Chinese baby companies have problems – level 3
Chinese companies that produce children’s products are diversifying their offerings to include adult and pet clothing, as the country faces a record-low birth rate that is expected to continue declining.
The demographic decline can be traced back to China’s one-child policy, which lasted from 1980 to 2015. While the limit has been raised to three children in 2021, couples are still reluctant to have babies.
Yan Zhang, founder and CEO of Shanghai children’s clothing brand NATUNAKIDS, said the company’s sales have not been significantly impacted by the low birth rate yet but he expects sales to decrease over the next three to five years. The shift in the industry has left some consumers worried about their favorite brands going bankrupt. Market analyst Shaun Rein warns that companies in the baby industry will face declining margins, bad revenues, and falling stock prices.
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What measures are companies taking to diversify their offerings and remain profitable in China's low birth rate environment?
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