Reporter Dang Peng reported from Chengdu
"Finally sending my child to kindergarten." At the beginning of the school year, Mr. Zhang, who lives in the south of Chengdu, told the China Business Daily reporter that the child had been taken by her mother to the early education class, and the annual expenditure was about 20,000 yuan. Even now in kindergarten, the child's mother is still busy consulting other early education classes between the ages of 3 and 6, and the two disagree.
This also gives new opportunities for early education enterprises. The reporter noted that from the last trading day of January 28 before the Spring Festival holiday, including Mei Jim, Child King, Baby Room, Gaole Shares, Weichuang Shares and other stocks involving the concept of babies and children began to be active, and individual stocks appeared in the trading days after the Spring Festival. On February 24, affected by the trend of the broader market, although the concept of baby and child stocks showed a downward trend, industry insiders told reporters that they were still optimistic about the upgrading of offline baby and child consumption and market expansion.
"Mainly affected by the implementation of the three-child policy, especially some local governments and enterprises have issued various policies to encourage fertility, so the capital market has shown an active trend." Ge Wenwei, founding partner of Duo whale capital, which has long been concerned about the baby and child consumption market, told reporters that because of the impact of policies, the development of K12 is limited, and the integration of babies and children aged 0 to 6 is bringing new scenes and new momentum, and at the same time accelerating the sinking to low-tier cities dominated by third- and fourth-tier cities in a comprehensive upgrade, and becoming a unified large market.
New opportunities after the shuffle
"There are about 500 babies and children registered in our store now, which is a small number compared with other stores." The head of a store of an early education chain brand urged reporters that there were many parents who had consulted recently and hoped to register as soon as possible.
According to reports, the main object of the early education center is 0 to 3 years old children, opened with cheerful classes, music classes, art classes, etc., generally are the purchase of card stored value, here swipe card consumption, a single course per cost of about 200 yuan.
But the above-mentioned Mr. Zhang's lover hopes to choose a new early education course for his 3-year-old daughter, mainly focusing on English and some educational courses such as physics experiments, so recently he is still consulting at major commercial complexes near his home.
For Ma Lin, head of the real estate consulting company that does the work of shopping mall investment, the early education center is now the key project of the shopping mall investment, because of the uniqueness of its offline experience, it can bring crowd flow and consumption to the mall, and the shop area used by the chain brand is large. "Mainly in the past two years, the early education center has been shuffled, and now the enterprises that have survived have a chance."
The reporter noted that in the past two years, affected by the new crown pneumonia epidemic, there have been many news of the closure of early education centers in various places. But with the end of this round of shuffling, especially K12 education is limited, it has brought new opportunities to the early education industry.
"Although the willingness to have three children in society has not yet been clearly reflected, the policy is leading." Ge Wenwei said that this has produced two driving forces: on the one hand, although the current policy of encouraging fertility is scattered, it will soon lead to a series of systematic incentive policies issued by local governments and enterprises; on the other hand, although there are relatively few newborns, it essentially promotes the comprehensive upgrading of children's clothing, clothing, toys, early education, children's entertainment centers, etc., and is valued by parents, and the unit price of customers will continue to rise.
In this regard, Mr. Zhuang, who is a parent-child clothing brand in Guangzhou, said that although the current birth rate of the second and third children is not high, there are still many opportunities brought by this, especially in the garment industry in the past two years. "Unlike the sportswear track where several giants occupy a large share of the market, there are still various opportunities for the baby and child track, especially the prospect of parent-child clothing is promising." Mr. Zhuang said that at present, he is planning the brand VI design of the parent-child life hall, mainly focusing on parent-child clothing, baby and child toys, etc., and emphasizing offline experience and interaction, which will soon be piloted in some cities.
Structural adjustment and industry upgrading
In fact, in the concept stocks of infants and children, many companies have made it clear in their recent performance forecasts that there will be losses of varying degrees in 2021.
"I think that the loss of baby and child concept stocks, in addition to being affected by the epidemic, the main factor is not the operating loss, but the strategic loss." Ge Wenwei said that the fundamentals of the baby and child consumption track are still optimistic, and at the same time, some enterprises are also promoted to adjust and upgrade their business sectors according to national policies and market changes.
Among them, Mei Jim's financial report shows that the company's main business is currently divided into two major areas: early quality education and language training for young people studying abroad. In the first half of 2021, Meijim's revenue was 175 million yuan, of which the operating income of early education services was 165 million yuan, an increase of 189% year-on-year, and the proportion of operating income increased from 45% in the same period last year to 94%. Other revenue was only $0.1 billion.
