Baby’s Cry or Coffers Ringing
By: Gauri Kuchhal
Tags: Industry Insights, Investors, Venture Capital, Baby Care, Venture Capitalist

An Insight into the booming Babytech industry!

With 51 births each minute, India is the world’s largest child producing nation and has the rare distinction of a country with the maximum number of children households around the globe! India is on its way to overtake China as the most populous country by 2027, which is well before the earlier estimates. It is trying to slow down the population growth rate but not fast enough to not wear this crown. Though, as per ourworldindata.org data, India has peaked the population growth rate, but the absolute numbers are still very lucrative for the businessmen and marketers.

The following chart gives a good idea about India’s population projection for the next 80 years:

Source: UN Population Division, Our World in Data

The chart highlights the birth rate flattening between 2020 and 2030, and then it’s going down, but the number of children under 5 years of age is just a little shy of 200 million. When we combine these numbers with growth in disposable income, we have a match made in heaven opportunity for companies to innovate and extend offerings for some serious megabucks.

Many Indian millennials may be delaying or opting out of childbearing, but those who have committed to parenting often go all out to ensure that their children grow up healthy, have everything within hand’s reach and do well in academia, extracurricular activities, and sports as well. This motivation is further fortified with guilt they carry of not spending enough quality time with their kids, given the demanding jobs, digital devices, and time crunch.

This presents a unique confluence of opportunities for companies to share the responsibility of nurturing with parents by offering innovative products and services to them. The advent of technology and in the race to make things accessible, more comfortable, and faster, start-ups are exploring every need of the parent and child. Though aptly named the ‘baby tech,’ but; this industry is anything but a baby.

The following figure encapsulates the action in this space in the last 5 years:

Source: Tracxn

The “BabyTech” space is defined as “companies developing tech-enabled products and services that primarily serve babies and children up to 12 years old, and or along with their parents”.

One of the major factors driving the growth in this space is “Content,” which roughly translates to search for information to do better and more for the children. Digital connectivity and ease of communication have given the right freedom and tools to parents to search for content. Just a pure product play might not cut the ice for the new companies; they must create content to establish that trust, which leads to a product purchase. This defines the funnel for new brands. A gamut of opportunities has already been discovered on a global level, and more are being identified.

Source: CB Insights, Tracxn

In China, convenience and fashion are more important to today’s young mothers than to those from previous generations. Coupled with a growing disposable income that these mothers are partly spending on Mother & Baby products, new market sub-sectors are being created to meet their needs, such as skincare products for pregnant women, a market predicted to be worth RMB 4.7 billion (GBP 540.2 million) by 2022[1].