"Collaboration with Tech Companies and Building a Digital Ecosystem Are Essential"
Despite the sharp decline in the number of births, the domestic kids industry continues to grow steadily and expand into various business areas.
On the 10th, Samjong KPMG released a report titled ‘Kids Industry Led by Gold Kids in the Era of Low Birthrate,’ identifying the main business trends in the kids industry as ▲premiumization ▲Kids Tech ▲character IP (Intellectual Property) ▲global market expansion.
The kids industry targets infants to elementary school students. In the past, the market centered on baby products, education, and toys, but recently it has expanded into diverse fields such as healthcare, finance, and entertainment, leading to a more segmented industrial structure. According to global financial data service provider PitchBook, the domestic kids industry is expected to reach approximately 60 trillion KRW by 2025.
The report highlights the premiumization of the kids industry, emphasizing the need to strengthen market competitiveness through improved quality and brand value. With the increase in single-child households, parents’ investment in child-rearing has expanded, driving demand for premium products. In response, companies are attempting differentiation through strategies such as ▲emphasizing eco-friendly and educational values ▲strengthening premium brand portfolios via mergers and acquisitions (M&A) ▲incubating premium imported brands. The analysis stresses that a premium strategy focusing on safety, functionality, and eco-friendliness beyond price increases is essential.
The adoption of Kids Tech is accelerating due to the rise of the Alpha generation, familiar with digital environments, and MZ generation parents. Particularly, active integration of technology in education, childcare, and finance has led digital platforms offering customized services to emerge as new growth engines in the kids industry. Kids industry companies are strengthening cooperation with technology firms to create synergy with their core businesses and increasingly recognize the need to build ecosystems suited to digital environments.
Recently, the ‘IPconomy (IP+Economy)’ trend has surged in the kids industry, referring to the expansion of various businesses utilizing character IP. A representative example is content companies directly entering toy manufacturing and distribution. Notably, SAMG Entertainment (Catch! Teenieping), ICONIX (Pororo), and The Pinkfong Company (Pinkfong, Bebe Fin) are expanding their global market presence and licensing businesses based on strong character IPs. The report suggests that kids industry companies should focus on developing and nurturing the next super character IP while diversifying character-based businesses and licensing to strengthen brand identity and build emotional connections with consumers.
In response to the domestic decline in birth rates, kids industry companies are also making efforts to enter global markets. Infant skincare brand ‘Gungjungbichek’ and childcare product specialist brand ‘Mother-K’ are actively utilizing online platforms to compete with global brands. The report points out that K-infant product companies must secure competitiveness in the global market based on product safety and brand stories and actively use e-commerce platforms to expand touchpoints with local consumers.
Kim Sung-kyu, partner at Samjong KPMG, said, “As awareness and preference for Korean consumer brands have recently increased, the value of K-infant products is also gaining attention in overseas markets,” adding, “It is time to focus on the moves of leading infant product companies that are receiving positive responses in the global market based on excellent product capabilities.”
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