The Baby industry undergoes a healthy growth throughout 2021. Parents are putting their babies’ needs into their priority among other household needs.
The growth in the Baby market is slower in 2021, similar with overall FMCG. Even though slowing down, baby needs remain as a priority among households with baby even during the challenging times.
Baby categories are essential to households with kids, especially households with Newborn who have the highest spend per buyers. The importance of Baby categories will slow down as the kids get older, hence seize the winning opportunity among moms with Newborn is critical for industry players.
To answer the question of “How to Cherish the Right Moments in Baby Industry” there are four keys to leverage for brands in the Baby market.
1. Understand preference of your target buyers
2. Extend presence to specialty store and online
3. Win over a slim window of opportunity in newborn stage
4. Justify value to win share of wallet in toddler stage
It comes as no surprise that the upper class hold the highest spending in the Baby categories although modest growth in 2021. On the other hand, the middle and lower class manage to post significant growth at 7% and 16% with spend per buyer ranging between 1.45 million rupiah to 1.96 million rupiah. Additionally, the lower-class buyers are seeking access to buy new categories as there are 14 categories (out of 18) that able to attract more buyers from this group. With limited cash outlay among lower class, pitching the right pack size and the right price for them is essential so they can enter the category and buy your brand.
General Trade and Minimarket remain as the key channels for Baby categories; General Trade is accounted for 60% and 28% for Minimarket occasion share in 2021. From the penetration point of view, minimarket is stabilized in 2021 while Specialty Store and Online are gaining new buyers.
Buyers in Specialty Store and Online have a high interest for basic Baby necessities such as Dairy, Diaper, and Telon Oil. The profile of the buyers in these two channels is dominated by middle-upper class.
In terms of age, Specialty Store is more relevant to young moms (up to 25 years old) as they still need assistance from the salesperson to get knowledge about baby products. As for the Online, more experienced moms from the millennial generation dominate this channel as they spend the highest.
To maximize the slim window of opportunity, focusing on the necessities is the ultimate way as these categories are considered as irreplaceable. The first irreplaceable category is Diaper with a high relevancy among the households with kids below 1YO, as seen with almost 100% penetration. The next irreplaceable category are Telon Oil and baby wash that are used mostly since new-born up to 3yo.
On top of keeping the necessities during the new-born stage, moms also aspire to give the best at this stage. Although moms prefer to breastfeed their babies, especially during the stay-at-home period, whenever they are not able to do so, they look for the best-in-class alternatives for their babies. Super-premium/ultra-premium baby formula milk has been proven to have higher spending value compared to the mainstream ones, showing that moms profoundly want the best for their baby.
Usually when the kids reach toddler stage (1-6 YO), households will reprioritize their spending. As a result, they will opt for more affordable brands as they adjust the overall household spending budget. One example coming from the Infant Milk Formula and Growing Up Milk where the value share of the mainstream brands is significantly increased when the kid reached 1 YO milestone. Similar trend is also observed in baby personal care where the overall spend is lower as the kids is getting older.
