Low birthrate has Korean baby-wear makers turning to China

Home > Business > Industry

print dictionary print

Low birthrate has Korean baby-wear makers turning to China


The name Agabang may ring a bell - even to those without babies. Korea’s oldest baby-wear brand has been around for almost 35 years, but that might be where its legacy ends.

On Sept. 2, Agabang & Company was acquired by Lime Fashion Korea, the Korean subsidiary of the Chinese apparel company Lancy Group. Agabang’s co-president and largest shareholder Kim Wook signed an agreement to sell 15.3 percent of his share, leaving him with 2.45 percent.

But why let go of such a well-established brand with sales that reached 204.7 billion won ($195.8 million) in 2011? The answer is simple - baby clothes aren’t selling well in Korea.

There are not many babies to begin with. According to the CIA World Factbook, Korea’s birthrate is among the lowest. Of the 224 countries listed, Korea ranks 220th with 8.26 births per 1,000 people, which is less than a fourth of the highest birthrate in Niger (46.12 births).

Last year, Korea’s birthrate dropped 9.9 percent to about 436,500 births, the second-lowest record since Statistics Korea began keeping track in 1970. And Seoul is at the bottom of the ladder. Last year, the average number of children born per woman in Seoul fell below one child to 0.968. South Jeolla, the province with the highest fertility rate, was just above 1.5.

Korean brands are struggling to secure what little demand there is in the country. As making purchases online becomes easier, mothers are increasingly turning to foreign brands.

Kim Ki-hyun, 34, a mother of a 3-year-old and a 5-year-old, is no exception. She prefers to buy clothes from abroad because they are cheaper and of good quality.

“I can buy seven or eight pieces for the price of a top at Agabang or Blue Dog,” said Kim.

According to a survey by the Korea Chamber of Commerce and Industry, baby items were the fourth-most frequently purchased product on foreign websites, after clothes, shoes and fashion accessories, and health food.

The struggle isn’t limited to Agabang. Babyra, another well-known Korean baby-wear brand, filed for bankruptcy in 2011 and was acquired by the Korean underwear company Good People. Suhyang Networks, which owns several baby-wear brands such as Blue Dog and Minkmui, was acquired last year by Li & Fung, a global supply chain management firm based in Hong Kong.

Other Korean companies have begun to shift their attention to foreign markets - most notably, China. Baby care company Boryung Medience has been exporting its products to the country since 2008 and it established a Chinese branch in June last year. Its milk powder is popular in China, as is its laundry detergent for baby clothes.

Zero to Seven also established a Chinese branch in 2007. Last year, its clothing sales advanced 15.5 percent in China over 2012, while its sales in Korea decreased more than 10 percent during the same period, according to the company.

From 2009 to 2013, sales of baby items in China more than tripled, from 6.68 billion won to 25.62 billion won.

“Baby wear is an emerging market in China,” said Cui Xuehua, a researcher at Korea Investment and Securities. Only recently, the Chinese have become wealthy and demand for fashionable goods has followed, the China expert added.

“[Chinese] travel abroad and want nice things for their children … but clothing made by local producers isn’t up to par,” Cui said.

The Chinese government significantly eased its one-child policy in December, which has fueled the buying. Chinese officials have predicted that the relaxed policy could increase the number of births by up to two million per year.

The United Nations Population Division projects that between 2025 and 2030, there will be between 10.1 million and 18.3 million births in China, and between 311,000 and 618,000 births in Korea.

“With the competition intensifying, the corporations might as well look elsewhere - starting with China,” said Na Eun-chae, a researcher at Korea Investment and Securities.

BY KIM EUN-JI[eunjik@joongang.co.kr]

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now