1.8 billion out of 7 billion people worldwide are millennials, individuals aged 18-34 whose spending power is expected to reach 6 trillion USD by 2020. 72% of them shop and research for options online before making a purchase in store and 81% of them are mothers, typically in their early 20s and 30s, pursuing careers, building families and homes of their own.
Are brands or retailers really servicing this growing ‘mom’ demographic? For parents, there is a whole new arena of purchase considerations before the babies are even born. The infant formula market size in Asia alone is the largest globally and amounted to 30.35 billion USD in 2015.
This year, the global baby care market is presumed to hit 66.8 billion USD in sales. In Southeast Asian countries such as Indonesia and Thailand, sales for baby and child-specific products are expected to reach 280 million USD and 141 million USD by 2020, respectively.
Nowadays, with mothers juggling full time jobs and doing majority of the household chores, efficiency and convenience become top priorities. Where can Southeast Asian mothers look to ease their workload? Online would be a good place.
ecommerceIQ ECOMScape shows that the current online selection contains only a few players focusing on typically called the ‘mom & baby’ vertical in Southeast Asia. Why is that? Is it because a demand doesn’t exist?
The Demand for Baby Products Online
The Baby & Kids fair is held twice a year in Thailand and attracts over 500 manufacturers offering discounts up to 80%. Similarly in Indonesia, the annual Maternity and Baby-expo welcomed over 400 brands and 36,000 attendees in 2016 looking for steep discounts.
But even on sale, baby care necessities such as a car seat and stroller can rack up a bill of 800 USD, not even including the cost needed to buy an accessory to connect the two items. A marketing manager in Singapore stated that she spends approximately 600 SGD every month on her almost two year old child.
New parents in the US spend around 12,000 USD in only the first year on diapers, formula milk, toys, clothing, strollers, toiletries among other baby care products. Price comparison is vital to save on large costs and today’s young parents have a resource their parents may not have, the internet.
Alessandro Piscini, CEO of Lazada Thailand, shared that during the online marketplace’s largest sale, Lazada 12.12 campaign, one of the top three selling items in Thailand was Enfagrow, a global baby milk brand that sold over 3,700 units in three days.
And out of the top three best performing brands, two belonged to the ‘baby diapers’ category being Mamypoko and Babylove.
A quick Google search will reveal that women are discussing on popular ‘mommy’ forums such as Mom Tricks, how purchasing in bulk online can cut the cost of diapers by 20% thanks to regular campaigns and discount codes.
In Southeast Asia, 19% of consumers have already purchased diapers online and 17% have purchased baby food online. And the demand for baby products will only increase. The largest buying group is in households with children aged 0-5 and Malaysia, Laos, Cambodia and the Philippines ranked in the top 100 for highest global birth rates in 2016.
Limited Selection for Mothers Online in Southeast Asia
With high birth rates, rapid urbanization, increase in purchasing power and greater access to high speed internet, shouldn’t brands be clambering to go online to serve the mothers of the region?
Although the traditional global baby care market is very competitive, Johnson & Johnson dominates the majority of market share in Southeast Asia. These are the other leaders in their respective markets:
- Thailand: Johnson & Johnson leads with 45% market share followed by Colgate-Palmolive
- Indonesia: Megasari Makmur followed by PZ Cussons
- Singapore: Johnson & Johnson leads with 56% market share followed by Pigeon SG
- Malaysia: Johnson & Johnson leads with 60% market share
- Vietnam: Johnson & Johnson
- Philippines: Johnson & Johnson 55% market share
One of the reasons Johnson & Johnson does well is because it engages in extensive marketing activities ranging from television, print ads to offline promotional events. It launched the campaign ‘So Much More’ aimed at educating mothers on the benefits of using its products.
The Rise of Local Baby Brands
Even though there is a large selection of international brands in the region, private label products with natural or organic ingredients are seeing greater growth as they are perceived to be safer for babies.
By highlighting the organic ingredients in their products, Care, Babi Mild, Cussons Baby and D-nee-Mild have become some of Thailand’s most popular household names.
As parents become knowledgeable, they will seek new products, follow trends and read more product reviews. Rather than aggressive marketing, domestics brands can use online channels to reach out to their demographic in a personable way.
The Wailing Opportunity No One is Talking About
Ecommerce is not only about offering competitive pricing. Today, it’s about providing an online environment that can capture the attention of a browser who has three mobile notifications, one browser pop-up and two advertisements long enough to make a conversion.
It is the brand’s job to appeal to the customer.
Parents are busy. Online shopping offers extendable shopping hours and a larger product assortment.
Create an Online Strategy for a Baby-oriented Brand:
Reach your demographic through the right partner
- Choose a popular marketplace catering to your brand’s target market, an example would be female oriented Orami in Indonesia or Thailand.
- A marketplace presence should be seen as an initial short-term strategy before adopting a direct-to-consumer strategy via a brand.com site.
Be active on online forums, mom groups/blogs and social media
- Moms with young children are new to the experience of raising kids and keen to digest as much information they can before making a purchase.
- 89% of millennials trust recommendations from family and friends before making a purchase.
- Influencers or ‘mommy bloggers’ are an affordable method to gain new customers and increase brand awareness. Ex. Hi-Q milk brand in Thailand
Offer subscription commerce and/or bundle deals
- Diapers are a staple item in a young family household. This makes it attractive for subscription services like Nescafe has done for its coffee – a monthly supply gets delivered straight to your door. Brands that have already have a website such as MamyPoko are recommended to test this approach.
- As diapers are bulky and expensive to ship, brands can bundle its sale with other products with higher profit margins such as beauty products and bottles to increase online profit. Ex. diapers.com
How Are The Global Players Doing It?
Honest Company increased its value proposition through an online blog that covers eco-parenting, nutrition and wellness.
Pampers, the world’s top selling brand for baby diapers under P&G, pulled on heart strings and strengthened its own brand awareness through “A Parent is Born” – a 12-episode series chronicling one couple’s emotional journey through pregnancy.
Amazon recently launched a subscription service for toys exclusive to them. This secures a recurring stream of revenue for the company. The monthly fee guarantees a new box of educational toys to the house every month.
Whirlpool, one of the leading players of home appliances globally, released a series of programs and podcasts about parenting, women, and children health leading to over 30,000 downloads per show and mainstream media coverage. Fisher-Price toy-maker engages with parents via its ‘Share the Joy’ campaign, where consumers are offered a $5 coupon for visiting the website and given an additional $5 incentive to share a video with friends.
All of these global brands are taking big strides to capture a demographic that will always need the same products because there is never a shortage of new parents, new mothers and babies that grow too quickly. Local brands, it’s your move.