1. Expected Baby boom to create massive opportunity for Mom & Baby Care segment
With the onset of COVID induced lockdowns, millions of beneficiaries who were dependent on family planning clinics for contraceptives stopped visiting them. This has contributed to the reversed trend in births per year, Indonesia now expects a 9% increase in total births in 2021. These unexpected births translate into an opportunity for the Mom & Baby care segment to grow.
2. Online players are better positioned to capture the emerging opportunity : > USD 1 Bn to be added to Online Mom & Baby care segment over next 5 years
The pandemic induced norm of social distancing, will contribute to the increase in the online share of Mom & Baby Care market and online penetration levels could increase from 3-4% now to 10%+ in 2025, adding more than a Billion dollars of value in the next 5 years.
Key value proposition (product variety & convenience) of the Online channels address the main pain points consumers face with offline channels.
Additionally, Indonesia is witnessing a growing population of New age moms who are active users of Social Media platforms and are looking forward to becoming a part of online mom groups and follow ’mom-fluencers’ to seek and share their experiences and advice. This creates more opportunities for online channels in the form of content, community and experiences.
Online Penetration of Categories, CY2020 vs 2025, %
3. The competition between horizontals and verticals is tight; Verticals must leverage content, community and experience to drive a differentiated value propositiont
Among online platforms, Horizontals score better on price, variety, and delivery experience while verticals are perceived to have better product quality.
Horizontals also enjoy a high TOMA (96%) for online childcare products.
However, new parents have a wide range of product and service needs for each stage of their child’s development. Verticals are well-positioned to drive a more differentiated experience by extending their offerings beyond just product purchases.
Current leaders in the Vertical space like Orami have a dedicated community for mothers, events, and specially curated content in association with the Indonesian Paediatrician Association, making it a one-stop shop for all your Mom & Baby needs. Package deals and subscription measures will gel well with such a wide array of offerings to lock the customer in.
Note: Orami recently got acquired by Sirclo, an e-commerce enabler, which will strengthen its Omnichannel services for brands and SMEs.
We believe that massive potential remains to be unlocked in the Online Mom & Baby care market. While horizontals will continue to command a strong market share in it, Verticals too are well placed to capture a sizable chunk of the opportunity. We could see some strong winners emerge here over the next 2-3 years.
Customer Parameter, NPS, n=196
Note: 1 Horizontal eCommerce players are those that offer products from large number of categories while Vertical players are specialists and only offer products from a particular category/segment