Fearing contamination, Chinese pay more for imported infant goods
By Melanie Lee
SHANGHAI (Reuters) - Sophie the Giraffe is a teething toy taking over the world one baby mouth at a time. The toy, handmade in France from Malaysian rubber sap, is the rage for parents of toddlers the world over, including China.
But the knobby chew toy is priced around $30 in China, nearly three times the price in France. It's not a shock for Chinese parents, who have long lived with imported baby products that are sharply more expensive than elsewhere in the world.
Last week, Chinese authorities began an investigation into possible price-fixing and anti-competitive practices at five foreign companies manufacturing infant formula milk, including Nestle SA, Abbott Laboratories, Mead Johnson Nutrition Co, Danone's Dumex brand and Wyeth Nutrition.
Several other products aimed at infants and toddlers appear to be exorbitantly priced in China. Import duties are only a part of the reason, experts say - much of the premium for imported infant products can be ascribed to fears that locally made goods may be contaminated.
Chinese parents, who are mostly only allowed to have one child, simply do not want to take the risk of possible contamination in local baby products.
Foreign companies know this and many take advantage.
"Brands have been able to get away with this just because of the fear factor about buying unsafe products," said Benjamin Cavender, principal analyst at China Market Research Group.
"If you look at how consumers spend their money, they are disproportionately willing to spend money on anything that their child will be eating or what will be touching their child's body." Continued...