I. Industry Risk Analysis

(1) Policy Risk

The baby diaper industry currently faces policy cycle risks:
– During the policy – formulation stage, the rapid upgrade of environmental protection regulations promotes the mandatory replacement of degradable materials, forcing enterprises to undergo short – term technological transformation.
– In the policy – implementation stage, the differential law enforcement of local departments on standards such as hygiene and safety and antibacterial additives may lead to fluctuations in the passing rate of spot checks.
– At the policy – evaluation stage, public opinions on the quality of baby products may trigger sudden industry rectifications. For example, the detection standards for controversial parameters such as fluorescent agents and formaldehyde residues may be suddenly tightened.
– In the policy – adjustment stage, the “tax incentives for mother – and – baby products” that enterprises originally enjoyed may be cancelled due to the revision of the industrial catalog, resulting in a 10% – 15% increase in comprehensive costs. Enterprises need to establish a policy – tracking team and maintain a 6 – 12 – month technological reserve redundancy in terms of raw material replacement and the upgrade of the detection system.

(2) Economic Risk

Amid economic cycle fluctuations, the baby diaper industry faces dual squeezes from the demand side and the cost side:
– On the one hand, during an economic downturn, the disposable income of families decreases. Consumers turn to low – cost substitutes or reduce stockpiling, leading to a contraction in the market for mid – and high – end products.
– On the other hand, the prices of raw materials (such as petroleum derivatives and super absorbent polymers) are significantly affected by cycle fluctuations. Coupled with the rising logistics costs, the profit margins of enterprises are compressed. Meanwhile, the long – term trend of the continuously low birth rate and the short – term economic recession have a superimposed effect. The market increment shrinks, and the industry is forced to enter the stage of stock competition. New entrants face a red – ocean market with high brand loyalty and strong channel barriers. The customer acquisition cost rises significantly, and the risk of short – term cash – flow pressure intensifies.

(3) Social Risk

The baby diaper industry faces the social risk of a generational gap in consumption concepts:
– The new generation of parents born in the 1990s and 2000s pay more attention to the technological content of products (such as breathable and antibacterial technology), environmental protection attributes (degradable materials), and emotional added value (IP co – branded designs), while traditional enterprises still rely on the “low – price and large – quantity” model.
– The refined parenting of young parents has given rise to a high – end niche market. However, affected by the decline in the birth rate, competition in the mid – and low – end markets has intensified, resulting in price slashing.
– The generational differences in health awareness mean that new brands need to bear higher market education costs. They not only need to break through the cognitive barrier of the older generation that “diapers affect development” but also meet the laboratory – level requirements of Generation Z for ingredient safety (0 fluorescent agents).

(4) Legal Risk

As entrepreneurs, those in the baby diaper industry face multiple legal risks:
– Product quality must comply with mandatory standards such as the “Safety Technical Specification for Infant Diapers.” Excessive chemical residues in materials or design defects will lead to product recalls and claims.
– If advertising uses unverified medical claims such as “antibacterial” and “zero – irritation,” it may violate the “Advertising Law” and result in fines.
– The production process must comply with environmental protection regulations. Improper disposal of waste polymer materials will lead to environmental administrative penalties.
– If product packaging lacks ingredient lists, warning signs, or execution standard numbers, it may constitute consumer fraud.
– The risk of patent infringement in product design is relatively high. Imitating the styling of international brands is likely to lead to intellectual property litigation.
– When collecting sensitive information such as users’ height and weight in e – commerce operations, if the data encryption and authorization mechanisms required by the “Personal Information Protection Law” are not implemented, enterprises will bear legal liability for data leakage.

II. Entrepreneurship Guide

(1) Suggestions on Entrepreneurship Opportunities

Entrepreneurs can focus on the development of baby diapers made of organic and environmentally friendly materials, using degradable materials such as bamboo fiber and corn starch to meet the needs of the mid – and high – end markets. They can also combine intelligent hardware to launch technological diapers with functions such as humidity sensing or excretion reminders, and achieve precise care through Bluetooth connection to an APP. For infants with allergic constitutions, a product line of low – sensitivity and antibacterial patented fabrics can be developed, and cooperation with hospitals can be established. The DTC model can be used to create a subscription – based service, integrating users’ weight data to design phased product combinations. Trust – based consumption scenarios can be built on platforms such as Xiaohongshu through mother – and – baby KOLs. At the same time, emerging markets in Southeast Asia can be targeted to gain an increase in price – sensitive users.

(2) Suggestions on Entrepreneurship Resources

Entrepreneurs in the baby diaper industry should focus on the integration of supply chain, R & D, and channel resources:
– Prioritize locking in suppliers of degradable raw materials with environmental protection certifications and establish a flexible supply chain to cope with cost fluctuations.
– Cooperate with universities or research institutions to develop core technologies such as low – sensitivity and ultra – thin and breathable materials, and use ODM manufacturers to reduce initial production investment.
– Penetrate the market through mother – and – baby communities, live – streaming e – commerce, and offline chain channels simultaneously. Establish content cooperation with KOLs and pediatricians to enhance trust. At the same time, apply for government subsidies for “specialized, refined, characteristic, and innovative” and green manufacturing to relieve financial pressure and dynamically optimize resource matching efficiency.

(3) Suggestions on the Entrepreneurship Team

Founders should give priority to recruiting members with insights into the mother – and – baby market and experience in supply – chain management, and form a cross – functional team (product R & D, quality inspection, channel operation). The team should include at least a technical backbone with 5 years of R & D experience in baby products, a quality control expert familiar with national standards for daily chemical products, and an operation leader with resources in supermarket/mother – and – baby chain channels. Strengthen the team’s knowledge reserve of new environmental protection materials (such as degradable cores) and intelligent wearable detection technologies. Establish a weekly cross – departmental product iteration meeting mechanism and assign a full – time compliance officer to track the updates of 12 mandatory standards such as GB15979 – 2002.

(4) Suggestions on Entrepreneurship Risks

It is recommended to give priority to controlling the safety of raw materials. Select suppliers of polymer cores without fluorescent agents with international certifications and keep batch quality inspection reports to avoid the risk of product recalls. Use the cross – border e – commerce ERP system to monitor the updates of product standards in various countries in real – time (such as the new EU SCCP regulations), and preset multi – country compliance templates in the product label library. Conduct live allergy tests through a matrix of Douyin accounts focusing on baby products to build consumer trust and avoid the risk of false advertising. Develop a mini – program to achieve the function of scanning codes for traceability, and use blockchain technology to record the production process. Cooperate with maternity hospitals to launch a subscription service for neonatal gift boxes to reduce the risk of inventory turnover. Focus on the community mother – and – baby stores in the sinking market and adopt the consignment model to reduce the risk of channel inventory pressure. At the same time, accumulate users’ allergy data to iterate products.