According to the 2022 Maternal and Infant Industry Observation Mid-Year Report, in the first half of 2022, 46,000 companies closed down. Thirty thousand maternity and baby stores closed. Companies with less than six months of cash flow reached 48.5%.
In 2021, China’s maternity and child market’s scale reached 4.9 trillion. Such a large market has encountered many problems besides the pandemic.
For example, a mother and baby store with over 6,000 franchised stores, announced its closing due to the pandemic.
Under the influence of the pandemic, most maternity and child stores had almost no income in the first quarter, and 80% of the transactions were online.
However, the pandemic is not the only troubling issue. There are many internal problems for mother and baby brands.
Mia, a unicorn in maternity and child e-commerce, closed all offline stores in September. But the main reason is that customers complain about the quality of the products. The pacifiers smell of glue and were deformed after being boiled. The clothes were of poor quality and could not be returned.
Moreover, franchise issues and price wars between franchisors have resulted in financial losses. The price system is in disorder, directly affecting the consolidation of channels, brands, and supply chains.For example, the brand recruited two franchises in the same area, resulting in a price war. In addition, the brand promised $42,000 (300,000 yuan) to open a store, but the franchisee invested $70,000 (500,000 yuan).