It remains uncertain how much Beijing’s policy shift can boost China’s birthrate, but Mami Zhidao founder Liang Liang and other entrepreneurs say they have high hopes for the business of catering to mothers and children. Last week on Singles’ Day—China’s equivalent of the Black Friday and Cyber Monday shopping events in the U. S.—the baby-goods category was among the top performers on Alibaba Group Holding Ltd.‘s online marketplaces.

Venture capitalists say startups focusing on baby goods and services have potential to grow even as China’s economy slows, because of strong demand for safe, high-quality baby supplies. While other Internet ventures are finding it harder to raise capital, baby-products startups are getting backing from prominent investors, such as Sequoia Capital China. Baby-goods shopping sites Beibei and Mia.com reached $1 billion in valuation in their latest fundraising rounds, as did Lamabang, a social network for young moms.

“The market is growing. Younger generations are getting richer and they want better services,” says Mr. Liang, who founded Mami Zhidao last year. It has since attracted two million users and backing from a venture-capital arm of Japanese telecommunications company SoftBank Group Corp.

Research firm Analysys forecasts China’s market for businesses that serve mothers and babies—online and offline—will increase 15% to $244 billion this year and more than double by 2020.

Analysts forecast growth for the baby-related market even if Beijing’s policy shift doesn’t boost the birthrate significantly, because middle-class parents are willing to spend more on better products and services—especially through online channels, where such products are easier to come by than in China’s brick-and-mortar stores.

The market has caught the attention of the country’s biggest online-shopping companies, Alibaba and  JD.com Inc., which are offering more imported baby goods on their sites. Demand is fueled by concerns over the safety of domestic products, lingering from a tainted-baby-formula scandal that shook China in 2008. Infant formula and baby food are among the most popular items for Chinese shoppers buying goods from overseas. According to a survey by iResearch, 75% of such online shoppers said they have bought baby formula at least once.

Source: The Wall Street Journal