Even as the overall apparel market emerges from the sluggish growth of the last two years, the market for children’s apparel is being seen as the new growth opportunity.
According to Technopak Advisors, the children’s apparel and footwear market — organised and unorganised — is worth an estimated Rs 22,000 crore, of which the share of branded products is 12-15%. At 20%, the annual growth rate makes children’s wear one of the hottest categories.
A range of Indian and international brands are targeting kids through modern retail and products. Reebok, Tommy Hilfiger, Benetton, Allen Solly and Puma, among other international brands, are in the market, marking the trend of adult apparel brands also offering kidswear. Niche international brands such as Chicco, Mothercare, ELC and Hamleys have also entered the market.
Among Indian players, Raymond, thus far an adult brand, launched its first store for kids’ apparel, Zapp!.
The Mahindra Group recently forayed into this segment with the launch of its Mom & Me stores, retailing products for expectant mothers and infants, thus bringing in segmentation. Even on a larger scale, segmentation is quite prevalent in the kidswear category. So, besides regular school uniforms and fashionwear, the segment now offers sports, casual, outdoor and party wear for various age groups.
The kidswear category is getting a boost also thanks to the emergence of children as an independent buyer group. Mass media and peer pressure influences have made urban children especially more conscious of their appearances and what’s available in the marketplace.
Things are looking up for this category which was so far largely dominated by unorganised players. From the earlier days, when there were just two ends of the spectrum — upper and lower — today the market is getting wider with space for many players and prices to suit all pockets.
“While the opportunity for children’s products has been present for a long time, it is the advent of specialty retail formats that has made the trend more visible. The last five years have seen many new formats focusing on one or more of these categories: infant and kidswear, footwear, infant and kids’ wellness, furniture and kids’ rooms, travel and safety, toys and games, and related maternity ranges. These formats are a mix of international and Indian retailers, and range from category killers such as Hamleys and Mom & Me, to smaller specialty stores such as Early Learning Center and Lilliput. With bigger companies coming in, the scenario is changing and consumer awareness towards branded kidswear has grown,” said Saloni Nangia, senior VP and head, retail and consumer products, Technopak Advisors.
Experts suggest that children, thanks to the media, are today more aware about what is in vogue. Higher disposable incomes and preference for branded products are driving growth. “The frequency of kidswear purchases is going up. Players who launched their branded products are doing well, others are following suit. Segmentation will further drive growth,” said Pinakiranjan Mishra, partner, Ernst & Young.
“About 30% of Indians are under 14 years of age, which means 360 million kids. This is equivalent to the entire US population and 80% of the UK’s. We aim to open 290 Lilliput stores and occupy 6,50,000 sq ft of retail space by the end of this financial year. By FY 2011, our turnover is expected to be Rs 675 crore, with 55% year-on-year growth,” said Sanjeev Narula, MD, Lilliput Kidswear. The company is expecting a Rs 1,600 crore turnover by FY 2012-13. It has 150 outlets now and is anticipating most of the growth from tier 2 and 3 cities, such as Patiala and Bhatinda.
Gini and Jony has created apparel in bright colours, reflecting contemporary kiddie attitudes of confidence. It has joined hands with Pantaloon for a retail store chain for kidswear.
Weekender, the apparel brand from the 1990s catering to children, revived in early 2008 and claims it is now in an exciting stage of expansion. “Our base is small, but we are growing rapidly. This game is also about reach; we have a substantial presence now,” said Kanika Vohra, COO, Weekender. The company has 113 stores and is looking at opening 130 by the end of this financial year and 250 by 2011-end.
Ramp shows and merchandise tie-ups with cartoon shows have become the norm. Children watch their favourite cartoon shows, which also advertise their merchandise. “There is a lot of segmentation in the two-14 years age group. Children have become very conscious of what they wear. Also, merchandise is a good opportunity and we have tie-ups with Disney for Ishaan,” said Vohra.
Lilliput has tied up with children’s TV channel Nick India to launch a spring-summer collection of apparel and accessories based on the cartoons Dora, Ninja Hattori and Oggy and the Cockroaches.
Weekender has tied up with Walt Disney and Warner Bros for its new kidswear collection, Toon World. The Ruff Kids brand of kids’ garments, owned by DS Corporation, is planning to expand its retail presence.
Retailers are dedicating shop floors for kidswear. Many have already out their own private labels. “Kidswear contributes at least 15% of revenues of the overall pie. It is a driver for other purchases,” said Pankaj Tibrewal, COO, Pantaloons.
The potential is high, as are the challenges. Benetton, for instance, has dedicated exclusive stores for kidswear in the premium segment. In the last six years, its growth has been 40% year-on-year. The kidswear revenue contribution to the overall pie at Benetton India is 28%. On the challenges of creating brand presence, a Benetton spokesperson said: “It takes time. There is only space for locally manufactured international brands. The key is design, but it has to be sourced locally. Import duties are prohibitive, so pricing is a challenge.”