Photo/Shetuwang

Nov. 28 (NBD) -- Stocks of Babytree which runs China's largest online parenting site opened at HK$ 6.9 (88 cents) on Wednesday, the second day of its trading in Hong Kong, valuing the company at around HK$ 11.5 billion (1.47 billion U.S. dollars).

Obviously Babytree is not the only company that eyes the huge development potential of the maternal and child market. Giants like Alibaba's Tmall and JD.com, vertical e-commerce portals including Babytree and beibei.com as well as cross-border e-commerce platforms with a focus on maternal and child products such as NetEase Kaola have entered the battle.

With the upgrading of consumption concept and the increase of consumption capability, the maternal and baby market is becoming increasingly segmented and the online retail sales of maternal and child goods are expected to reach 663.72 billion yuan (95.50 billion U.S. dollars).

Cai Rong, investment director with Eight Roads, said to the 21st Century Business Herald that after the implementation of the two-child policy, parenting and education for newborns will create a big market worth 3-4 trillion yuan (431.65-575.53 billion U.S. dollars) in 2020.

However, vertical maternal and child e-commerce sites are losing ground to Internet giants. Data from consulting firm Analysys shows that in the first three months of 2018, Alibaba's Tmall ranked first with a market share of 49.2 percent in the maternal and baby B2C sector, followed by JD.com with 19.2 percent.

With regard to the reasons, some industry insiders analyzed that some vertical e-commerce platforms provide almost identical products and services, lack a clear business model and have poor liquidity.

Strongly backed by big-name shareholders including Alibaba and Fosun International, Babytree generates its revenues mainly from advertising, e-commerce and paid content. The company runs a large portal which offers parenting knowledge base, consulting services as well as communication community. However, other sites like yaolan.com and lamabang.com provide similar services and sometimes even identical contents.

Besides, vertical portals have a hard time transferring online traffic into its customer base.

The parenting community, for instance, serves as a platform where mothers learn about parenting and search for related information, hence bringing large monthly active users to those websites.

However, customers see those parenting communities as a mere sharing channel and turn to Tmall, JD.com or brick-and-mortar stores when purchasing products. To change mothers' consumption idea and to convert online traffic into revenues remain a problem for such parenting communities.

Despite the challenges Internet behemoths pose to vertical e-commerce portals, those giants also bring resources and capitals and draw attention to the maternal and child industry, Li Songlin, industry analyst at iiMedia Research, told the 21st Century Business Herald.

Li held that be it an Internet giant or a vertical e-commerce portal, they both enjoy opportunities in the maternal and child market which is now under rapid development.

E-commerce analyst Li Chengdong believed that in future competition, it all comes down to profitability of companies, and e-commerce players without the ability to survive will be easily weeded out.

Email: gaohan@nbd.com.cn