After China drastically changed its family planning policy in October 2015 to encourage couples to have two children, it is widely expected that China’s baby and parenting product market will undergo a robust growth. Media were also eagerly waiting for these industries to boost their ad spending.
However, things turned out not to be the case.
Ad spending by baby and parenting product manufacturers dropped in the first four months of this year from a year ago, according to CTR Media Intelligence’s ad spending monitoring data.
Growth? What growth?
In the first four months of this year, this industry’s ad spending dropped by 11% from a year ago and the reading was red in three out of the four months. It seems the whole industry is determined to reduce their ad budget, though some individual brands did spend more.
Geographically speaking, from the 32 provinces on CTR Media Intelligence’s radar, this industry’s ad spending grew in only 10 and most of them are in central and west China. (Ningxia was newly added so no annual comparison was available.) The worst hit three provinces were Inner Mongolia (-78.1%), Liaoning (-59.1%) and Jiangxi (57.8%).
From a sector by sector perspective, infant formula is still the biggest spender across the whole industry: it contributed 69.7% of all spending, followed by baby diapers (24.5%). The next five sectors added up to only 5.8%. However, the strongest growth also came from the smaller sectors: baby care product sector’s spending jumped by 25.5% while that of baby food soared by 47%.
Though the overall ad spending from baby and parenting product industry was shrinking, some sectors still have potential for growth. Baby food, baby product (such as feeding bottle, baby stroller, car seat for baby) and retail services are some of the most promising sectors.
TV takes away 90% of the cake, but office building screen is the fastest growing medium
It seems to be a no-brainer for this industry to buy TV ads: 91.7% of the ad spending went to TV, while the second largest medium, office building screen, has only 6.7% and the third largest - transport TV screen - was below 1%.
The source of the ad money on TV is identical to the big picture: infant formula accounted for 68.7% and baby diapers 25.5%. However, the growth data tells another story: infant formula’s ad spending dropped 15.2% and baby diapers lost 9.2%. The fast risers were baby care product (+38.7%) and baby food (+57.7%).
Office building screen’s ad revenue was dominated by infant formula and baby diapers. Infant formula not only contributed 89.7% of all spending, but also was growing by 94.7%. Baby diapers accounted for 9.5% but decreased by 10.2% from a year ago.