Matters:
During the two sessions in 2022, encouraging fertility has become a key topic. Among them, the government work report pointed out that the supporting measures to improve the three child fertility policy include the inclusion of the care expenses of infants under the age of 3 into the special additional deduction of personal income tax, the development of inclusive childcare services and reducing the burden of family rearing. Guoxin retail view: at present, in the context of China's aging population, it is imperative to promote the policy of encouraging fertility, but the effect of simple fertility liberalization policy on stimulating fertility has been relatively limited. It is expected that there will be continuous supporting incentive policies in the future to solve the substantive repression factors such as the high cost of living and education. Under the continuous policy catalysis and the general trend of consumption upgrading, it is expected that the scale of the mother and baby market is still expected to achieve structural improvement in the future, and the leaders of relevant subdivided mother and baby tracks are expected to further benefit. 1) In the field of maternal and infant retail, it is suggested to pay attention to Kidswant Children Products Co.Ltd(301078) and Shanghai Aiyingshi Co.Ltd(603214) , which have the ability of channel expansion, digital operation advantages and membership system construction; 2) In the field of maternal and infant daily chemicals, it is suggested to focus on leading daily chemical enterprises that build maternal and infant washing and care brands based on their own R & D ability, brand strength and multi-channel operation ability, such as Yunnan Botanee Bio-Technology Group Co.Ltd(300957) , Shanghai Jahwa United Co.Ltd(600315) , etc.
Comments:
Sorting out Fertility Policies: opening birth restrictions and encouraging fertility in multiple directions
Encouraging childbearing has become a key topic of the national two sessions in the past 22 years. The government work report clearly pointed out that it is necessary to improve the supporting measures of the three child fertility policy, include the care expenses of infants under the age of 3 into the special additional deduction of personal income tax, develop inclusive childcare services and reduce the burden of family rearing. At the same time, during the two sessions, the number of proposals and suggestions on encouraging fertility doubled over last year, reflecting the general concern of all sectors of society about fertility and people's livelihood. Many representatives and members put forward suggestions from the perspectives of increasing financial subsidies, reducing housing costs, developing inclusive childcare, and providing equal parental leave for men and women.
Resumption of China's relevant Fertility Policies:
Since the beginning of the 21st century, great changes have taken place in China's population situation. The problems of labor force sustainability, aging and population structure began to appear. The "one-child policy" implemented since the 1980s was loosened and the birth of two and three children was gradually liberalized. From the formal implementation of the family planning policy in 1981 to the implementation of the comprehensive three child policy in 2021, the changes of the family planning policy in the past 40 years have had a far-reaching impact on Chinese society. From two children alone to two children alone, and then to two to three children in an all-round way, China's family planning policy and supporting system have gradually changed to the trend of encouraging childbirth and child rearing friendliness. Specifically, China's fertility policy mainly includes the following stages:
1) "double only two children" (November 2011): on December 29, 2001, the 25th meeting of the Standing Committee of the Ninth National People's Congress of the people's Republic of China deliberated and adopted the population and family planning law, which stipulates that if both parties are only children and have given birth to one child, they can have a second child. According to the law, all localities have successively promoted the "double only two children";
2) "two children alone" (November 2013): in 2013 and 2015, "two children alone" and "comprehensive two child policy" were implemented successively. On November 15, 2013, the Third Plenary Session of the 18th CPC Central Committee adopted the decision of the CPC Central Committee on several major issues of comprehensively deepening reform, which launched the implementation of the policy that couples with one only child can have two children. However, the implementation of the "single two child" population policy has been cold. In the two years since the implementation of the "single two child" fertility system, the fertility wishes of eligible couples are far less than expected;
3) "comprehensive second child" (January 2016): on December 27, 2015, the 18th meeting of the Standing Committee of the 12th National People's Congress decided to amend the population and family planning law of the people's Republic of China. The new policy stipulates that the State advocates a couple to have two children;
4) "three child policy" (202108): on August 20, 2021, the Standing Committee of the National People's Congress voted and adopted the decision on Amending the population and family planning law (hereinafter referred to as the decision). The revised population and family planning law stipulates that the State advocates age-appropriate marriage and childbearing, and a couple can have three children; The introduction of the comprehensive three child policy has once again aroused social concern about China's fertility policy and supporting facilities.
However, on the whole, due to the high cost of living, including education, housing, medical treatment and other factors, the fertility desire of school-age people is decreasing. Therefore, the regulation effect of the simple fertility liberalization policy on fertility behavior is weakening. In 2013, China implemented the "separate two child" policy, but the birth rate continued to decline after a slight improvement. In 2016, China fully liberalized the two child policy, However, it has not played a fundamental role in improvement. The number of Chinese born population in 16-21 years is still declining. The number of Chinese born population in 21 years was 10.62 million, a new low since 1949. The birth rate was 7.52 ‰, the lowest level ever recorded. China's natural population growth rate in the past 21 years has been close to 0%.