"The three-child policy can increase the number of new births in the mainland by more than 1 million in 2022, and it is expected to increase the number of newborns by an average of 800,000 per year in the coming year, which will have a pulling effect on the consumer demand in the field of early education." Mei Jim said in the 2021 semi-annual report. Obviously, this transformation has given Mei Jim a taste of dividends.
In addition, Weichuang shares also proposed that with the introduction of the optimization of the birth policy, the whole people pay attention to the implementation of the policy and supporting support, the company is also exploring new business directions, such as childcare /early education institutions, communities, families and other businesses that help children grow up related to operations, services, talent training, etc., and has now made multi-dimensional attempts and formed a certain scale.
Colle Shares, which has multiple toy IPs, is also fully aware of the urgency of upgrading in the toy industry. "The toy industry in developed countries such as Europe, the United States, and Japan has developed maturely, and its toy companies rely on the mature business model of 'brand + channel' to occupy the high value-added links of the toy industry chain, with high industry concentration and large scale." With its huge scale, well-known brands, strong R&D capabilities, novel ideas, global penetration of the promotion means and stable sales channels formed by its long-term development, the international toy giant is at the forefront of the global toy market. Gaole co., Ltd. stressed in the financial report that domestic enterprises are in an embarrassing situation of OEM, OEM and low-end toy products for developed economies, independent innovation ability and brand awareness are relatively insufficient, and the profit margin is small.
Ge Wenwei believes that compared with the Japanese baby and child consumer market, there is still a big gap in the domestic baby and child consumer market, and the upgrading of the industry is bringing new opportunities. To this end, Ge Wenwei's company has introduced a Japanese early education enterprise last year, which is currently being incubated and promoted in the Yangtze River Delta, and is expected to be promoted to Chengdu and Xi'an in the next three years.
"In the future, we will mainly focus on four directions, including education, publishing, children's dramas and children's IP, especially the authorization of IP covers milk powder, drinking water, complementary food, toys, teaching aids, etc." Ge Wenwei said that in large-scale commercial complexes, children's play centers and experience centers are the embodiment of upgrading, with the promotion of policies, industrial upgrading, the emergence of new scenes and new categories, the development of the integration of 0 to 6-year-old babies and children is the process of deep market reshuffling.
Promote the sinking of the consumer market
"Taking electric toothbrushes as an example, in the past, only parents in high-tier cities may buy electric toothbrushes for their children, but now whether it is a third- or fourth-tier city or a lower-tier town, parents may buy electric toothbrushes for their children." Ge Wenwei stressed that in the baby and child consumer market, there is no traditional concept of the difference between one ring and five rings, because the channels for obtaining information are consistent, the concept of consumption is consistent, so it is indiscriminate consumption, and even the lower the city, the more it aspires to be the same as the consumption of high-tier cities.
Such a yearning has been keenly captured by enterprises in the field of infant and child consumption. According to the 2020 "China Early Education Blue Book", the participation rate of children under 6 years old in first-tier cities has reached 69.76%, while the participation rate of second-tier and other low-tier cities is less than 30%, and a new round of industry reshuffle has begun, and the third- and fourth-tier cities will become the main battlefield and growth point of the industry in the future.
"In particular, the site rent and personnel wages in third- and fourth-tier cities still have great cost advantages compared with first- and second-tier cities." An early education industry source told reporters. In addition, from the price of early education single course, although it does not reach the price of three or five hundred yuan, it is also more than 100 yuan, with a high gross profit margin.
Among them, Mei Jim has begun to lay out. In 2019, Mei Jim specially launched the sub-brand "Little Jim", which aims to penetrate the early education market in third- and fourth-tier cities and propose "differentiated positioning and dislocation development". As for the current development of Little Jim, it has not been revealed from its financial report, and its official website shows that there are currently 7 centers in county-level cities such as Meixian County, Shaanxi.
In addition, in 2021, Zi Wang proposed a plan to invest 1.5 billion yuan in the construction of omni-channel retail terminals, 200 million yuan for the construction of omni-channel digital platforms, and 210 million yuan for the construction of omni-channel logistics centers. After the completion of the above-mentioned project construction, the offline stores of Child King will sink to a number of second- and third-tier cities, and the scale effect will gradually appear.
According to the plan of the child King, the company plans to build 300 digital stores in 22 provinces and cities such as Jiangsu, Anhui, Sichuan, Guangdong and Chongqing in the next three years, and the number of the company's stores is expected to reach 734 by the end of 2023. This means that in the next few years, the number of Child King offline stores will greatly increase, and its coverage area will continue to sink.
Ge Wenwei stressed, "With the landing of relevant birth incentive policies, the sinking to low-tier cities dominated by third- and fourth-tier cities will definitely accelerate." ”