It is offering a new concept in the mainland - free training for mothers from the time they become pregnant until their child is six, clubs where they can meet and support each other. The store's products - educational toys, nutritional and food products for mother and child and aids such as water and air filters and breast-feeding accessories made by some of the world's top manufacturers.

Mr Estes' project has been years in the making and he has persuaded big names in the venture capital world to bet on it.

His company has initial capital of $7.8 million, with money from Orchid Asia Partners, a San Francisco-based firm whose major investors include Bank of America and Tredegar Investments and several of the super-rich who do not wish to be named.

Its goals are ambitious - within five years, 86 outlets in the mainland's cities and turnover of $100 million, with expansion into India, Indonesia, Taiwan, the Philippines, Malaysia and Thailand and a stock listing in New York and Hong Kong.

'This is a huge market, 22 million births a year, comparable to the entire population of Canada. But few companies are doing well. Some big US companies are losing as much as they are selling,' Mr Estes said in his new office in the building that houses his first shop, in northeast Beijing.

Existing companies have not done well because of a fragmentation of the market, retailers and distributors taking a cut of 45 per cent, with accounts receivable running up to 100 days, and advertising costs that have doubled each year over the past decade.

But Mr Estes said: 'We did surveys in 13 cities that showed monthly spending per family on the single child up to six years old of 740 yuan [about HK$689.92] in major cities, 580 yuan in second-tier cities and 420 yuan in third-tier cities, equivalent to 100 per cent of the income of some families in those poor cities.

'The single child is often the object of attention of six adults - two parents and four grandparents.

'Large investments in a child's nutrition and education are the norm since children are viewed as a means to economic advancement.' A visit to any big city department is testimony to that - children fatter and taller than their parents and crowds at the counters for goods parents buy for their children, like personal computers, brand sports wear, mountain bicycles and English-language cassettes and textbooks.

Mr Estes' research also revealed a shortage of information and training for the mainland's mothers, nearly all of them having a baby for the first time, an experience of high anxiety.

'Their parents had their children during the Cultural Revolution [1966-76] and know nothing of modern products. Information from books and magazines is limited and doctors do well in treating diseases but provide limited service or education because they are not paid for it,' he said.

The formula Mr Estes and his collaborators came up with is a club that signs up members and provides them with fifteen 90-minute lectures, free of charge, on pre-natal and infant health care and how to use BabyCare products, from when the mother is pregnant until her child is six.

In addition to its products, each shop will have a centre where mothers can meet and discuss their concerns and problems, essential in cities where women have just one child, most live in high-rise apartment buildings and the extended family is shrinking because new couples prefer to live on their own.

The target is 7,000 mothers and a staff of 40 trained personnel in each centre. Members will get discounts the more they buy while those who buy nothing for six months will have their membership suspended. Non-members can buy the products but at a higher price.

The company's education consultants, lecturers and sales managers will earn a commission for providing training, which will be based on purchases from new members.

The company aims to open three centres in Beijing this year and three more next year, along with three in Tianjin, rising to 86 nationwide in big cities with higher-income population. It aims at sales of $2 million in the first year and to turn a profit in the third year.

Its goods will come from a factory it has built in an economic zone on the outskirts of Beijing.

By manufacturing within the mainland and selling only BabyCare's own products, the company earns a licence to sell its products nationwide and open as many sales outlets as it wants - a right denied to firms that are simple retailers.

Such an ambitious project, touching on sectors as sensitive as health and education, has required close co-operation with the government and the medical profession. BabyCare is a joint venture with a unit of the Ministry of Science and Technology which has a 5 per cent share of the equity.

Over the past four years, the company has used mainland and foreign medical and educational experts to translate 2,300 pages of Chinese training material on pre-natal, post-natal and child development, which will support the elaborate training programmes and mother clubs.

For Mr Estes himself, the project represents the biggest gamble of his life, investing all his savings into the company, after spending his professional life with two blue-chip companies, SmithKline Beecham and Wella.

Many of the mainland staff have put their own money into the venture, with senior local managers having stock options, which is rare in the mainland.

'We have structured the company so that it could be listed in the future, on the Nasdaq or on the secondary market in Hong Kong,' he said.

'I love children, so this is a very meaningful project. I feel very good about it and my staff are fired up about it. Many of them are working here for much less than they received with their previous employer,' he said.

Ironically, Mr Estes himself has no children and is not even married. His girlfriend complains that he spends too much time on BabyCare.

He was born in 1966 in Hong Kong, where his father, part teacher and part Anglican missionary, was vice-principal of St Stephen's College in Stanley where he lived for his first nine years.

'During the Cultural Revolution, China cut off the water, so we had water one day a week for two hours, when we had to take a bath and clean our clothes and dishes. I could speak Cantonese then, but now I focus my energy on trying to achieve a fluent level of Mandarin.

'The atmosphere in Hong Kong then was similar to my last years in China. The economy was not so good yet and people worked very hard to create a better future for themselves and their family,' he said.

In 1975, his parents took their three children home to the United States so that they would not be strangers in their own country. The family lived in New Mexico and Austin, Texas and Mr Estes took degrees in political science and economics.

His first job was with SmithKline Beecham. He held various positions in marketing, sales, finance and business development with them in Philadelphia, London and for its operations in Japan and East Asia.

He moved to the mainland in 1991 to run sales and marketing for SmithKline Beecham's joint ventures.

'I was always in the trenches - meeting doctors in Harbin during the winter with the temperature at 35 degrees below or out with the sales force in Shanghai and Nanjing during a hepatitis epidemic,' he said.

'To my knowledge, I was one of the only two foreigners to be made a model worker. I received this award from the Mayor of Tianjin at the end of 1992.' In 1993, Wella head-hunted him, offering him several times his then salary. He rose through the ranks to be managing director for Greater China. He left early last year.

'I expect to stay in China for a long time. I have been in Greater China for 20 years, more than half my life. I am not homesick. I feel at home and really enjoy it here. I feel I can contribute even more here.' American Matthew Estes, 33, was born and spent his first nine years in Hong Kong. His United States schooling took in degrees in political science and economics. SmithKline Beecham gave various postings around the world as his career took off. In 1991 he was posted to the mainland where two years later he was snapped up by cosmetics company Wella. He left last year to build his own company, BabyCare.

This is a huge market, 22 million births a year, comparable to the population of Canada. But few companies are doing well. Some big US companies are losing as much as they are selling

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