Uplifted One Child Policy Results in Lower Pharmacy Sales, Increased Baby Sales

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pharmacy

China has always had great sales when it comes to pharmacy needs. This is even true with online shopping, now that Alibaba does offer several products that are available at your local pharmacy minus the grief of having to go to the store to get this for yourself. However, there has come a shock to the pharmacy market that has resulted in profits lost.

Recently, China abandoned their one child policy in hopes of making their family laws just a bit more lenient. This policy had been in effect since 1979 when China wanting to stop a huge population that was considered in poverty. So how has this affected the pharmacies in China? They are seeing drops in sales when it comes to condoms and other methods of pregnancy prevention, while sales for baby related products are skyrocketing.

Pharmacy Loss with Pregnancy Prevention Methods

Since this policy has been taken away, the rush for condoms has greatly decreased. In fact, the Japanese brand Okamoto Industries, who produces condoms and was often considered the go-to company for Chinese consumers saw their sales slump by 10% since this announcement. Why?

Professionals are already indicating that without this policy in effect, there are going to be many births that will happen as soon as possible. In fact, they estimate that in a five year period, starting in 2017, there will be an extra 3 to 6 million babies born in China. Currently, China has around 16.5 million births per year as it is.

The Winner with Policy Changes

With the new policy changes, manufacturers of baby products are becoming the real winner. Companies located in Hong Kong and mainland China that produce infant formula have already seen their stock increase by 10%. Diaper companies also saw their stocks increase. Due to so many Chinese consumers wanting products from other countries when it comes to their children, even other countries are reporting gains for their companies. For example, the local dollar in New Zealand gained 1% after this announcement. New Zealand ships in several baby related products like formula to China via the online shopping channels.

Though the policy was meant to allow Chinese citizens to have more choices and freedoms, it seems that it has greatly affected pharmacies throughout China, including those that are online. Are these changes going to be permanent? This is a question being asked by many and as of right now, no one can state whether this will be permanent or not.

 

About Author

Social Brand Watch (SBW) is a collection of experts in digital, mobile and social media in China. SBW was created to complement Resonance's China Social Branding Report, a bi-weekly report focusing on modern marketing methods of the world's top brands in China.

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