China Consumer

Baby boom

Year of the Dragon promises surge in births and baby-related profits

Enter the dragon...

Next year is the Year of the Dragon and for the millions of Chinese who follow the lunar calendar that means it is time to start planning ahead. The same goes for hospital bosses, who will be expecting a baby boom in the new year from late January onwards.

The reason? Children born under the sign of the ferocious, fire-breathing creature are expected to turn out impressively, with many going on to become successful leaders as adults. For example, China’s former paramount leader Deng Xiaoping was a dragon, born in 1904.

“The dragon’s a lucky sign,” one expectant mother in Kunming told Yunnan Television. “If you have a dragon in your house, everything will go up. Your family will get rich.’”

Forecasting just how many births will be scheduled for the year of dragon is tricky. But Cheung Tak Hong, who runs the obstetrics and gynaecology department at the Prince of Wales Hospital in Hong Kong, told Bloomberg that at least 5% more babies are born in dragon years compared to the year before.

Hospitals in China are also planning for a surge of births next year, with four new maternity hospitals opening in Beijing to cope with demand.

Amcare, a private maternity hospital in Beijing, has been increasing the number of staff and rooms that it offers over the last five years, mainly due to rising demand for better standards of hospital care.

The clinic – which is modelled more on a hotel than a hospital, with massage chairs and flat-screen televisions in each room – has already become popular among wealthier customers, with a staff member telling The Founder magazine that the hospital is booked solid for the next few months.

Amcare’s post-natal services are also designed to reflect traditional concepts. In a practice that dates back more than a thousand years, mothers often choose to spend the month after their baby’s birth in ‘confinement’ or seclusion. Traditional Chinese medical advice espouses a minimum of activity, with mothers sometimes advised not to go outside, nor take a bath or even brush their teeth.

Typically, relatives will take care of new mothers but more recently the practice has been outsourced to so-called confinement centres, similar to the one that Amcare operates.

At Amcare’s post-natal centres, helpers take care of everything from changing nappies to preparing meals that comply with the principles of traditional Chinese medicine (for instance, raw food is not allowed because it is thought to delay the return of the uterus to its former size).

Needless to say, Amcare’s five-star service does not come cheaply. The hospital charges a minimum of Rmb50,000 for each delivery and then a further Rmb100,000 for postnatal cooking and caring services.

“Chinese couples are getting richer, so they can hire people to help them,” explains Xu Yun, founder of Yuezixixi, another privately-owned confinement venue.

For makers of baby food and nappies, the Year of the Dragon should also be an auspicious one. Market research firm Euromonitor reckons that China’s diaper market will reach Rmb28.4 billion in revenues next year , up from Rmb24.3 billion in 2011. And the baby-food market is expected to double to Rmb136 billion by 2015. “The baby boom is a good investment idea in the near term,” says Jessie Guo, head of consumer research for Jefferies Group in Asia.


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