We believe that the weakening of policy effect is mainly due to economic pressure and the change of fertility concept. According to China's fertility cost report in 2022, the average cost of raising children aged 0-17 in 2019 was 485000 yuan, about 6.5% of GDP per capita in 19 years Nine times. Compared with other countries, the multiple of dependency cost in Australia is 2.08, that in Japan is 4.26 and that in the United States is 4.11. The cost of raising children in China is higher than the average level in developed countries. Under economic pressure, the willingness of Chinese couples of childbearing age to bear children is gradually decreasing. According to the survey of the health and Family Planning Commission, the average number of family planning children of Chinese women of childbearing age decreased from 1.75 in 20062016 to 1.64 in 2021. The data show that although the policy environment is continuously relaxed, the pressure of fertility cost makes ordinary families lack the basic motivation to have a second child.
At the same time, from the market index, after the introduction of the "separate two child" policy in the early stage, the stimulating effect on the market is more obvious, but in the later stage, with the increase of parenting costs, people's fertility will has changed. After the introduction of the "comprehensive two child" and "three child" policy, the stimulating effect on the market is significantly weakened.
Therefore, in order to cope with the continuous decline of the birth rate, on May 31, 2021, in addition to the comprehensive liberalization of the three child policy, China launched a series of supporting policies to stimulate the increase of the fertility rate, which shows that the state has paid unprecedented attention to the improvement of the fertility rate. Under the policy stimulus, it is expected to curb the decline of the birth rate. At present, after the implementation of the three child fertility policy, the central and local supporting active fertility support measures are being introduced one after another. The corresponding supporting policies for three children are mainly reflected in the development of inclusive childcare service system, the improvement of maternity leave and maternity insurance system, the strengthening of supporting policies such as taxation and housing, and the promotion of educational equity and the supply of high-quality educational resources.
In addition, according to the contents of the decision, 25 provinces have completed the revision of the regulations, and some provinces have formulated implementation plans. From the current situation, relevant supporting policies mainly focus on extending maternity leave and maternity leave, increasing housing, education and financial subsidies, so as to further improve the birth rate; Specifically, all localities have generally extended maternity leave for 30-90 days, and increased the development of inclusive childcare services and the protection of the rights and interests of family planning families; Some regions have tried first and actively implemented the supporting measures for childbirth issued by the central government's decision. For example, Zhejiang has incorporated the construction of a childcare friendly society as a major reform measure into the construction of a leading demonstration area for common prosperity, Panzhihua has improved the childbirth service system and explored the issuance of childbirth allowances, and Linze County, Gansu Province has introduced childbirth allowances, childcare subsidies 11 subsidy measures such as house purchase subsidy, etc.
Policy impact: driven by favorable supporting policies for childbirth and consumption upgrading, relevant industries are expected to usher in development opportunities in the future
With the introduction and active implementation of the follow-up supporting policies of the three child policy, China's maternal and infant industry market is expected to usher in development. Although the market is generally worried about the decline of the birth rate, with the unprecedented major changes in policies, supporting fertility and superimposing the general trend of consumption upgrading will promote mother and child related industries. According to AI media data, by 2020, the size of China's maternal and infant market has exceeded 400 billion yuan, while the overall growth level remains at this double-digit level.
At the same time, consumption upgrading is also driving the development of the industry. Over the past 10 years, the per capita disposable income of Chinese residents has been expanding, exceeding 35000 yuan in 21 years. With the increase of income and the increasing attention of families to childcare, the consumption frequency and unit price of maternal and infant products continue to increase.
I. maternal and infant retail market
Offline channels such as mother and baby stores and supermarkets are still the main consumption scenes of China's mother and baby retail market. According to China industrial information network, mother and baby stores are the largest offline sales channels, and the total sales volume accounted for 40% of China's mother and baby commodity offline market in 2020. At present, the trend of omni-channel integration of mother and child is more obvious. Based on the double endorsement of brand and channel, offline channels provide selected high-quality goods, professional knowledge exchange and troubleshooting, and one-stop shopping experience of all categories; There are more and more complete commodity categories in online channels, which are not limited by time and space, and can meet the convenient and fast needs of customers. In recent years, customers tend to obtain more cost-effective goods and better consumption experience through multi-channel switching. Mother and child retailers realize complementary advantages through Wuxi Online Offline Communication Information Technology Co.Ltd(300959) omni-channel operation.
Focus on head mother and baby Retailers: Kidswant Children Products Co.Ltd(301078) and Shanghai Aiyingshi Co.Ltd(603214)
Pattern of China's maternal and infant retail industry: the competition in the maternal and infant retail end industry is diverse, mainly in online and offline channels. Due to the low threshold of China's maternal and infant retail industry, most of the industry are small-scale enterprises, and the market concentration is not high. In recent years, due to the relatively mature distribution of mother stores and infant chain stores, it is expected to accelerate the expansion of mother stores and infant chain stores, with the relatively mature distribution of mother stores in recent years.
