Marketdash
Back to News

World's Biggest Stroller Maker Gets Squeezed by Tariffs and Baby Bust

MarketDash Editorial Team
21 days ago
Goodbaby International once dominated baby stroller markets from China to the U.S. to Europe. But a combination of Trump-era tariffs and China's collapsing birth rate is squeezing the company's margins and sending revenue into reverse.

When Goodbaby International Holdings Ltd. (1086.HK) went public in Hong Kong back in 2010, the company had already been China's leading baby stroller maker for 17 years. The timing looked perfect. China's growing middle class wanted to pamper their kids with the best products money could buy, and Goodbaby was there to sell it to them.

The company used its IPO proceeds to go on a global shopping spree, snapping up brands and becoming the world's largest supplier of strollers and baby car seats. By 1996, Goodbaby had become the biggest stroller supplier in America. Seven years later, it claimed that title in Europe too. The company was making products for major brands like Quinny, Nike Kids, and Tomme Tippee.

But those glory days feel like ancient history now. The company is getting hit from multiple directions: China's birth rate is collapsing, Chinese consumers are tightening their wallets, and Donald Trump's tariffs on Chinese products are making life miserable for the company's U.S. business.

The Numbers Tell a Grim Story

Goodbaby's third-quarter results, published earlier this month, showed things getting worse. Revenue for the first nine months of 2025 dipped 1.1% year-over-year to HK$6.42 billion (about $826 million). That's a deterioration from the first half, when the company managed to eke out a 2.7% revenue increase.

The pain wasn't evenly distributed. The company's domestic gb brand got hammered, with revenue tumbling 18.1% for the nine-month period. Its Evenflo baby car seat brand fell 10.9%. Even its Blue Chip design consulting business dropped 19.9%, reflecting how vulnerable its customers are to the U.S. tariff chaos.

The one bright spot? Goodbaby's high-end Cybex stroller brand jumped 11.7% and now represents 57.5% of the company's total revenue. That's basically the only thing keeping the ship afloat right now.

Investors haven't been thrilled. Goodbaby's shares dropped 4.2% in the four trading days after the announcement, though they later recovered that ground. Still, at HK$1.19, the stock is trading at just one-fifth of its IPO price of HK$4.90. Not exactly the growth story people were hoping for.

Profits Are Even Worse

The latest report didn't include profit figures, but the company's midyear report from August painted a bleak picture. Net profit plunged 43.7% to HK$105.5 million in the first half of 2025, while net margin fell 2 percentage points to just 2.5%. It's safe to assume things didn't magically improve in the third quarter.

In a profit warning issued before that midyear report, Goodbaby pointed fingers at U.S. weakness as the main culprit behind falling profits. The company also cited additional costs from new regulatory standards for car seats and increased spending on promotions and marketing.

From Vice Principal to Stroller Tycoon

Goodbaby's rise mirrors the broader story of Chinese manufacturing. The company was founded by Song Zhenghua, now 76, who started out as a middle school vice principal running his school's factory between 1989 and 1993. As China encouraged entrepreneurship, he invented a "push and rock" baby stroller under the Good Baby brand. It became a household name.

The company's global ambitions kicked into high gear in 2014 when it acquired Cybex, a German child car seat brand whose founder Martin Pos still sits on Goodbaby's board. That same year, it bought Evenflo, an American company founded way back in 1920 that started with baby bottles before moving into car seats and strollers.

The Tariff Hammer

When the U.S. slapped tariffs on baby products in April, prices jumped fast. Strollers saw average price increases of 25%, while child safety seats went up 20%. That squeezed Goodbaby's gross profit margin down to 49.6% in the first half of the year, a 3-percentage-point drop year-over-year. The company clearly struggled to pass those tariff costs along to customers.

Given that the U.S. accounted for about a third of Goodbaby's sales in the first six months of the year, those tariffs hurt. But like other Chinese manufacturers who dominated certain U.S. product categories during globalization's heyday, Goodbaby has been adjusting. The stock looks somewhat undervalued with a price-to-earnings ratio of just 7.

