{"id":62636,"date":"2025-08-06T12:56:13","date_gmt":"2025-08-06T12:56:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/62636\/"},"modified":"2025-08-06T12:56:13","modified_gmt":"2025-08-06T12:56:13","slug":"are-businesses-ready-for-gen-z-parents","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/62636\/","title":{"rendered":"Are businesses ready for Gen Z parents?"},"content":{"rendered":"

This report is from this week’s edition of CNBC’s The China Connection newsletter, which brings you insights and analysis on what’s driving the world’s second-largest economy. Like what you see? You can subscribe\u00a0here.<\/a><\/p>\n

A parent walks down the street holding a child in Hangzhou, China, on Jan. 17, 2025.<\/p>\n

Costfoto | Nurphoto | Getty Images<\/p>\n

Hello, I am Anniek Bao, a Singapore-based reporter writing about China’s economy and business, filling in for Evelyn this week. Welcome to another edition of The China Connection.<\/p>\n

This week, I look at how businesses eyeing China’s $644 billion baby-care market are meeting a new generation of parents \u2014 shaped by modern parenting values and spending habits.<\/p>\n

The big story<\/p>\n

From makers of baby strollers to coding apps, Chinese companies are facing a new kind of customer: the Gen Z parent, with different ideas about raising children and spending on them.<\/p>\n

China’s young parents are digital-natives, have a global outlook and prefer experiential learning. That mindset is shaping how \u2014 and where \u2014 they spend.<\/p>\n

“When you have younger, more digital, international and cosmopolitan parents, their spending patterns are very different [from those of older generations],” said Joe Ngai, chairman of Greater China at McKinsey & Company. Many now prioritize children’s experiences, such as golf lessons and ski trips, he added.<\/p>\n

“We are seeing more spending on the per-kid level, [creating] a more premium market,” said Ngai. Businesses catering to enrichment programs, extracurricular activities and family-centered travel are set to benefit the most, he said.<\/p>\n

For businesses selling baby formula, cribs, or maternity wear, lower fertility rates have been a drag on growth, still China in 2024 saw nearly three times as many newborns year as the U.S. \u2014 a scale that makes its baby-care sector a prize too big to ignore.<\/p>\n

The baby-care and maternity market was estimated to reach 4.63 trillion yuan (about $645 billion) in 2025, representing around 7% annual growth rate, according to an industry report by iResearch in February<\/a>.<\/p>\n

The initial boost from Beijing’s stimulus will likely be seen in baby-care and maternity products, before expanding into areas such as pediatric healthcare, early childhood education, insurance products tailored to minors, and technology services designed to support family life.<\/p>\n

“Think strollers and formula today, but pre-K, private tutoring and family travel tomorrow \u2014 all the way to digital learning tools [such as coding apps] and smart parenting apps,” said Han Shen Lin, Shanghai-based China Country Director at business consultancy The Asia Group.<\/p>\n

Demanding and selective<\/p>\n

Parents are also becoming more selective and demanding when it comes to what they buy.<\/p>\n

Before committing to a product, the younger Chinese parents tend to spend more time comparing options, scrutinizing details and seeking out peer reviews online, said Andy Li, principal at Oliver Wyman in Shanghai. “New parents have become more discerning.”<\/p>\n

That has raised the bar for brands as it’s no longer enough to offer quality, companies must also explain why their products stand out.<\/p>\n

“How to differentiate your proposition, your products against other players in the market has been a major challenge,” Li said, noting that giving parents more transparency into what they are buying, especially when it comes to nutrition ingredients, will drive first purchase, ensure retention and brand loyalty.<\/p>\n

That heightened awareness plays into long-standing concerns over product safety in China \u2014 an issue still resonating with Chinese parents nearly two decades after an infant formula scandal in 2008.<\/p>\n

“For middle-class families still haunted by the 2008 infant formula scandal, many continue to choose foreign brands,” said Yaling Jiang, a China-focused independent consumer analyst.<\/p>\n

In a sign of how quickly public sentiment can shift, driven by the tech-savvy parents, some domestic baby-care brands raised prices days after Beijing rolled out new family subsidies, drawing a swift backlash on social media.<\/p>\n

The price of one brand of baby wipes jumped from 39 yuan on July 31 to 119 yuan on Aug. 1, according to Manmanmai, an e-commerce price tracker, while a local formula powder’s price leapt more than 50% in days.<\/p>\n

Young parents accused companies of “ripping off the subsidies” before the money had even arrived, with some calling for boycotts. Several brands have since apologized<\/a>, describing the increases as periodic adjustments.<\/p>\n

But that backlash highlights a generational shift: Gen-Z parents are value-driven, social media-savvy and quick to call out brands they believe cross the line.<\/p>\n

Beijing’s push<\/p>\n

In a first for the country, China last month launched a nationwide child-rearing subsidy program<\/a>, handing out 3,600 yuan ($503) a year for every child under three. It was the first time Beijing extended such subsidy for the firstborn child, with past measures targeting couples with second or third child.<\/p>\n

The government is betting on the subsidy to reduce the financial strain of parenting and ease what it calls the “fertility anxieties” of young couples.<\/p>\n

Separately, Beijing on Tuesday announced tuition fees waiver for children in their final year at public preschools and some private kindergartens<\/a>, starting as soon as the upcoming fall semester.<\/p>\n

The measures supplement China’s efforts to reduce childcare costs at a time when the country is staring at a demographic crisis, fueled by a slide in birth rates.<\/p>\n

