Homemakers Set to Exploit Opportunities in O2O Era

May 27, 2019  By Zhu Wenqian  Editor: Ling Xiao
A teacher demonstrates how to bathe an infant to students of a housekeeping training course at a nursing center in Huaibei city, Anhui Province. [For China Daily/Wang Shanchao]

 

E-platforms streamline domestic help services, attract investments, create jobs, foster economic stability
Demand for homemaking services among Chinese families is surging in China, promising to spawn an online-to-offline, or O2O, market worth more than 200 billion yuan ($29 billion) in annual sales revenue, insiders said.
Trained domestic helps, nannies and nurses for the elderly are in great demand as millions of middle-income families, flush with rising disposable incomes and coping with hectic lifestyles, are seeking to restore order to their lives.
They are willing to pay for professional-grade homemaking services, including those of postpartum nanny or yuesao, that could simplify their lives, and create more quality time and convenience.
This is yet another manifestation of the ongoing consumption upgrade — the pursuit of higher-quality products and services in China — amid rising number of both two-child families and aging people, experts said.
In China's densely populated first-and second-tier cities, specialist agencies in the form of online platforms now offer homemaking services for a fee. On their rolls are versatile, multitasking domestics who can cook, clean, baby-sit and care for the elderly.
Since 2013, a number of e-providers of homemaking services, such as 58 Daojia, Yunjiazheng and Ayibang, have emerged.
"Chinese women are showing an increasing sense of independence. This is encouraging more women to work, thus reducing their time and energy to do household work," said Neil Wang, president of consultancy Frost& Sullivan in China.
"With the rise of disposable incomes, more Chinese families are able to afford homemaking services. This has led to the rapid expansion of the sector, which is expected to become a new growth engine that can boost both employment and the economy," he said.

Li Huiting (R), a homemaker, and her colleagues baby-sit at the Tianfu International Nursing Center in Hunan province. [For China Daily/He Maofeng]

 

In the capital Beijing, a full-time trained and experienced nanny can be employed for about 6,000 yuan to 7,000 yuan a month. Those who have already made a name for themselves through employer recommendations and reviews command salaries of around 10,000 yuan to 20,000 yuan a month, which is as much as what a white-collar worker might make these days.
There is clearly a demand-supply gap, which is making good nannies popular in the market. "It's really a hard job to be a full-time nanny. All my time goes into delivering top-class services to my employers. I'm booked till well into the middle of next year. The last few Spring Festival holidays were all spent at my clients' homes," said a nanny surnamed Li.
She has been working in Beijing for more than 10 years now. Her salary now tops 10,000 yuan a month.
From 2013 to 2017, homemaking services grew by an annual compound growth rate of 21.6 percent. The sector is showing remarkable future growth potential, consultancy Frost & Sullivan found after undertaking a study.
Interestingly, in terms of growth rate, online home services outgrew offline peers. In 2013, their market scale was 46.05 billion yuan, which ballooned to 167.78 billion yuan in 2016, up 264 percent over a three-year period, Frost& Sullivan found.
The corresponding figures for the offline segment were 146 billion yuan in 2013 and 182 billion yuan in 2016, up 24.7 percent.
Typically, homemaking or housekeeping services include cleaning bathroom, kitchen and other areas of the home; washing dishes; laundry and ironing; washing or mopping floors; defrosting refrigerators; making and changing beds; dusting and vacuuming; shopping for food and household supplies; planning, preparing, and serving health and balanced meals; looking after kids or the elderly when the employer is away; and so on.

Staff of a play school in Chongqing teach a kid how to use learning toys. [For China Daily/Chen Shichuan]

 

Seeing the potential to monetize such services by making them a mainstream, organized business segment, investors have been rushing in to back specialist startups.
Beijing-based online homemaking services platform 58 Daojia received its first round of funding from strategic investors back in 2015. Since then, its subsequent funding rounds netted over $300 million in all so far, with big names such as Alibaba Group Holding Ltd and Ping An Insurance (Group) Co of China Ltd among its backers.
As 58 Daojia streamlined its business and introduced a professional approach to homemaking services, the market in China expanded, with more and more families making an e-beeline for trained homemakers.
Demand for professional nannies grew by 30 percent year-on-year last year, the service provider said, but did not disclose any absolute figures to back up its claim.
"Demand growth came mainly from Beijing, Shanghai, Guangzhou and Shenzhen. Since last year, demand from second-tier cities like Hangzhou, Nanjing, Chengdu and Changsha has been growing rapidly as well," the company said.
"Demand for nannies and maternity matrons (or yuesao, who mainly care for the newborn more than helping the new mom or doing household work) grew faster than that for domestic helps. Young parents are pursuing professional or higher level of maternity services."

Home service industry grows rapidly in China. [For China Daily/Liu Lunan]

 

Conceivably, homemakers will be expected to be aware of early childhood education, dietary supplements and children's health down the line, said 58 Daojia, which claimed it has millions of registered homemakers on its platform, whom it places among its clients.
"We plan to become a platform for professional life services" that integrate technologies, products and human resources. "We will match and dispatch domestic helps by utilizing big data", and help create a potential trillion yuan market in homemaking services, 58 Daojia said.
Since 2016, when the Chinese government started to allow all married couples to have up to two children, relatively more educated and well-settled younger couples with two kids have tended to hire homemakers.
Yet, there is a shortage of professional helps. There is no standardized training in the market. Demand outstrips supply, Wang of Frost& Sullivan said.
More so because by the end of 2017, the number of elderly people aged 60 or above reached 240 million in China, accounting for 17.3 percent of the total population, according to the Ministry of Civil Affairs.
The number of elderly people who live alone, those who don't have any children, or those whose children live far away from them is also increasing. So, there is immense room for growth in the elderly care segment of the homemaking services sector.
"Staying at home, instead of going to nursing homes, is the choice for most aged people in China. Elderly nursing services such as cooking, cleaning, escorting the elderly to go to hospitals, and escorting them to exercise, are in high demand," Wang said.
Although the outlook for the nascent sector's future growth is optimistic, poor supervision and absence of an established regulatory environment may pose problems, industry observers said.
Issues like protection for the rights of domestic helps, an effective work assessment system and more promising career development path for homemakers need to be sorted out sooner than later, Wang said.
Earlier this year, Gao Feng, spokesman of the Ministry of Commerce, said that in the past few years, the government released a set of rules and regulations to govern the homemaking services sector. Next, it will step up efforts to set up a comprehensive standard-management system and promote the sector's healthy development.

 

(Source: China Daily)

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