Europe to the Rescue

Europe has become Goodbaby's growth engine. The European segment has grown from 27% of revenue in 2019 to 47% in the first half of this year (though that figure includes the Middle East and Africa too). The Americas have been overtaken.

The upmarket Cybex strollers are hugely popular in Europe and driving revenue expansion there. Meanwhile, the mid-market Evenflo brand is struggling with competition, lack of brand cachet, and cost pressures in the U.S.

China's Baby Bust Bites Hard

While the U.S. market has been a recent headache, Goodbaby's biggest pain has come from its home market. China has fallen from 35% of sales in 2019 to just 20% or less this year.

Despite Beijing's efforts to encourage childbearing, China's fertility rate sits at a dismal 1.01 births per woman, compared to 2.51 in 1990. That means far fewer babies who need Goodbaby's products. Making matters worse, Chinese consumers are becoming more cautious as the economy slows, which translates to less spending on their kids.

Can Goodbaby Adapt Again?

The company has proven it can adapt before. It evolved from being largely an OEM manufacturer making products for other brands to the higher-margin business of selling its own branded products after the Cybex and Evenflo acquisitions. Still, the company's revenue of HK$8.9 billion for the 12 months through June is well below its 2021 peak of HK$9.7 billion.

Despite political risks and a lack of growth drivers beyond Cybex, analysts seem to think Goodbaby can work through its problems. CICC cut its 2025 profit forecast by 31% after the midyear report but raised its 2026 target price by 23% to HK$1.62. First Shanghai had an even more optimistic target price of HK$1.85 in October, rating the stock a buy.

For context, rival Butong Group (6090.HK), which owns the BeBeBus brand of strollers and car seats, has been on a tear since its $92 million IPO in September. The stock is up more than 40% since then. But Butong's revenues are still growing strongly, unlike Goodbaby's. And with a P/E ratio north of 100, Butong looks expensive. That could benefit Goodbaby if investors start hunting for cheaper alternatives in the baby products space.

Back to News

World's Biggest Stroller Maker Gets Squeezed by Tariffs and Baby Bust

MarketDash Editorial Team
21 days ago
Goodbaby International once dominated baby stroller markets from China to the U.S. to Europe. But a combination of Trump-era tariffs and China's collapsing birth rate is squeezing the company's margins and sending revenue into reverse.

When Goodbaby International Holdings Ltd. (1086.HK) went public in Hong Kong back in 2010, the company had already been China's leading baby stroller maker for 17 years. The timing looked perfect. China's growing middle class wanted to pamper their kids with the best products money could buy, and Goodbaby was there to sell it to them.

The company used its IPO proceeds to go on a global shopping spree, snapping up brands and becoming the world's largest supplier of strollers and baby car seats. By 1996, Goodbaby had become the biggest stroller supplier in America. Seven years later, it claimed that title in Europe too. The company was making products for major brands like Quinny, Nike Kids, and Tomme Tippee.

But those glory days feel like ancient history now. The company is getting hit from multiple directions: China's birth rate is collapsing, Chinese consumers are tightening their wallets, and Donald Trump's tariffs on Chinese products are making life miserable for the company's U.S. business.

The Numbers Tell a Grim Story

Goodbaby's third-quarter results, published earlier this month, showed things getting worse. Revenue for the first nine months of 2025 dipped 1.1% year-over-year to HK$6.42 billion (about $826 million). That's a deterioration from the first half, when the company managed to eke out a 2.7% revenue increase.

The pain wasn't evenly distributed. The company's domestic gb brand got hammered, with revenue tumbling 18.1% for the nine-month period. Its Evenflo baby car seat brand fell 10.9%. Even its Blue Chip design consulting business dropped 19.9%, reflecting how vulnerable its customers are to the U.S. tariff chaos.

The one bright spot? Goodbaby's high-end Cybex stroller brand jumped 11.7% and now represents 57.5% of the company's total revenue. That's basically the only thing keeping the ship afloat right now.