China has seen three consecutive years of population decline<\/a>, and seven consecutive years<\/a> of birth rate declines, with a modest rebound in 2024<\/a>. Muted birth rates also stem from an alarming drop in marriage rates, which fell to the lowest level in almost half a century last year with just 6.1 million new couples<\/a>.<\/p>\n

\"Made <\/a><\/p>\n

Births dropped to 9.7 million last year \u2014 a little over half from the 18.8 million in 2016 when China scrapped its one-child policy that had restricted the size of families \u2014 according to Economist Intelligence Unit’s estimates based on official data, while the fertility rate is just above 1.0.<\/p>\n

Fertility rate refers to the average number of children a woman would have in her lifetime.<\/p>\n

In recent years, China has raised its birth quota to three per couple, introduced tax breaks for childcare and moved to curb after-school tutoring costs. Local officials have tested even bolder incentives, from 10,000 yuan first-baby bonuses<\/a> in Inner Mongolia to monthly stipends for larger families<\/a> in Shenyang.<\/p>\n

But experts say financial incentives alone aren’t enough to change minds, particularly among educated women in urban cities, who have continued to face tough choices between career progression, high childcare cost and the burden of eldercare.<\/p>\n

Millennials and Gen Zs are also part of the so-called “sandwich generation,” balancing care for both aging parents and young children. “When you’ve still got elderly parents to support because there’s not a particularly supportive pension system, then a lot of your incomes going up there, rather than, starting your own family,” said Harry Murphy Cruise, head of economic research at Oxford Economics.<\/p>\n

The cost of raising a child until they are 18 relative to per capita GDP is around 6.3 times in China versus 4.11 times in the U.S., according to a population research think tank<\/a>.<\/p>\n

Hiring help in tier-1 cities like Shanghai has also been priced out of reach for most dual-income households, said Asia Group’s Lin.<\/p>\n

“For highly-educated, single millennial and Gen Z women who haven’t had children, there’s a growing awareness of the mental and physical burdens that come with marriage and childbirth,” said Jiang.<\/p>\n

The 3,600 yuan subsidy only covers the cost of about 10 cans (800 to 900 grams each) of infant formula, she pointed out.<\/p>\n

For now, Beijing’s bet is that a little extra cash in parents’ pocket \u2014 and the spending it triggers \u2014 might at least give the country’s birth rates a short-term boost, even if it doesn’t produce a baby boom.<\/p>\n

Top TV picks on CNBC\"China's<\/p>\n

George Chen, partner and co-chair of digital practice at The Asia Group, said that Nvidia CEO Jensen Huang is following Apple CEO Tim Cook’s playbook in navigating U.S.-China tensions.<\/p>\n

\"Is<\/p>\n

Neil Thomas from Asia Society unpacked what matters most to China’s President Xi Jinping and why he’s seemingly absent on a global stage.<\/p>\n

\"China<\/p>\n

Winnie Wu, chief China equity strategist of BofA Securities, explained why she thinks investors shouldn’t chase the recent rally in the China markets.<\/p>\n

Need to know<\/p>\n

China’s BYD posted its first decline in monthly deliveries.\u00a0In July, the leading Chinese EV maker\u00a0shipped 341,030 units<\/a>, around 10% lower than 377,628 in June. Domestic competitors Li Auto and Nio also recorded a drop in deliveries.<\/p>\n

Nvidia denies China’s accusation that its chips have a ‘kill switch.’\u00a0The Cyberspace Administration of China said last week that it needed Nvidia to provide documents on what it called\u00a0vulnerabilities in the firm’s H20 AI chip<\/a>, which is\u00a0targeted at the Chinese market.<\/p>\n

Chinese text-to-video AI models are topping scoreboards.\u00a0TikTok parent ByteDance hold the first and third spots<\/a> in research firm\u00a0Artificial Analysis<\/a>‘ top-ranked text-to-video generative AI models, while Beijing-based\u00a0Kuaishou’s<\/a>\u00a0Kling AI ranks fifth.<\/p>\n

\u2014 Yeo Boon Ping<\/p>\n

In the markets<\/p>\n

Mainland China and Hong Kong stocks inched higher amid mixed trading in the region as investors digested fresh tariff comments from U.S. President Donald Trump.<\/p>\n

Mainland China’s\u00a0CSI 300<\/a>\u00a0is up 0.18%, while Hong Kong’s\u00a0Hang Seng Index<\/a>\u00a0\u2014 which includes major Chinese companies \u2014 had gained 0.17% as of 12:19 p.m. local time (12:19 a.m. ET). The mainland benchmark is up 4.28% year to date, data from LSEG showed.<\/p>\n

\u2014 Lee Ying Shan<\/p>\n

Stock Chart IconStock chart icon\"hide<\/p>\n

The performance of the Shanghai Composite over the past year.<\/p>\n

Coming up<\/p>\n

Aug. 7: Trade data for July<\/p>\n

Aug. 8-12: World Robot Conference 2025<\/p>\n

Aug. 9: CPI, WPI for July<\/p>\n","protected":false},"excerpt":{"rendered":"This report is from this week’s edition of CNBC’s The China Connection newsletter, which brings you insights and…\n","protected":false},"author":2,"featured_media":62637,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[550,28,122,144,101,2344,4633,5103],"class_list":{"0":"post-62636","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-beijing","9":"tag-business","10":"tag-business-news","11":"tag-china","12":"tag-economy","13":"tag-india","14":"tag-shanghai","15":"tag-world-economy"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/62636","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=62636"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/62636\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/62637"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=62636"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=62636"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=62636"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}