From “sky-high prices” to “running away”, the confinement center bids farewell to the golden era

author| Dingjiao One Jia Hehui 

In 2025, the first thing that cannot withstand it will be the confinement center.

On the ninth day of staying at the Suzhou Aijia Childbirth Center, Xiao Yue, the second child, was awakened by the ping sounds, but found that the staff and the mother-in-law had long disappeared, and the expensive equipment in the warehouse had also disappeared. The confinement center where she stayed had run away. Three months ago, she had just paid 19800 yuan in a one-time payment to purchase a special confinement package.

As a national chain-type confinement center, Aijia’s service package prices range from 20,000 to 30,000 yuan, which can be regarded as the cost-effective choice in the industry. Xiao Yue, who thought she had successfully picked up a leak at a price of less than 20,000 yuan, accidentally became a cut leek. In addition to Suzhou, where she is located, Aijia confinement centers in other cities such as Hangzhou, Wuxi, Shanghai, and Guangzhou also experienced water and power outages for property properties in early January, disruption of kitchen meal supply, and evacuation of staff.

The escape incident at the confinement center is not an isolated case. According to incomplete statistics, in the past three years, in Xiamen, Chongqing, Chengdu, Wuhan, Nanning, Fuzhou and other cities, there have been incidents of maternity centers suddenly closing and running away.

Behind the running of confinement centers is the fact that most confinement centers are difficult to make profits.

Take Aidigong, the oldest domestic chain company and currently the only listed confinement center company, as an example. In the first half of 2024, it lost HK$39.194 million, a year-on-year increase of 65.68%. During the same period, another Santa Bella company that recently submitted a prospectus had a net loss of 480 million yuan, and its adjusted net profit was only about 17 million yuan.

There are two reasons. On the one hand, with the increase in the number of people entering the bureau, the price war and marketing war in the confinement center have intensified; on the other hand, the high property rent and medical staff costs of the confinement center have caused its profit margins to be repeatedly compressed.

What kind of business is the confinement center? Where should we go in the future?

The confinement center, polarization

The concept of confinement center originated from China Taiwan and was introduced to the mainland of China around 2000. In recent years, as women’s consumption decision-making power has improved, the self-pleasing economy has warmed up, and the concept of refined childcare has prevailed, women’s demand for confinement centers has become stronger than in the past.

The “Research Report on Postpartum Rehabilitation Management Services Data” released by the Social Science Literature Press in 2022 shows that 84.4% of the women surveyed have purchased postnatal rehabilitation services, and elderly, highly educated and white-collar women pay more attention to postnatal rehabilitation services.

In the past few years, the confinement center has been in a wild trend. According to Frost Sullivan’s data, from 2016 to 2021, the market size of China’s maternity center will increase from 6.76 billion yuan to 17.8 billion yuan, with a compound annual growth rate of 21.4%; it is expected to reach 28.1 billion yuan in 2025, with an average compound annual growth rate of 17.2%.

The industry is booming, and investment institutions such as Hillhouse, Tencent, and Byte have entered the market one after another. Hillhouse has invested HK$225 million in Aidi Palace through its partnership; Tencent has invested in Santa Bella, which specializes in high-end confinement centers; ByteDance has also invested tens of billions of yuan through its Xiaohe Health to become the controlling shareholder of Beijing Meizhong Yihe Medical Management Group; even Kanyun Holding Group, the parent company of ape counseling, has established Beijing Yuanman Maternal and Infant Care Co., Ltd. to launch the Jasmine Smart Maternal and Infant Care Center brand.

After several years of rapid development, the entire maternity center industry is now showing a clear polarization trend.

Taking the unit price of customers as an example, horizontally, the pricing of confinement centers is directly linked to the consumption power of urban residents. Standing at the top of the food chain is the high-luxury confinement center located in the core area of Beijing, Shanghai, Guangzhou and Shenzhen. Taking Shanghai as an example, St. Bella, known as Hermes in the confinement center circle, has an average monthly service price of about 300,000 yuan; the average price of high-end confinement centers such as Houmu, Weige, Jasmine Wisdom, and Jin ‘en is about 180,000 yuan. Most of the consumers they target are corporate executives, private owners and other families, and are more capable and willing to pay for high-end confinement centers.

Tuyuan/Santa Bella Maternal and Infant Care Center Weibo

Looking further down, the middle and lower parts of the food chain are the surrounding cities of Beijing, Guangzhou and Shenzhen, the second, third and fourth tier cities and even the county. Most of the consumer groups they target are working class, and the advantage is that sex prices are relatively high.

Take the confinement centers in Chengdu and Wuhan as examples. Their pricing is mostly between 20,000 and 100,000, with a median of about 40,000. For example, a 40,000 – 45,000 package from a mid-to-high-end brand in Wuhan, including 3-5 days of hospital care, 21-day confinement centers and 26-day maternity home services.

From a vertical perspective, the pricing of maternity centers in the same city will change based on the distance from the central location and the type of property you live in. Taking Shanghai as an example, high-luxury confinement centers are mostly distributed in Jing ‘an, Xuhui and Changning districts. The average prices of communities in these areas are at the mid-to-high level of the average price in the same city.

