China's falling birth rate pushes firms to diversify

STORY: Push chairs, onesies, and cuddly toys.

Items in the baby aisle are facing declining sales in China as more people in the country forgo having children.

China's population drop is forcing companies that make things for babies or children to diversify or seek buyers overseas.

Yan Zhang is one of them.

She's the founder and CEO of children's clothing brand Natunakids, which is now making more clothes for grown-ups.

"We have a lot of parent-child outfits. For example, a piece of clothing which I would previously only have made for children, I will now ask my tailor to make an adult version. Right now the sales volume of adult clothing is actually pretty large. This is how we are currently preparing (for the declining birth rate). We have considered (making) pets clothing as well, but our team is relatively small."

Last year, China's population fell for the first time in six decades,

and in April India officially became the world's most populous country.

The knock-on effects have been swift.

China's market for baby food and diapers is the world's largest,

but it's expected to contract this year for the first time since Euromonitor began keeping data in 2012.

The research firm estimates that the market will shrink by 2% to $37.2 billion by 2025.

Shaun Rein is the managing director of China Market Research Group:

"For years, China has been the major growth driver for the world’s largest baby care companies. Whether it be infant formula, or diapers, or children’s toys. What’s happening is that a lot of these multinational brands are starting to focus on India. Because India is still continuing to grow and has eclipsed China as the world's largest country in terms of population."

Birth rate declines are not expected to end any time soon, with analysts noting young Chinese adults are not keen to have more than one or even any kids due to the sky-high costs of child-rearing.