Many of China's manufacturers of baby and children's products are already facing painful reverberations from last year's historic decline in the country's population.

Domestic sales are shrinking, and the scramble is on to develop new streams of revenue — whether that involves diversifying into products for adults, or boosting offerings in overseas markets with younger populations like Southeast Asia and India.

Hong Kong-listed Health and Happiness (H&H), which gains nearly half of its revenue from baby products such as infant formula, food and diapers, is one such company.