Investors haven't been thrilled. Goodbaby's shares dropped 4.2% in the four trading days after the announcement, though they later recovered that ground. Still, at HK$1.19, the stock is trading at just one-fifth of its IPO price of HK$4.90. Not exactly the growth story people were hoping for.

Profits Are Even Worse

The latest report didn't include profit figures, but the company's midyear report from August painted a bleak picture. Net profit plunged 43.7% to HK$105.5 million in the first half of 2025, while net margin fell 2 percentage points to just 2.5%. It's safe to assume things didn't magically improve in the third quarter.

In a profit warning issued before that midyear report, Goodbaby pointed fingers at U.S. weakness as the main culprit behind falling profits. The company also cited additional costs from new regulatory standards for car seats and increased spending on promotions and marketing.

From Vice Principal to Stroller Tycoon

Goodbaby's rise mirrors the broader story of Chinese manufacturing. The company was founded by Song Zhenghua, now 76, who started out as a middle school vice principal running his school's factory between 1989 and 1993. As China encouraged entrepreneurship, he invented a "push and rock" baby stroller under the Good Baby brand. It became a household name.

The company's global ambitions kicked into high gear in 2014 when it acquired Cybex, a German child car seat brand whose founder Martin Pos still sits on Goodbaby's board. That same year, it bought Evenflo, an American company founded way back in 1920 that started with baby bottles before moving into car seats and strollers.

The Tariff Hammer

When the U.S. slapped tariffs on baby products in April, prices jumped fast. Strollers saw average price increases of 25%, while child safety seats went up 20%. That squeezed Goodbaby's gross profit margin down to 49.6% in the first half of the year, a 3-percentage-point drop year-over-year. The company clearly struggled to pass those tariff costs along to customers.

Given that the U.S. accounted for about a third of Goodbaby's sales in the first six months of the year, those tariffs hurt. But like other Chinese manufacturers who dominated certain U.S. product categories during globalization's heyday, Goodbaby has been adjusting. The stock looks somewhat undervalued with a price-to-earnings ratio of just 7.

Europe to the Rescue

Europe has become Goodbaby's growth engine. The European segment has grown from 27% of revenue in 2019 to 47% in the first half of this year (though that figure includes the Middle East and Africa too). The Americas have been overtaken.

The upmarket Cybex strollers are hugely popular in Europe and driving revenue expansion there. Meanwhile, the mid-market Evenflo brand is struggling with competition, lack of brand cachet, and cost pressures in the U.S.

China's Baby Bust Bites Hard

While the U.S. market has been a recent headache, Goodbaby's biggest pain has come from its home market. China has fallen from 35% of sales in 2019 to just 20% or less this year.

Despite Beijing's efforts to encourage childbearing, China's fertility rate sits at a dismal 1.01 births per woman, compared to 2.51 in 1990. That means far fewer babies who need Goodbaby's products. Making matters worse, Chinese consumers are becoming more cautious as the economy slows, which translates to less spending on their kids.

Can Goodbaby Adapt Again?

The company has proven it can adapt before. It evolved from being largely an OEM manufacturer making products for other brands to the higher-margin business of selling its own branded products after the Cybex and Evenflo acquisitions. Still, the company's revenue of HK$8.9 billion for the 12 months through June is well below its 2021 peak of HK$9.7 billion.

Despite political risks and a lack of growth drivers beyond Cybex, analysts seem to think Goodbaby can work through its problems. CICC cut its 2025 profit forecast by 31% after the midyear report but raised its 2026 target price by 23% to HK$1.62. First Shanghai had an even more optimistic target price of HK$1.85 in October, rating the stock a buy.

For context, rival Butong Group (6090.HK), which owns the BeBeBus brand of strollers and car seats, has been on a tear since its $92 million IPO in September. The stock is up more than 40% since then. But Butong's revenues are still growing strongly, unlike Goodbaby's. And with a P/E ratio north of 100, Butong looks expensive. That could benefit Goodbaby if investors start hunting for cheaper alternatives in the baby products space.

    World's Biggest Stroller Maker Gets Squeezed by Tariffs and Baby Bust - MarketDash News