China’s extra kids mean business

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The end of China’s one-child policy will result in big changes in what that country’s consumers will buy. Bobbi Rebell reports.

China’s extra kids mean business

One and done no more.

China is ending its one-child policy. Families can now have two kids. The change in Chinese consumer spending will be dramatic.

Savio Chan heads consulting firm U.S. China Partners and is the author of “China’s Super Consumers.”

(SOUNBITE) SAVIO S. CHAN, PRESIDENT & CEO, U.S. CHINA PARTNERS, INC. (ENGLISH) SAYING:

“They may buy less iPhone and Samsung, they may buy a Xiaomi phone, the cheaper local version, one third the price and switch the budget maybe to that baby food product, maybe entertainment..”

Chan cites Disney as an example.

He also believes e-commerce companies and delivery businesses, like UPS and Federal Express, will see more business, because families with more kids will be time pressed and order more online.

Among the sectors whose stocks got a boost after the news: baby formula.

Synutra International sells baby formula mainly in China. Abbott Labs sells Similac in China. Mead Johnson owns Enfamil and got 31 percent of its net sales in China last year.

But that may be an overreaction according to at least one analyst who said it will take time to change China’s one-child mindset.

Many couples that could have had a second child under relaxed rules in 2013 decided not to for economic reasons.

Tags : Business, Mean, kids, Extra, Chinas

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