Baby boom: SEA’s mom and babycare startups meld content with commerce

Mom and babycare ecommerce players are struggling in China amid weak consumer spending and the flagging birth rate in the country. But in Southeast Asia, it’s a different story.

“SEA has half the population of China, but we have more babies born every year,” says Roshni Mahtani, CEO and founder of The Parentinc, which owns mom and babycare media platform theAsianparent.

That has led to a gamut of mom and babycare startups popping up across the region. One of the largest funding rounds went to Vietnam-based retailer Con Cung, which raised US$90 million in January.

While there is no clear market leader in the region for the mom and babycare segment, several players have a similar approach: blending content, community, and commerce in their platforms. It allows them to have deep insights into their customers while cutting marketing spend, before ultimately setting the stage for strategies like private label products.

At the same time, ecommerce heavyweights like Shopee, Lazada, and Tokopedia have taken notice, with some of them mimicking the content and community angle. Will the niche players still hold an advantage?

A fertile land?

Asia Pacific’s mom and babycare products market is poised to hit nearly US$48 billion by 2026, according to Research and Markets.

While there’s no estimate for the market size in Southeast Asia, Indonesia has a fertility rate of 2.26 per woman in 2020 compared to China’s 1.7 per woman in the same period, based on data from World Bank. Other countries in the region have similar figures.

For startups, this means a longer customer lifetime value, especially in countries with birth rates of more than two per family, Mahtani adds. As Insignia Ventures Partners notes, parents with children aged between zero and seven years old will spend most of their income on their child’s needs.

The VC firm, an investor in Indonesian parenting platform Tentang Anak, estimates that spending for children in their first seven years across healthcare, education, and other products has surpassed US$53 billion in Indonesia last year. That figure is expected to increase.

Ferry Tenka, founder of Indonesia-based player Orami, is optimistic about the market potential because children’s goods can be categorized as primary needs, which tend to have no substitute. He notes that consumers in this segment also tend to be more loyal than those in the adult personal care and FMCG categories.

“This sector can be considered recession-proof,” adds Tenka, who is now CEO of entrepreneur solutions at Indonesian ecommerce enabler Sirclo, which acquired Orami last year.

Central to these companies’ strategies is an emphasis on content.

Are profits in sight?