Summary of Key Points
Lai Xiaoxin, the founder of Foshan Green Oasis Daily Necessities Company (the manufacturer of the diaper brand “Xiangshui Baobei”), has witnessed the transformation of China's maternal and infant industry from a golden age to a period of intense competition: From 2011 to 2018, the company's annual revenue exceeded 30 million yuan thanks to the benefits of the two-child policy. However, in 2019, due to a declining population, market dominance by foreign brands, and price wars on e-commerce platforms, profits hit rock bottom, forcing the company to expand overseas. They initially tested the Vietnamese market but faced setbacks due to the pandemic and fierce competition, which led them to switch to using local agents. They then targeted European and American markets (earning a 4-million-yuan order) and the African market (by establishing production lines to increase capacity). Today, 90% of the company's business is overseas, with revenue returning to around 70-80% of its peak levels. Lai Xiaoxin remains committed to registering the brand in over 40 countries, believing that the influence of “Made in China” will become more prominent by 2027.
I. Domestic Market: From Easy Profits to Intense Competition and Loss of Profitability
When Lai Xiaoxin started his business in 2011, the domestic maternal and infant industry was in its golden age, with foreign brands like Procter & Gamble and Unicharm stimulating the growth of local diaper companies. The introduction of the two-child policy in 2013 and the full implementation in 2016 led to rapid market expansion, with Green Oasis' annual revenue reaching a peak of 30 million yuan. However, this prosperity was short-lived. By 2018, the industry began to slow down, with foreign brands (such as Pampers and Huggies) occupying nearly 40% of the market share, and consumers favored them over domestic products. Additionally, price wars on platforms like Douyin and Pinduoduo significantly reduced profits. Lai Xiaoxin concluded that it was no longer feasible to operate solely in the domestic market and decided to look for opportunities overseas.
II. Entering the Vietnamese Market: Initial Success, Halted by the Pandemic and Fierce Competition
In 2019, Lai Xiaoxin organized a 300-yuan senior tourism trip to Vietnam, traveling from Dongxing in Guangxi to Ho Chi Minh City. During the day, he led groups to tourist attractions; at night, he visited maternal and infant stores and wholesale markets to promote his products. He saw similarities between Vietnam and China in the 1990s—a market with limited product variety and dominance by foreign brands, but he believed that Chinese brands had a chance to make a breakthrough. He quickly registered a company in Ho Chi Minh City, set up a warehouse, and hired eight local employees. However, the outbreak of the pandemic in late 2019 caused business to come to a halt, and the team was disbanded three months later. When he returned in 2022, he found that many Chinese companies had flocked to Vietnam due to policy incentives and geographical proximity. Fierce competition meant it was more challenging to compete locally, so they decided to hand over the brand management to local agents and focus on other markets.
III. European and American Markets: Leveraging the Strength of “Made in China” to Secure High-End Orders
In 2023, Lai Xiaoxin turned his attention to Europe and America, where the demands were higher but profits were also greater. His strategy was to collaborate with local agents, offering products at similar prices to mainstream brands while improving comfort. For example, European products of the same price range had hard textures, a problem that China had already solved. In 2023, his company obtained European certifications and secured a 4-million-yuan order. They are also exploring the American market; although the tariff process is slow, Lai Xiaoxin is confident: “The strength and innovation of ‘Made in China’ give us the ability to compete with foreign brands.”
IV. The African Market: More Than Just Selling Products—Exporting Capacity
Africa represents a promising opportunity for Green Oasis. Similar to China in the 1990s, the country has a high birth rate and an emerging economy, and there is a positive perception of Chinese brands due to various Chinese aid projects. Lai Xiaoxin’s approach is not just selling finished products but also establishing production lines in Kenya, providing raw materials, equipment, and technical expertise—essentially “exporting a small industry.” This model is more suitable for the local market and avoids price wars associated with mere product sales.
V. Transformation Results: 90% of Business Overseas, Still Betting on the Brand’s Future
Currently, 90% of Green Oasis’ business comes from overseas markets, with only a small portion remaining in the domestic market (mainly through bidding for contracts with welfare institutions). Revenue has returned to around 70-80% of its peak level, and the number of employees has been reduced by two-thirds (with overseas operations managed by partners). Lai Xiaoxin describes this as a “painful transformation and a difficult period of survival,” but he is convinced that the influence of Chinese manufacturing is gaining traction abroad. He has registered the brand in over 40 countries and says, “Although we don’t know if we will succeed, we have never given up on our goal of becoming a global Chinese brand.”
This story reflects the common challenges faced by many small and medium-sized Chinese enterprises: when domestic competition becomes too fierce, they turn to overseas markets, experiment with different strategies, and leverage the advantages of “Made in China” to find opportunities. Despite the difficulties, they continue to strive to build their own brands.