Although consumers no longer discuss why they want to go to confinement centers, their mentality has changed significantly in the process of choosing confinement centers: families with budgets of more than 100,000, driven by celebrities and Internet celebrities, tend to climb higher and higher, preferring top national or city top quality matching; families seeking cost-effectiveness prefer to align with nearby sub-cities, such as Beijingers going to Yanjiao for confinement, and middle-class people returning to second-tier cities for confinement.

This is the case with Xiao Shi, a novice mother working in Beijing. Her expected date of birth coincides with the Spring Festival of 2024. In order not to rush during the Chinese New Year, she started doing her homework early and found that ordinary confinement centers in Beijing cost 50,000 yuan to start, while better confinement centers often cost 80,000 to 100,000 yuan. Above, it is a bit stressful for working people.

She also thought about inviting a mother-in-law to come to her home. After making a subsequent calculation, she found that it cost 15,200 yuan a month to hire a mother-in-law in Beijing. The quality of the mother-in-law is uneven. If the mother-in-law feels dissatisfied after entering the house, she wants to change it again. It will be even more difficult.

In addition, the family’s housing is a small two-bedroom apartment, and parents already come to accompany the birth. If the mother-in-law comes to visit, someone in the family needs to sleep on the living room sofa, which is not a long-term solution. ldquo; In addition, the month’s sister-in-law needs to cook three dinners and three extra meals a day for Bao Ma. In addition, the family cooks and the kitchen is close to the bedroom, which affects the mother’s rest. If you rent a house temporarily in the same community, the total price is not cheap, including the money for hiring a nanny.& rdquo;

At the suggestion of a friend, she turned her attention to Yanjiao to find a replacement at the confinement center. After consultation, it was found that the average price of the Yanjiao confinement center was more than 20,000 yuan, and the environment was relatively quiet. It was equipped with one-on-one services for the monthly confinement center, dietitians provided confinement meals, and professional nurses were on call 24/7 to take care of the baby and the mother. It only takes 40 minutes to drive from Chaoyang District where she lives, and it is also convenient for her family to visit her.

Xiaoshi said that because the research started more than half a year in advance, and the confinement center in Yanjiao was so crowded that it launched a promotional event to bring the old and the new, she finally booked a room with the south facing bathroom in a villa area at a price of 25,000 yuan/28 days. Chinese medicine was also provided for shampooing, breast opening, and many health items. There was no extra money during the Spring Festival.

Overall, Xiao Shi is very satisfied with this replacement and feels that the price is very high.

Although the customer unit price is high, it is actually not that profitable

In the eyes of consumers, even if it is an equal replacement, the minimum charging standard for confinement centers starts at 10,000 yuan. In fact, this naturally good business is not as profitable as it seems.

Take Santa Bella as an example. According to the prospectus, although it receives more than 3000 pregnant women from high-net-worth families every year and the average customer price of its flagship store exceeds 220,000 yuan, it still faces the dilemma of making profits.

The prospectus shows that Santa Bella’s revenue from 2021 to 2023 and the first half of 2024 is 259 million, 472 million, 560 million, and 358 million, respectively, with gross profit margins of 30.6%, 29.9%, 37.5%, and 32.0%; The losses during the period were 122 million, 412 million, 239 million, and 480 million. Taking into account accounting standards and other issues, although profits were achieved in the first half of 2024 after adjustment, the net profit was 17.15 million yuan, only an increase of 10 million yuan over the same period last year.

The reason is that the cost is too high.

First, the money is earned by middlemen. From the perspective of business model, Santa Bella adopts a child-care center + high-end hotel light asset-based model. Usually Santa Bella will sign short-term and medium-term contracts of 1-3 years with high-luxury and light luxury hotels, and the hotels will provide them with rooms and post-natal meals. The advantage of this is that the average construction period of the confinement center will be shortened from 1-3 years to 1-3 months. Taking Shanghai as an example, Saint-Bella’s partners include Bulgari, Waldorf Astoria on the Bund, etc., and some Saint-Bella centers are located in single-family villas.

Although the asset-light strategy can help brands effectively expand their scale and shorten the payback period, it is also limited by fluctuations in third-party property rents. 2021-2023 In 2024 and the first six months of 2024, Santa Bella’s leasing and related costs were 71.2 million yuan, 120 million yuan, 130 million yuan and 87.8 million yuan, accounting for 27.5%, 26.1% and 22.5%, 24.5% of current revenue respectively.

In addition, most of the post-natal meals provided to customers were provided by hotel operators. The cost of post-natal meals during the same period was 22.6 million yuan, 38.5 million yuan, and 42.3 million yuan respectively. Including rental costs, Santa Bella spent nearly 1/3 of its total revenue on its partners. If you want to take advantage of the name of a luxury and light luxury hotel, Santa Bella needs to pay a high premium.

