Thanks to the relaxing of the single-child policy in 2016, China is predicted to be heading towards a baby boom, with the number of newborns predicted to reach 18 million by 2018. As a result, the countries already crazy annual spending on baby products is set for 15 per cent year-on-year growth, rising to RMB 969 billion ($147.4 billion) by 2020.
Chinese born in the ’80s and ’90s are fearless tech lovers, with a recent survey finding that 60% of the population consider themselves early adopters. Babytech sales are already strong, and these changing demographics paired with a growing urban middle class are set to
A number of babytech devices have already created a furor in China. In particular Moodoo, a smart fetal monitoring patch which managed to raised more than $4.3 million in five minutes. Other successes have been smart milk formula mixing machines, like NicePapa and the number of smart thermometers and monitoring devices.
We spoke to Liang Du, CEO of Mommy Knows, an OEM/ODM company that focuses on Smart Diapers, Oscar Chan of Bimado, a foreign owned, but Chinese based baby tech manufacturer and Lucas Wang, CEO of hardware collaboration platform, HWTrek. They gave us the info on what overseas companies need to succeed in this flourishing smart product market.
Consider the Chinese family as a whole
A difficult recent history and rapidly changing social milieu have created complex sets of consumer demands that are distinct from the US. Young Chinese parents are some of the savviest, early adopters in the world and make, informed, research-driven tech consumption decisions.
Unfortunately, the situation is not as simple as marketing strictly towards this demographic. Grandparents commonly take the role of raising children, while parents work long working hours. According to Liang Du, creators of babytech devices “Always have to consider three factors. First, the user (baby), then the person purchasing the device (the parents) and finally the operator (grandparents).”
Older generations of Chinese mostly grew up poor, in a country that was technologically behind the rest of the world and are confused by complex features. They also hold a number of folk beliefs that are incomprehensible to non-natives. For example, Bimado found at the testing stage, that many older Chinese believe that the correct treatment for a child with a fever is to wrap them in as many layers as possible, making it impossible for their device to get accurate temperature readings. Oscar Chan recommends that overseas companies in the babytech field in China, “study the overall preference of the whole Chinese household, rather than thinking about consumers individually.” You need to make the device simple enough for this generation to use, while still being technically advanced to attract parents.
Being foreign is no longer enough
China has changed. The catchment of buying a product from the West is fading and consumers are starting to prefer Chinese electronics brands. This is especially true of IoT and smart products, where China is widely perceived as having a competitive advantage. The ecosystem for smart products in Shenzhen and the rest of China is so advanced, that it is almost impossible for overseas companies to compete on features. Oscar Chan, recommends that it’s better to concentrate on branding, industrial design, and product safety: “Many Chinese products have really strong features but feel cheap or look ugly. Foreign companies can really add value and be competitive through telling a story…. branding, industrial design, swish UI and safety certification.” These views are echoed by Lucas Wang: “For more simple functioning hardware you can’t differentiate on hardware because that is easily replicated, the real value for Chinese consumer is in services and user experience.”
Companies need to be special. The market is much more mature than the West and consumers have seen a lot before. Just adding BlueTooth, Wifi, and an app to a traditional toy, is not enough to woo consumers. According to Liang Du, If you do want to go down that path of adding technical features to a familiar baby product, then “make sure that every last bit of your design is as good as the traditional product.”
Find a local partner
Mao Zedong said “Women hold up half the sky,” but in modern Chinese households, the mother now has an even greater share of the decision making process. As Liang Du explains, “The role of the father in shopping has been reduced to only suggestions. It’s useless selling a babytech product on features or techy spec stuff that men like. You need to use more feminine trigger words in your branding like “natural” and “environmentally friendly.”
To meet the demands of the China market, it is best to work with a Chinese partner. The supply chain in Shenzhen and the rest of China is pretty complete, from sensor manufacturers to specialist babytech design houses. Foreign companies who base themselves in China, can take advantage of this ecosystem and get both the edge on the local market and the global one. As Oscar Chan explains that “Shenzhen has become so international. The company I work with has a Swiss designer. Shenzhen had a good downstream ecosystem and now they have upstream as well. Everything is here.”
Lucas Wang adds: “Working with a local design house or manufacturer, means that you are able to meet the rapidly changing preferences of local consumers. The preferences of Chinese parents change so quickly and without a local partner, you are fumbling around in the dark.”