1) Kidswant Children Products Co.Ltd(301078) : Kidswant Children Products Co.Ltd(301078) is mainly engaged in the retail and value-added services of mother, child and child goods. It is an innovative new family omni-channel service provider driven by data and based on customer relationship management. In recent years, the business scale of the company has increased rapidly. In 2019 / 2020, the company achieved revenue of 8.243/8.355 billion yuan respectively, with a year-on-year increase of 23.56% / 1.37% respectively, ranking in the forefront of mother and child retail industry. At the same time, the company has created a large store model of "goods + services + social" with members as the core assets, a childcare consultant service model and a single customer economic model under the heavy membership system. Offline stores cover 131 cities across the country and serve more than 42 million member families; Through the digital construction of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) integration, the omni channel shopping experience integrating member service, commodity management, logistics distribution and operation is realized.
Build a "maternal and infant" brand-based procurement platform for all pregnant and infant groups. Its products cover infant dairy products, paper products, feeding supplies, toiletries, cotton textiles, toys, lathes and other categories, with more than 10000 kinds of products. At the same time, it has established close strategic cooperative relations with many well-known group companies at home and abroad.
II. Mother infant daily chemical market
Benefiting from the development of maternal and infant e-commerce and the innovation and upgrading of categories, the scale of China's infant and child care market has grown steadily. According to Euromonitor data, in 2020, the market scale of China's maternal and infant care products reached 28.44 billion yuan, a year-on-year increase of 10.0%, and the CAGR from 2016 to 2020 was 13.61%; In recent years, as parents' requirements for the safety and functionality of mother and baby washing products have been continuously strengthened, the product types of mother and baby washing products have been continuously enriched, and the market continues to attract new brands; At the same time, benefiting from the incremental demand brought about by the outbreak of online channels and the continuous upgrading of consumption power and the increase of off-site unit price, the market scale of baby and child care products is expected to continue to expand. It is expected to reach 50.041 billion yuan in 2025, and the 2021e-2025e CAGR is about 11.1%.
Pay attention to the distribution of Yunnan Botanee Bio-Technology Group Co.Ltd(300957) and Shanghai Jahwa United Co.Ltd(600315) in maternal and infant care
1) Winona baby under Yunnan Botanee Bio-Technology Group Co.Ltd(300957) company: the brand is positioned as professional infant skin efficacy care, and the products are age divided. The existing products include 0-2-year-old product line and 2-12-year-old product line; The channel side creates a professional image through professional channels such as pharmacy and confinement center, follows the channel advantages of the main brand Winona, and further gives play to the synergy. After offline precipitation, Winona baby gradually improved its online layout and won the top 10 of tmall baby skin care category in the 21st double 11.
2) Shanghai Jahwa United Co.Ltd(600315) 's "Qichu": founded in 2013, Qichu focuses on "customized for 0-3-year-old infants" washing products and provides maternal products. In 20 years, it has accounted for 2.5% of the market in China's maternal and infant industry, ranking sixth. Tiktok has its professional strength and professional backing, and has double endorsement from China. In the channel end, the brand was cut from professional channels at the beginning of its creation, based on 14 second tier city, joint gynecology and obstetrics hospital, and the monthly club, etc., and subsequently increased the volume of traffic in the new brand of electric business, such as jobing.
Investment suggestion: focus on the topic of fertility policy of the "two sessions" and pay attention to the development opportunities of maternal and infant industry segments
At present, in the context of China's aging population, it is imperative to promote the relevant policies to encourage fertility. However, the effect of the simple fertility liberalization policy on stimulating the fertility rate has been relatively limited. It is expected that there will be continuous supporting incentive policies in the future to solve the substantive repression factors such as the current high fertility cost of residents. Under the continuous policy catalysis and the general trend of consumption upgrading, it is expected that the scale of the mother and baby market is still expected to achieve structural improvement in the future, and the leaders of relevant subdivided mother and baby tracks are expected to further benefit. 1) In the field of maternal and infant retail, it is suggested to pay attention to Kidswant Children Products Co.Ltd(301078) and Shanghai Aiyingshi Co.Ltd(603214) , which have the ability of channel expansion, digital operation advantages and membership system construction; 2) In the field of maternal and infant daily chemicals, it is suggested to focus on leading daily chemical enterprises that build maternal and infant washing and care brands based on their own R & D ability, brand strength and multi-channel operation ability, such as Yunnan Botanee Bio-Technology Group Co.Ltd(300957) , Shanghai Jahwa United Co.Ltd(600315) , etc.
Risk tips:
The launch of new products was less than expected, and the offline exhibition stores were less than expected.
