According to the market research group’s contributing analyst Rob Walker, opportunities are likely to arise in two main areas - the baby and children’s category.
The reason for these two changes?Walkerbelieves that a partial relaxation of the country’s family planning laws is likely to lead to a bigger consumer base, while there are also signs that the country’s gender imbalance is set to stablise, prompting demand for beauty products targeted at females.
The amendment of the country’s family planning laws centres on the fact that couples living in urban areas are now being allowed to have two children, as opposed to just one.
An additional 10 to 30 million babies...
Euromonitor believes that this new rule could lead to an additional 10 to 30 million babies being born over the next five years, many of them to family’s with middle class incomes, suggesting significant spending potential in the category.
The family planning laws were introduced 30 years ago as a means of controlling run away population growth, but now the country is being faced with a dearth of adults of working age, lawmakers are being forced to update the rules.
“A change in the law, no matter how small, is a big deal for any company with a footprint inChina’s baby and children’s consumer base. Indeed, shares of publicly listed companies making anything from diapers to pianos have jumped in recent weeks,” stated Walker in his analyst insight.
Euromonitor believes that the player to benefit from the subsequent boost to the child-specific and baby care market inChinawill be Johnson & Johnson, which already captures around 30% of the market.
International and local players set to benefit
Likewise, a number of local players are also likely to benefit, including Prince Frog International, which is the owner of one of the category’s fastest growing skin care brands, Prince Frog.
Walkerultimately points out that fact that, even without taking into consideration the relaxing of the family planning laws, the country has already been forecasted to become the biggest countries in the world for baby and child-specific products by 2018.
With the added benefit of the new family planning regulations and the subsequent baby boom,Walkersays that the country could well become the biggest global market for those categories by 2015.