Of Kids, Clothes and Clicks
Mr Sharad Venkta, MD & CEO, Toonz Retail, gives us a lowdown on the increasing space for childrenswear in the e-commerce segment.
A report on the increasing space for childrenswear in e-commerce
Childrenswear has taken a great leap in the e-commerce space to become one of the most lucrative segments in the industry. The reason for the same is a change in the preferences of parents and children, changes in buying patterns, and a wide variety of options available. Along with this, an increase in disposable incomes is also one of the most important reasons of this major change. Childrenswear in India is no longer limited to comfort dressing only. There is an increasing need to be seen as fashionable. According to industry estimates, the retail value of the kids’ apparel market in India was R80,000 crore in the year 2017. The
CHILDRENSWEAR IS THE ONLY SEGMENT WHICH HAS BEEN SAFE FROM ECONOMIC CRISES SO FAR AND HENCE, IT IS THE MOST PROMISING SEGMENT IN THE APPAREL MARKET.
childrenswear market is expected to grow at CAGR of 15 per cent by the year 2020. The childrenswear market has percolated down to tier II & tier III towns like Pune, Nasik, Indore, etc. Childrenswear is the only segment which has been safe from economic crises so far and hence, it is the most promising segment in the apparel market. India is a lucrative market as it is also one of the youngest nations in the world and 30 per cent of its population is less than 14 years of age.
As kids are online from a very young age, a lot of brands have shifted their focus and have turned towards e-commerce for sales. Children get influenced easily by the products they see online. Besides kids, even the parents have now become acquainted with shopping online. Kids today have a greater sway over their parents’ buying decisions. Due to this, childrenswear has become very important and also one of the fastest growing segments. Besides their own website, companies also launch their brands also on various e-commerce portals like Amazon, Flipkart, Myntra, and others.
Until very recently, brands were slightly skeptical when it came to investing in this category. Because of the mistakes made by earlier brands or not being able to survive the market pressure, many brands decided not to enter the business, as a result of which the growth of the entire industry slowed down. But the recent advent of e-commerce has changed the scenario. Brands have started to realise the importance of e-commerce and the industry has received a much needed boost. The e-commerce space in India is now flooded with numerous childrenswear brands that are ready to experiment with their products. Initially, there was a lot of skepticism about the growth of online shopping, because Indians are tactile shoppers, who love to touch and feel an outfit before buying it. Over the years, e-commerce has been able to break this stereotype.
Brands are now also developing their offerings in various niche categories like infant wear, kids formal wear, swim wear, ethnic wear, etc., along with a wide range of merchandise for children.
THE CLICK BAIT
The e-commerce space has been particularly fruitful for fashion. Although children in certain age groups might not be online, their parents certainly are, and this access to the internet exposes parents to newer styles for their children. A lot of brands favour launching themselves online first as there is no capital involved. The kids’ fashion segment has been the highest growing segment in the category. As compared to the overall lifestyle segment, this segment has grown at more than twice the average pace. The growth of the online segment is quite apparent if we observe the sales figures of various online portals.
Exclusivity is another factor. There are some brands that are exclusive to one e-commerce portal as they believe that it helps them grow in a much better way. In the current scenario, kids have many options when it comes to clothing, like that of adults. Modern kids are much more aware than the previous generations, and are likely to make their own shopping decisions. Thanks to intense media exposure, they have also become brand conscious.
Another factor that is responsible for the immense growth of e-commerce is the discounts it offers. Discounts are known to be the major driver of sales. The price-conscious Indian consumer factors both convenience and discounts while buying products online. For all those parents who do not have time to go out and shop, online retail is immensely useful.
Since 2012, India has seen tremendous growth in Internet users amongst a wide age group of the population. Before this, the garments were purchased only from stores and shops. The ways of shopping are changing. As per reports, 75 per cent of the total internet users are below 35 years of age. This section is experiencing a 70 per cent year-on-year growth. As of now, around 481 million Indian users have access to the Internet, and by the year 2020, the number could increase to 600 million. In other words, online childrenswear market is set to grow four times as compared to now and will surely contribute to the growth of the e-commerce segment.
As compared to the west, in India, the maximum buyers belong to the age group of 0-5 years. As the childrenswear and accessories market is growing in India, it is attracting a lot of international brands to the country. Parents are constantly looking for more and more options for their children at a reasonable price. Because of the huge growth of the childrenswear market
in India, foreign brands are keen to enter this segment. In order to make that happen, Indian brands have started focusing on the supply chain, honing their product, improving their warehouse storage and logistics – as these factors are important to the growth of any apparel segment.
Brands have started embracing technology and innovation at a pace like never before. It is expected that by 2020, India will generate revenue of around $100 billion in the online retail segment, and out of this $100 billion, $35 billion will be through e-commerce segment (35 per cent share of this segment being the childrenswear industry). The new generation is a generation of the internet. It comes as no surprise that childrenswear has emerged as the new kid on the e-commerce block.
BECAUSE OF THE HUGE GROWTH OF THE CHILDRENSWEAR MARKET IN INDIA, FOREIGN BRANDS ARE KEEN TO ENTER THIS SEGMENT.