Anticipated Baby Boom in China to Affect Baby Care Market

Rob Walker, a contributing analyst with Euromonitor International, wrote a blog post called “The Beauty Implications of a Chinese Baby Boom,” detailing how the Chinese baby market is taking off—and what that means for the beauty industry on a global scale.

Walker writes, “The value of China’s baby and child-specific category has doubled over the last five years to around $1.6 billion, making it the third biggest in the world after the U.S. and Brazil. Spending could be about to grow much faster, however, as a result of a partial relaxation of family planning laws. Furthermore, the country’s gender imbalance could start to stabilize, triggering potentially huge increases in sales of women’s makeup, hair care and fragrances over the long term.

“The nub of the amendment is that couples living in urban areas are now permitted to have two children if one of the parents is an only child. Previously, both parents had to be single children to qualify. It affects upwards of 100 million women of child-bearing age (18–44) and could lead to between 10–30 million additional babies over the next five years. The final number will depend not only on the desire of parents to have a second child but also on state bureaucracy, the latter because couples will still have to apply for permission for a second child. Overall, the potential upside is highly promising.

“China’s one-child policy (or in rural areas a two-child policy if the first born is a girl) has been in place for three decades. It was introduced so that population growth would not derail future economic power, but China’s working age population has become so squeezed that an aging population is now a much bigger economic threat.

“The dependency ratio—which compares the potential workforce with the population of children and retirees—rose in 2012 for the first time in 40 years. On current trends, the number of people over 65 will reach 222 million by 2020, compared with 93 million in 2000. The pressures on pensions and state healthcare are growing by the year.

This piece is an excerpt from GCI magazine, Cosmetics & Toiletries' sister publication for beauty business and marketing. Read the full report.


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