Tuyuan/Santa Bella Maternal and Infant Care Center Weibo

Second, the cost of obtaining customers remains high. For a long time, high customer unit prices, low frequency, and heavy decision-making have been typical characteristics of the center industry for confinement. According to the Santa Bella prospectus, in 2021, 2022, 2023 and the first half of 2024, the company’s sales and distribution expenses were 32.64 million yuan, 58.79 million yuan, 81.5 million yuan and 45.26 million yuan respectively, showing a gradual upward trend. This means that Santa Bella has to spend huge sales expenses to market new products.

A similar situation occurred in Aidi Palace. In 2023, Aidi Palace’s annual sales and distribution expenses will reach 109 million yuan, corresponding revenue will be 520 million yuan, and the sales expense ratio will reach 21%.

At present, Santa Bella relies on social media platforms such as Xiaohongshu for drainage. For example, celebrity Li Guangjie posted a second stay in Santa Bella with Lao Suitou; a Shanghai user shared his experience of spending 580,000 yuan to stay in the Bulgari store at the Santa Bella Childbirth Center… Although there is no lack of drainage properties, overall Bao Ma’s evaluation of Santa Bella is biased towards positive. Behind this marketing method is also high-cost investment.

In order to retain users and increase profits, confinement centers have started sideline businesses, which has also become an invisible consumption criticized by confinement centers. For example, services such as postpartum rehabilitation courses, parenting lectures, parent-child photography, and full moon parties offered to increase the premium have gradually become standard features in confinement centers.

Third, high service costs. Manpower is another core operating cost in Santa Bella.

Since the confinement center serves pregnant women and newborns, and their physical conditions have high requirements for the safety and professionalism of care, whether the confinement center is equipped with full-time maternity health staff and professional medical teams has long been regarded as a measure of its strength. An important criterion.

Based on the prospectus data, it can be concluded that from 2021 to 2023 and the first half of 2024, Santa Bella’s total human resources outsourcing and other labor costs, and employee benefits expenses (excluding remuneration of directors and supervisors) will be 119 million yuan, 217 million yuan, 222 million yuan, and 145 million yuan, accounting for 45.90%, 45.92%, 39.65%, and 40.53% of the revenue for the same period respectively.

In addition, Santa Bella has also invested nearly 300 million yuan in labor costs in the training and system construction of nursing staff. Among them, its independently developed SaaS and nursing service platform can assist nursing experts in monitoring the vital signs of mothers and babies in real time. Santa Bella will also equip each pair of mother and infant with 2 full-time caregivers, and provide 24-hour one-on-one personalized care services in shifts.

However, some maternity centers such as Weige and Jinen, which have feedback from consumers that charge slightly lower fees than Santa Bella, also adopt a nurse rotation system, and there is little difference in services. At present, Santa Bella has not yet established a real service moat, and its unique advantages have not yet been fully formed.

The confinement center, three major ways out in the future”

Although the confinement center is not as profitable as expected, the market size is considerable. According to data from Frost Sullivan, it is estimated that by 2030, the market size of China’s maternity center is expected to exceed the 100 billion yuan mark.

At present, the entire industry is showing a polarization trend, but each has problems that need to be solved urgently.

The high-luxury confinement center, which provides high-unit price and non-standardized services, serves similar to the core users of luxury goods, and its consumption power always exists. Just like Xiang Hua, founder of Santa Bella, once told the media that the high-end price is not expensive, but are the richest people using your products?” rdquo;

However, the problem faced by this type of confinement center is that it serves a limited number of people and can only increase income by increasing services or increasing premiums.

The confinement center, which follows the cost-effective route, competes for the working class. These confinement centers will become more involved in the future and fall into a situation of struggle to survive. After all, if they cannot get out of trouble through word of mouth, what awaits them will be a high vacancy rate, inability to afford high rents, and eventually bankruptcy at a loss.

So, where should the future confinement center go? There are three major trends:

The area sinks even more. With the economic development of third-and fourth-tier cities and the change of consumption concepts, these areas will become new growth points for confinement centers. For example, county-level confinement centers have now become a new choice for middle-class ladies and can enjoy the same price at half the price. Services, but at present, the county confinement centers are oversold and still need to be further improved.

Players are more professional. At present, a number of professional confinement centers run by public hospitals have broken out of the encirclement to provide Bao Ma with a series of services such as prenatal check-ups, childbirth, confinement, and child health care. They are called medical-level confinement care. You Baoma said that this kind of confinement center is more reassuring and has emergency medical channels when something happens.

Business is more diversified. Taking Santa Bella as an example, its commercial footprint has been extended to the family childcare services and pregnant women’s tonics market, such as the door-to-home care brand Yujia, Guanghetang, which focuses on female maternity and daily nourishment. In the future, it also plans to increase elderly care services. Business, expand the entire nursing industry chain services. Diversification may become one of the trends in the development of the industry.

Finally, from a higher perspective, the confinement center is currently facing an unprecedented wave of reshuffle, and the old model will eventually be eliminated. Whoever can provide refined and comprehensive services and truly make standards transparent will truly win the hearts of customers.& nbsp;