During the Lakme Fashion Week’s latest Winter/Festive 2011 show a little over a month ago, apparel designer Sabyasachi Mukherjee had kids walking the ramp dressed in his collection. Kids doing the ramp walk are no longer unusual.
In summer, Fab India organised a fashion show with 50 kids as its models, to showcase its summer collection. The number of little hopefuls wanting to register for the show was reportedly 300.
International luxury brand for children, Lanvin, is preparing to enter the Indian market soon. Another foreign label, Max, entered India five years ago, catering to the entire family.With 55 standalone stores in 32 cities and sales of Rs 400 crore last year, Max’s kidswear sales contributed 19% or Rs 80 crore to overall sales. Major international brands – Benetton, Nike, Reebok, Puma, Tommy Hilfiger – have kiddie ranges to offer. Chicco, a specialised brand for kids, entered India recently.
Raymond has launched its Zapp! store for kids. Weekender tied up with Disney and Warner Brothers to use cartoon characters such as Mickey and Minnie Mouse, and Tom and Jerry in its apparel.
According to an IRIS retail report, although still small at Rs 3,000 crore, organised retail of children’s apparel is growing at 24-25% annually, which is 5.3% of the overall organised apparel retail market and 11.4% of the children’s apparel retail market – branded and unbranded.
According to retail consultancy Technopak Advisers, the overall children’s apparel market is growing at a CAGR (compounded annual growth rate) of around 10-11%.
Given the current demand and improved supplies, by 2011-12, the organized kidswear market is expected to touch Rs 3,800 crore, according to IRIS. The boyswear and girlswear market sizes remain almost equal in value terms, said Amit Gugnani, VP, Teknopak Advisers.
According to Technopak, the key drivers that have led to the surge in the consumption of kidswear in India are: high levels of media exposure for kids; double income parents; brand exposure, especially the international brands; and peer pressure, with young kids making a lot of decisions based on what their friends are doing.
Lilliput, Gini & Jony, Catmoss and Benetton Kids account for nearly two-fifth of the total organised kidswear market, reveals IRIS. Lilliput is the largest, with a market share of about 14.3%, followed by Gini & Jony at 11% and Catmoss at 7%.
Most of this market is in the medium-to-premium price range (Rs 300-600 and Rs 600-1,000), with Benetton and Gini & Jony being more premium, and Catmoss and Lilliput more medium range in their pricing.
Gini & Jony’s prices range between Rs 500 and Rs 3,000. It has 280 exclusive branded outlets (EBOs) across 79 cities and 21 states. It is also available at multi-brand outlets.
Anil Lakhani, ED, Gini & Jony, said, “The market has been growing, with brand consciousness rising and parents wanting the best for their kids. During the 2008 recession, the market suffered a setback, but has picked up again.” The current growth rate for Gini & Jony is 33% CAGR, and it is targeting 36% growth this fiscal.
The branded market will grow rapidly, Technopak’s Gugnani expects, but added: “Though children make the decisions on fashion and style, parents control the purchasing, wanting the latest in fashion, the clothes to be lasting, and products at affordable prices too. There are niche brands that cater to the higher middle class. Luxury brands such as Lanvin may find selling luxury to kids tough. The mid-size segment, with its affordability and wide range, may do better.”
Since parents have started demanding more variety, style options tend to be high. Consequently, the quantity of production per style becomes smaller, said Rahul Mehta, president, The Clothing Manufacturer’s Association of India (CMAI). “Production of kidswear is more difficult than adultwear, with styling requirements being high.”
Kidswear retailing comes in several formats, ranging from specialty stores to online retail.
Key players cater to consumers through a mix of formats including department stores, hypermarket, EBOs and multi-brand outlets (MBOs), said Gugnani. Then there are specialty stores such as Mom & Me from Mahindra Retail, which have registered rapid growth.
“We entered the mother and child retail space with Mom & Me in 2009,” said Venkatraman, Mahindra Retail’s CEO. Mom & Me’s prices are at Rs 199-1,599.
“We have been growing at more than 100% every year as we add more stores. Even with the same stores, our annual growth is over 50%.” Mom & Me has 48 stores across 24 cities.
Max entered India five years ago. “In kidswear, the competition is still evolving. We have been successful at leveraging the family format, fashion and price. Our pricing is half to one-third of other branded apparel,” says Vasant Kumar, ED, Max. “We expect our kidswear section to grow to 160 stores with a turnover at R700 crore.”
A slew of babycare websites are tapping into the new parents demographic by providing them the convenience of shopping from home.
Rahul Sethi, president, e-commerce, Tradus.in, an Ibibo venture that’s six months old, said: “We dived into this category because of strong demand from customers who were buying toys and kids’ accessories from Tradus.in. We cater to the mid-price segment through brands including Lilliput, Disney and Barbie. We have seen a healthy 90% month-on-month growth.”
Almost 60 to 70% of people buying kidswear from Tradus.in come from the top five metros and are 30-40 years old.
Yehbi.com from BigShoeBazar launched kidswear in 2010, stocking Catmoss, Gini & Jony, Disney, Barbie, Superman and Spiderman. “This category is on an upswing, especially because kids themselves log on the sites and want to grab the best of deals,” said Manmohan Agarwal, CEO, BigShoeBazaar India. “From one order per minute in December 2010, we are seeing three orders per minute. We expect 20-25 % increase in sales for next year.”
From the profitability perspective, business in this sector is going very well, said Abheek Singhi, partner, Boston Consulting Group.
“Though the branded kidswear segment is small, growth rates are higher. Branded apparel will catch up as people trade up. Every year, BCG surveys various categories in which people are willing to trade up, and we find that kids’ apparel has been ranking among the top 10 in the past three years.”