainly include children's photography, parent-child education, parent education, and infant and child services. Although the above projects have developed relatively mature enterprises, and after years of efforts and fierce competition, the market awareness and consumer acceptance have reached a relatively mature level, but the development, management and marketing of enterprises The management level is still at a lower level, which makes the recognition of consumers and the current market situation are not equal. That is to say, consumers have needs, but there is no suitable consumption place and products. This provides new opportunities and entry points for baby manufacturers. Some companies have already taken action in this regard.
While doing product line planning and offline store construction, Lijia Baby also extends the product chain and expands the product profit area. For example, Lijia Baby has set up dumping and baby swimming in its store so that mothers and babies who come to shop can shop in a happy experience. In addition, since 2009, Lijia Baby began to build the Lijia Baby Children's Photography and Lijia “Huitong 121” parent-child center. Today, Lijia Baby's comprehensive baby business platform is gradually taking shape. The model seems complicated, but the core lies in “finding and meeting the needs of consumers” and using “brand potential energy”. In other words, when consumers like and trust the baby products of Lijia Baby, they will easily accept other peripheral products or services of Lijia Baby.
Red Kids has grown rapidly from the “newborn” in the catalogue sales field to the absolute leader in the catalogue market for baby products. The sales of famous baby products and milk powders such as Pampers, Wyeth, Abbott and Dumex in the Red Kids channel have accounted for more than 30% of their total sales. Red Kids has attracted more than 600,000 active members through the product catalog and the Internet, and has already extended the product line from the beginning of the baby products to the cosmetics, home, health and gifts, and began to truly transform into a home directory supply. Business.
After-sales service becomes the focus
At present, from the perspective of the entire baby industry, heavy sales, heavy channels, and contempt for services have become common problems in the entire industry.
At the same time, the family's demand for baby products and services is limited to several years, which is conducive to service marketing and brand premium.
For baby stores, how to improve service quality and increase customer stickiness? First of all, the baby-child enterprise or storefront can adopt the membership system and analyze the member data to provide more comprehensive and meticulous service. In this regard, the good boy's approach is worth learning. Consumers can not only experience their professional after-sales service when they are shopping for good children, but also receive professional consultation and counseling provided by more than 800 childcare experts from “Good Kids Parenting Network” to obtain knowledge of baby products and pregnant women. Parenting experience, etc. Second, the interaction between consumers, consumers and vendors should be enhanced. Baby-to-child businesses can build online communities and increase interaction. The community of red children is the country