29 Feb 2016
South Korean Baby Sector Rallies Despite Record Low Birth Rates
Move toward smaller families sees spend prioritised on well-being of single child by parents and grandparents.
Despite having one of the world's lowest births rates (1.21 per woman), South Korea's appetite for baby and child products seems undiminished. As proof of this, the recent BeFe Baby Fair, held at the COEX Convention and Exhibition Centre in Seoul, attracted more than 110,000 visitors across its three-day run. Overall, the value of the country's baby market is now estimated at around 1.7 trillion won (US$1.38 billion).
It is believed that the smaller family sizes that now characterise the country have actually fuelled spending, with parents prioritising spending on their only child. In line with this, one industry commentator said: "The number of families with just one child is growing. Parents, even if they have to struggle to afford it, are willing to spend on any items they see as necessary for that child's well-being."
According to the show's organisers, this commitment – coupled with concerns over the country's stagnating economy – has seen many parents seeking out competitively priced local products. Such parsimony, however, has not entirely dispelled Koreans' appetite for European – particularly Nordic – products, with imported strollers ($1,600) and baby chairs ($400) still very much in demand.
Another phenomenon noted by a number of exhibitors at the show was the rise of the Urban Granny as one of the key spenders in the sector. This was endorsed by a recent online survey that showed that sales of babycare products had grown most rapidly among consumers aged 60-years-old or more, with those in the 50-plus sector taking second place.
Aside from the traditional element associated with the sector, notably toys and foodstuffs, a number of new items has also emerged on the agenda of many young Korean parents, including a variety of household appliances and the services of biotechnology companies. One beneficiary here has been Conway, a Korean home appliances company.
The company had come to COEX to showcase its latest air purification system. This automatically monitors the level of fine dust in a room and then transmits the information to a designated smartphone. The system has been designed to alleviate parents' concerns over the detrimental effects of environmental pollution on the health of their child. Such concerns were reflected in the popularity of a number of other items at the show, notably nasal aspirators and digital thermometers.
In terms of biotech, several companies were also keen to capitalise on the health concerns of Korean parents. To this end, a number of local operators, including Medipost and Boryung Medience, were offering umbilical cord blood banking services, a facility that stores blood cells collected at birth. Such cells can then be used later in life to help treat a number of supposedly incurable conditions, including leukemia, according to the companies concerned.
Austin Oh, Seoul Consultant