
Those tiny baby hair growing on your infant when he/she is in your womb is known as Lanugo.
Lanugo is an important aspect of development for your babies while they are in your womb. It mostly goes away, however, at times it is seen in babies even after they’re born. Although that goes away in a couple of weeks after birth.
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Lanugo is a kind of soft and fine body hair in babies. The first hair that grows out of their follicles while they are developing in your womb. It may look like white or dark hair or may have no pigment or color to it. You may be able to see and feel lanugo on your infant’s back, forehead, shoulders, arms, and cheeks. Lanugo can be found anywhere on the baby’s body except the parts that don’t have hair follicles like the lips, palms of the hands, soles of the feet, sides of the fingers, etc.
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A few research done in the domain tell that this hair is of much use for the baby:
Your baby will not begin to put on weight and develop a layer of fat to keep warm until the last few months of pregnancy. The growth of lanugo helps in keeping the baby warm in the womb and helps the baby gain appropriate weight.
Your baby is surrounded by fluid in the amniotic sac during your pregnancy. Constant exposure to the amniotic fluid can affect the baby's skin. Lanugo helps in protecting the skin. A substance called vernix sticks to the baby’s skin via the lanugo and schields it from the amniotic fluid. It sticks to the vernix so that it can stay in place on the skin. Without the hair to cling to, the vernix could slide off the body.
Hence, when your child gets closer to his/her due date he/she will have less lanugo, less vernix, and less protection against the effects of the amniotic fluid. The effects of the amniotic fluid can be seen if a baby is overdue. Babies in such cases mostly have peeling skin.

The movement of lanugo on your infant’s skin may play an important role in releasing hormones that reduce stress and stimulate your child's growth inside the womb.
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In most cases lanugo shows up on your baby's skin around the 4th to 5th month of your pregnancy and then starts to fall off around the 7th to 8th month of the pregnancy.
Lanugo can be different in different babies.
A term newborn might or may not have a lot of visible lanugo.
Infants born after 42 weeks may not have any visible lanugo
Babies tend to shed their lanugo the closer they reach full-term.
Lanugo may have light color or no color in babies with lighter skin.
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Babies with darker complexions have darker hair and, therefore, the lanugo is darker. Lanugo is more commonly seen on premature babies, though they are found on full-term babies as well. There's nothing to worry about. However, if you are concerned about it talk with your doctor they’ll surely help you understand this phenomenon better.
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Yes, babies grow lanugo, a type of body hair, before birth. This hair is digested by the baby in the womb itself. However, some hair will remain after birth and fall off within a few weeks. So if a baby’s lanugo on their face does not fall off before birth, it can look like a moustache, but it will mostly fall off within a few days or weeks.
Babies grow hair all over their bodies, known as lanugo, in the womb. This hair is digested by the baby inside the womb and forms the baby’s first poop. Some babies are born with most or some of these hairs, which can look like a mustache. In most cases, this mustache and other excess body hair will fall on their own.
A newborn baby’s moustache is most likely lanugo that has not fallen out at birth. Lanugo is the body hair a developing fetus has as a layer of protection against amniotic fluid and to regulate body temperature. If this hair on the face does not fall off by birth, it can look like a moustache.
A Moustache starts growing around puberty time, in both boys and girls. Between the ages of 13 and 16, light hair can start appearing around the corners of the upper lip. For a few girls, triggered by hormonal imbalance, the hair can grow thicker. For boys, it will continue to grow and can reach its full thickness and size by age 25, depending on testosterone levels and genes.