Companies catering to children, including makers of dairy products, are being forced to adapt their business models in the face of a declining birthrate and an aging population.
The annual number of newborn babies fell from 640,000 in 2000 to an all-time low of 357,000 last year, and demographers forecast it may go below 300,000 by the early 2020s. This is bad news for child-related businesses, many of which have already started to diversify their business into other sectors.
Dairy companies have been badly affected. The average annual consumption of white milk per person dropped from 30.8 kg in 2000 to 26.6 kg last year. To beat the downturn, Maeil Dairies will launch milk-powder products next month targeting the middle-aged and the elderly. The dairy maker already released nutrient-added drinks and cereal bars aimed at aging consumers who experience loss of muscle mass.
Namyang Dairy Products is undergoing a similar transformation. The dairy maker set up a coffee factory in Naju, South Jeolla Province in 2012 and started producing ready-to-drink, chilled cup coffee products. It also sells baby snacks and freeze-dried fruits.
Former stationery giant Barunson has completely changed its business models, having sold its entire stationery division in 2014. It started operating a restaurant chain in 2010, and is now concentrating on investments in the film and game industries. Another big stationery company, Monami, now runs an online store selling pet products.
Yuhan-Kimberly, whose main business used to be baby diapers, has expanded its product range to target the elderly since 2012. Disposable sanitary pads for the elderly, which used to be primarily available in hospitals, are now more widely used by adults suffering from incontinence.
Such trends have already been seen in other countries that experienced population aging before Korea.
Cho Young-tae at Seoul National University said, "By 2020, the market for baby and toddler products will shrink to about 75 percent of the level recorded in 2016, so the time has come for companies to take demographic changes into account to survive in a rapidly changing business landscape."