The War on Baby Skincare Category

China's baby care market size is expected to approach 50 billion yuan in 2026, with the market size of the baby skincare category expected to reach 18 billion yuan.

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Following the mosquito repellent, maternal and child nursing (MCN) brand Runben Bio filed a prospectus with the Shanghai Stock Exchange (SSE) in May this year, recently, the Fujian Blue-Touch also filed its first IPO application with the U.S. Securities and Exchange Commission (SEC), intending to enter the U.S. stock market.

Together with the listing of the parent company of Baby Elephant, CHICMAX Group will enter Hong Kong Stock Exchange. This year, China's baby care market is vigorous.

Chinese maternal and child companies enter the U.S. stock market

Public information shows that Blue-Touch was founded in 2014, the company is mainly engaged in the production, research and development, and sales of baby skin care products, washing and care, and cleaning products. Its product portfolio contains two major categories, namely baby skincare and washing, and household cleaning products.

According to the disclosed prospectus, in the two fiscal years 2020 and 2021, the revenue of Blue-Touch was $3,096,900 and $6,655,500, respectively, with a growth rate of 114.9%. The net profit for the corresponding years was $49,000 and $775,500, respectively, with a growth rate of 1468.7%. For the fiscal year ending December 31, 2021, Blue-Touch’s baby skincare and washing products accounted for 49.47% of total revenues.

Prior to the IPO application submitted by Blue-Touch, in May this year, another MCN brand, Runben Biotechnology filed a prospectus for a planned listing on the main board of the SSE, with the intention of raising 903 million yuan.

In addition, the parent company of Baby Elephant, CHICMAX Group, also recently made an IPO application, once again sprinting for a Hong Kong stock listing.

In contrast, the Baby Elephant has overall the largest scale of volume, more than Blue-Touch and Runben bio. According to the prospectus, Baby Elephant's retail sales in 2021 exceeded 1.8 billion yuan, ranking first among Chinese MCN brands, with a revenue of 871 million yuan that year. In the first half of 2022, among several major brands of CHICMAX Group, the Baby Elephant contributed 24.2% of revenue, second only to KANS's 47.8%.

It is known that the core products of Runben Bio include mosquito repellent, baby care, and essential oils three categories, its baby care products sales revenue accounted for a year-on-year increase, mainly due to the increase in uncontrollable factors in the mosquito repellent business. The company has been transforming with the trend, constantly launching hot products for infants and children, and actively expanding online sales channels such as TikTok China, etc. During the reporting period, more than 70% of the revenue of Runben Bio came from online.

China's baby market is on the rise

Although the birth rate of newborns in China has been on a downward trend in recent years, the baby care market has been seen as a blue ocean by the industry due to the large base of this group. According to Euromonitor, the market size of China's baby care market is expected to approach 50 billion yuan in 2026, with the market size of the baby skincare category expected to reach 18 billion yuan, with a bright future.

Compared with adult brands, Chinese baby brands started late and have a short history of development, and the share of Chinese brands in the mid to high-end market has been at a disadvantage in the past. However, with the continuous increase in investment in research and development, marketing, and other aspects of the brand in recent years, the share of local products is also increasing, especially in Tmall, TikTok China, and other e-commerce platforms. Chinese brands and international brands are standing up to each other as an equal.

According to MMI, on the Tmall baby skincare brand sales list from July 2021 to June 2022, Dexter, Baby Elephant, Somda, and other national brands are among the top, with Dexter leading the way with sales of 374 million yuan, accounting for 7.8% of sales. The second-ranked U.S. brand Aveeno sales of 350 million yuan, accounting for 7.3%, while Baby Elephant and Somda sales of 315 million yuan and 235 million yuan, respectively.

In addition to the established brands focused on the baby section, in the past two years, including the CHICMAX Group, Xunhuiji, and many other Chinese brand companies have also launched new baby product lines. Among them, the CHICMAX Group in 2015 after the successful creation of the Baby Elephant, in this year launched a new baby skincare brand "Newpage". According to the official website, Newpage was co-founded by pediatrician Cui Yutao and scientist Huang Hu, aiming to create a natural and pure, safe, and effective baby skincare brand.

The reason why the baby care market is favored by the industry and can continue to attract brands to enter the market depends on the official policy support and the current shift in consumer awareness.

On the one hand, the policy continues to be standardized. In January of this year, the National Medical Products Administration officially released the Children's Cosmetics Supervision and Administration Regulations, which cover many aspects including the definition of children's cosmetics, labeling requirements, and formulation principles, further strengthening the supervision and management of children's cosmetics, raising the barriers to product entry, and also further regulating the market, releasing the advantages of head companies.

On the other hand, is the shift in consumer awareness and preference. Due to the sensitivity of the baby group, baby care products have always received a high degree of attention from the market, the current generation Z parents' consumer ability is increasing, the concept of scientific parenting is significantly enhanced, and higher requirements for product quality, efficacy, and service are put forward. With the refinement of consumer demand and the strengthening of the concept of product capability, it is expected to further promote the innovation and iteration of brand products and push forward the upgrading trend of China's baby consumption market.

In addition, according to the data of iiMedia, Chinese consumers tend to obtain product information through social platforms such as Xiaohongshu, WeChat, and Weibo. 77% of the MCN flock said they are happy to share goodies on social platforms, and up to 81% of the flock prefer to buy baby products through online channels. The development of e-commerce platforms will undoubtedly inject more possibilities for the development of the baby care market.