Some 17 million babies are born annually in China – a huge market for the baby products sector.

And rapid urbanisation, together with fast rising personal incomes, are contributing to strong sales growth in baby care products.

A study by GfK tracked the market across 10 key Chinese cities, including Shanghai, Beijing, and Guangzhou. It found sales reached over US$425 million in value in 2011, up 16 per cent on the previous year.

GfK found that online sales grew significantly. While total Internet sales accounted for only seven per cent of the total market value in 2010, it escalated to 10 per cent in 2011. GfK predicts more than 14 per cent of the overall baby care market will be online this year.

“The online buying phenomenon for baby care products is definitely more apparent in China compared to the European countries of Germany and France where consumers still prefer to make their purchases at brick and mortar stores,” said Walter Leung, MD of GfK Hong Kong.

Price is a big driver of online growth – for example, the price of baby bottles sold online averages US$7.10, compared with $7.90 to $10 in specialty stores and department stores.

“Physical retail stores in the baby care market are facing intensifying competition from increasing number of Internet retailers who have started selling baby care products,” said Leung.

“To compete effectively with the offline market, it is important for online retailers to keep enhancing the other aspects of sales, such as it’s after sales service, delivery time, etc,” he suggested.

GB