Online retailers enjoy success by operating offline family theme parks

Wang Xi, 32, a white-collar worker in Xi'an, Shaanxi province, often takes her 3-year-old daughter to a recreation park in a shopping mall at weekends. While there, her daughter can play games, draw pictures and attend classes.

The indoor amusement park named Mialand is operated by an e-commerce platform, mia.com, which is primarily engaged in selling maternity and baby products online. The company plans to open more than 30 Mialands－indoor theme parks for children aged from 0 to 12－in major cities across the country by the end of this year.

China's maternal and infant goods e-commerce platforms are investing heavily and speeding up their steps to expand offline channels, such as opening indoor theme parks for children or brick-and-mortar stores, to seek new business growth avenues and enhance their "stickiness" among consumers.

Founded in 2011, mia.com offers flash sales of discounted imported diapers and baby formula on its online platform. It established partnerships with Amcare Corp, a leading private women and children's hospital chain in China, in 2016, enabling mia.com to reach more parents and would-be parents.

The company launched its first offline children's park in Beijing in July, 2016. While children are playing and making friends, parents can buy these products directly at the store or place an order online. The park adopts two models: the direct-sale store and franchised outlet.

"The market for baby and mom products in China is breaking boundaries by means of 'New Retail' business model, which integrates online with offline shopping, and provides a refreshing shopping experience," said Liu Nan, founder and chief executive officer of mia.com.

"On one hand, online retailers could open brick-and-mortar stores, and on the other hand, physical stores could depend on the supply chain advantage of e-commerce platforms."

Mia.com is dedicated to helping middle-class families access the best mom and baby products, such as diapers, baby formula, toys and garments for babies and toddlers from abroad, in anticipation of a baby boom in the wake of the relaxation of China's family-planning policy.

Liu added there is a lot of potential for growth in the market for baby and mom products.

"It is high time we expand to offline channels as well, as more than 50 percent of sales are generated by brick-and-mortar stores."

The Beijing-based company is now purchasing 40 theme parks owned by Yuyuto Shanghai Entertainment Facilities Co Ltd in Beijing, Shanghai, Guangzhou and some second-tier cities.

Mia.com said there is a natural advantage for them to develop children's theme park as the company has accumulated abundant big data resources from tens of millions of users, which can provide a large number of reference information about where to set up the parks.

For instance, the company can count the number of mia.com users in a given area and the ages of their children, and the distance of their residence to a particular shopping mall.

Moreover, it is noteworthy that mia.com has an eye on expanding its offline theme parks in third- and fourth-tiers cities, as the competition in the first-tier cities is increasingly fierce.

According to the Beijing-based internet consultancy Analysys, the market for maternal and infant goods in China has witnessed rapid growth, reaching 2.7 trillion yuan ($430 billion) in 2017. The size is expected to reach 3 trillion yuan in 2018.

Daniel Wei, general manager of mia.com's offline business, said that in the past, indoor theme parks in China were homogenized, the customer experience was insufficient and the industry threshold was low.

He added that with the upgrade of consumption, there's growing demand for high-quality indoor theme parks or amusement parks in line with the international standard.

China's second-largest e-commerce platform JD said its offline franchise operating organization JD Baby Beiquan aims to open 5,000 stores in the next three years, with its sales revenue surpassing 100 billion yuan by 2020.

The brick-and-mortar stores will utilize JD's advantages in big data, supply chain and cutting-edge technologies to offer integrated solutions covering intelligent retailing, early education, amusement and prenatal and postnatal guidance for mothers.

Moreover, Redbaby, a maternity and infant goods e-commerce website owned by Suning Commerce Group Co Ltd, is speeding up its expansion in offline stores. It is estimated the total number of its brick-and-mortar stores will reach 503 by 2020.

The newly added stores will integrate the sales of infant goods with the children's entertainment facilities, and expand into the third- and fourth-tier cities, Suning said.

"Parents often take their children out to play at weekends, and it is very natural that some maternal and infant goods e-commerce platforms have layouts in children's amusement facilities considering offline consumption upgrading, especially the strong demands from third- and fourth-tier cities," said Cao Lei, head of China's E-Commerce Research Center.

Cao added this is a trend for the maternal and children's supplies industry. As the children's parks are heavy-assets projects, the franchises should have abundant capital.

"The online retailers should have strict requirements for franchise investors, and pay attention to their brands protection."

Zhou Changqing, the general manager of real estate services provider RET's Shanghai company, said e-commerce platforms engaged in selling maternal and infant goods own a specific customer base and unique sales channel, and could leverage that to provide comprehensive services and products.