The appearance of a larger numbers of foreign investors and foreign funds in the mother and baby market proves the attractiveness of the market. However, this $7 billion market is entirely not easy to be “eaten”.
Being considered as the country with the highest proportion of young households in Southeast Asia with 12 percent of households having children from one to two years old, Vietnam is considered as a very potential market for companies providing services and products related to mother and baby.
*Doors widely opened for foreign investors
The market revenue for products and services for children in Vietnam has been forecasted to reach $7 billion, with the growth rate of 30-40%.
In addition, according to Nielsen, with the growing middle class in Vietnam, the demand of parents for products and services for children is increasingly high, both in terms of quantity and quality.
In developed markets where birth rates are low and baby care products are saturating, growth will be driven by renovation and upgradation of projects, while in developing markets, increased demand will be the biggest growth momentum.
Especially, consumers’ shopping habit has clearly shifted from the traditional model of markets, supermarkets to sales chain for mother and baby.
The strong growth of the mother and baby market in recent years is probably the reason explaining the attractiveness of this market against foreign investors. Most recently, there must mention Vietnam market penetration of the U.K retailer i.e. Mothercare. This brand specialises in UK standard product lines for mothers during pregnancy and care for infants to up to five-year-old children.
Explaining the reason for starting the journey to penetrate Vietnam market, Mothercare said it has realised attractive opportunities from Vietnam’s mother and baby market. Therefore, this brand is ambitious to reap successes in Vietnam as it used to succeed in other markets.
Earlier, at the beginning of the year, the mother and baby market also recorded some capital injection deals from some foreign funds.
In spite of not disclosing investment value, Vietnam Investment Group (VI Group) announced to have invested in Kids Plaza JSC. In addition, Con Cung received additional capital and support from Vietnamese growth investment fund i.e. Daiwa SSIAM II.
Remember, at the end of 2017, Bibo Mart shook hands with ACA Investments (under Sumitomo Group) to receive from this investment fund supports in finance, human resources.
*Not easy-to-eat cake
Large market potential, high growth rate shows that the attractiveness of the industry of obvious. However, it is entirely not easy to occupy the market which is forecasted to reach $7 billion.
This is shown by the “come and go” of many foreign investors who used to be present in Vietnam market such as Kids World, Deca, Beyeu, Babysol, etc. One of the reasons for the farewell of these brands was the intense competition of the sector.
Trinh Lan Phuong, CEO of Bibo Mart used to say that “It is a difficult math to dominate the mother and baby market”.
This is reflected by the fact that many customers said the mom and baby store chain now can only meet popular demand but not the demand of middle-class customers who are supposed to spend large money on shopping for their children.
Specifically, if consumers are willing to spend 10 million dong on purchasing abroad for consumer goods for mother and baby, they only spend 500,000 dong to purchase at specialised stores for mother and baby. This has somewhat indicated that consumers are not easy going.
This is really a difficulty that both domestic and foreign businesses have to experience before wanting to dominate the market.
