Kids play while mothers buy - and companies prosper

Online children's retailers see new growth potential in operating brick-and-mortar family theme parks

Wang Xi, 32, a white-collar worker in Xi'an, Shaanxi province, often takes her 3-year-old daughter to a recreation park in a shopping mall at weekends. There her daughter can play games, draw pictures and attend classes.

The indoor amusement park, named Mialand, is operated by an e-commerce platform, Mia.com, which mainly sells maternity and baby products online. The company plans to open more than 30 Mialands - indoor theme parks for children up to age 12 - in major cities across the country by the end of this year.

China's e-commerce platforms for maternal and infant goods are investing heavily and speeding up expansion of their offline channels - such as opening indoor theme parks for children or brick-and-mortar stores - as they seek new avenues for growth and enhance their "stickiness" among consumers.

Founded in 2011, mia.com offers flash sales of discounted imported diapers and baby formula on its online platform. It established partnerships with Amcare Corp, a leading private women and children's hospital chain in China, in 2016, in order to reach more current and would-be parents.

The company launched its first children's park in Beijing in July, 2016. While children are playing and making friends, parents can shop in the store or place orders online. The park adopts two models: the direct-sales store and the franchised outlet.

"The market for baby and mom products in China is breaking boundaries with the 'New Retail' business model, which integrates online with offline sales and provides a refreshing shopping experience," says Liu Nan, founder and chief executive officer of mia.com.

"On the one hand, online retailers can open brick-and-mortar stores, and on the other, physical stores can depend on the supply chain advantage of e-commerce platforms."

Mia.com says it is dedicated to helping middle-class families access the best mom and baby products, such as diapers, baby formula, toys and garments for babies and toddlers from abroad, in anticipation of a baby boom in the wake of the scrapping of China's one-child policy.

Liu says there is a lot of potential for growth in the market for such products.

"It is high time we expanded into offline channels as well, as more than 50 percent of sales are generated by brick-and-mortar stores."

The Beijing-based company is now purchasing 40 theme parks owned by Yuyuto Shanghai Entertainment Facilities Co Ltd in Beijing, Shanghai, Guangzhou and some second-tier cities.

Mia.com says there is a natural advantage in developing children's theme parks, as the company has accumulated abundant big data resources from tens of millions of users, which can provide a lot of information on the best places to set them up.

For instance, the company can count the number of mia.com users in a given area, the ages of their children and the distance of their homes from a particular shopping mall.

It is noteworthy that mia.com has an eye on expanding its theme parks in third- and fourth-tier cities, as competition in the first-tier cities proves increasingly fierce.

According to the Beijing-based internet consultancy Analysys, the market for maternal and infant goods in China has witnessed rapid growth, reaching 2.7 trillion yuan ($430 billion; 354 billion euros; ￡311 billion) in 2017. The market size is expected to reach 3 trillion yuan in 2018.

Daniel Wei, general manager of mia.com's offline business, says that in the past, indoor theme parks in China were homogenized and customer experience was inadequate.

He says that, with the upgrade of consumption, there is a growing demand for high-quality indoor theme parks or amusement parks in line with international standards.

China's second-largest e-commerce platform, JD, says its offline franchise-operating organization, JD Baby Beiquan, aims to open 5,000 stores in the next three years, with sales revenue surpassing 100 billion yuan by 2020.

The brick-and-mortar stores will utilize JD's advantages in big data, supply chain and cutting-edge technologies to offer integrated solutions covering intelligent retailing, early education, amusement, and prenatal and postnatal guidance for mothers.

Redbaby, a maternal and infant goods e-commerce website owned by Suning Commerce Group Co Ltd, is speeding up its expansion in offline stores. It estimates the total number of its brick-and-mortar stores will reach 503 by 2020.

The new stores will integrate sales of infant goods with children's entertainment facilities, and expand into the third and fourth-tier cities, Suning says.

"Parents often take their children out to play at weekends and it is very natural that some maternal and infant goods e-commerce platforms should have layouts featuring amusement facilities, considering that offline consumption is upgrading, especially with strong demand from third and fourth-tier cities," says Cao Lei, head of China's E-Commerce Research Center.

Cao says this is an industry-wide trend and, as children's parks require many assets, franchisees should have abundant capital.

"The online retailers should have strict requirements for franchise investors and pay attention to protection of their brands."

Zhou Changqing, the general manager of real estate services provider RET's Shanghai company, says e-commerce platforms engaged in selling maternal and infant goods have a specific customer base and unique sales channels, which they can leverage to provide comprehensive services and products.

"However, operating a children's theme park needs some management experience and knowledge, and we still need to guide online users into the brick-and-mortar stores," Zhou says.

fanfeifei@chinadaily.com.cn

(China Daily European Weekly 05/04/2018 page26)