IN­TER­NA­TIONAL RE­TAILER THE SCI­ENCE BE­HIND THE ART OF DE­LIGHT­ING ‘LIT­TLE’ CUS­TOMERS

Images Retail - - CONTENTS - – By Shubhra Saini

Founded in 1946 by Sir Pi­etro Catelli in Italy, Art­sana was once a small fam­ily con­cern which has now be­come a multi­na­tional Group op­er­at­ing all around the world in over 115 dif­fer­ent coun­tries.

Founded in 1946 by Sir Pi­etro Catelli in Italy, Art­sana was once a small fam­ily con­cern which has now be­come a multi­na­tional Group op­er­at­ing all around the world in over 115 dif­fer­ent coun­tries. Art­sana Group op­er­ates into two main busi­ness ar­eas: Baby Care and Health­care. Chicco, the flag­ship brand of Art­sana is a cross cat­e­gory mas­ter brand on the world baby care mar­ket, leader for baby prod­ucts in the 0 to 36-month range. In an ex­ten­sive in­ter­ac­tion with IM­AGES Re­tail, Ra­jesh Vohra, CEO, Chicco In­dia, talks about the busi­ness propo­si­tion and fu­ture prospects of the brand in the coun­try.

The to­tal turnover of the com­pany and growth rate over the past few years:

The con­sol­i­dated global turnover of Art­sana Group was €1.42 mil­lion in 2015 and has been only grow­ing over the years. The group’s In­dia op­er­a­tions started in 2010. Over the past 6 years, Chicco has been able to make its mark in the In­dian baby care mar­ket sig­nif­i­cantly and has been grow­ing at a CAGR of above 35 per­cent since then.

Mar­ket Share:

Chicco of­fers a wide and dis­tinc­tive range of baby care prod­ucts re­lated to nurs­ing, cos­met­ics, toys, travel (strollers, high­chairs, car safety seats) and in­fant fash­ion. The en­tire prod­uct range ad­heres to the high­est in­ter­na­tional stan­dards of qual­ity and safety. We op­er­ate in mul­ti­ple cat­e­gories and our share varies as per the cat­e­gory. Un­for­tu­nately, for most of th­ese cat­e­gories, or­gan­ised in­dus­try data is not avail­able.

At an over­all level, now we are a strong ref­er­ence brand in the coun­try, grow­ing faster than the cat­e­gory and gain­ing mar­ket share across board. We aim to be the lead­ing brand across cat­e­gories in the next five years.

The Foot­print:

Chicco has an Om­nichan­nel pres­ence in In­dia. In­dia is a very frag­mented mar­ket, hence to cater to our con­sumer ef­fec­tively, we op­er­ate through mul­ti­chan­nel dis­tri­bu­tion in­clud­ing Chicco ex­clu­sive brand stores, spe­cialty baby shops, on­line part­ners and dis­tri­bu­tion cen­tres.

We have 12 Chicco ex­clu­sive brand stores and hos­pi­tal cor­ners spread across ma­jor met­ros in­clud­ing Del­hincr, Mum­bai, Ban­ga­lore, Kolkata and a few oth­ers. We are present in over 100 cities through our dis­tri­bu­tion net­work. All our stores are fran­chisee stores.

Choos­ing a Fran­chisee:

We want to work with like­minded part­ners who are will­ing to build re­la­tion­ship for long pe­ri­ods of time.

Foot­falls:

Since we are a spe­cialised baby store, our foot­fall varies as per the lo­ca­tion of the store. For ex­am­ple, in the mall, our foot­fall is around 1500 - 3000 and in high streets, it is around 750 -1500 a month.

Size of the mar­ket for the prod­ucts of the com­pany in In­dia and the growth rate:

As per our in­ter­nal es­ti­mates, the or­gan­ised mar­ket for cos­met­ics is around Rs 1400 - 1600 crore and grow­ing at a CAGR of ap­prox­i­mately 15 per­cent. Toys is ap­prox­i­mately Rs

3000 - 3500 crore and grow­ing at around 12 per­cent CAGR. Nurs­ing and ju­ve­nile are smaller at this stage es­ti­mated to be around Rs 500 crore and Rs 250 crore in­dus­tries re­spec­tively.

Fac­tors Pro­pel­ling the In­dus­try’s Growth:

De­mo­graph­i­cally, In­dia is home to over 110 mil­lion ba­bies con­tribut­ing around 11 per­cent of the world pop­u­la­tion with a high birth rate of 19.3 births per 1000 in a year.

The coun­try is po­ten­tially a big mar­ket for the baby care in­dus­try. Grow­ing cat­e­gory aware­ness and in­creas­ing dis­pos­able in­come of newage par­ents are help­ing this in­dus­try to grow fur­ther.

Trends:

Par­ents al­ways want to give the best to their ba­bies, with­out com­pro­mis­ing on the qual­ity and safety as­pects of the prod­uct. Some im­por­tant trends that we are wit­ness­ing to­day are:

IN­CREASED CAT­E­GORY AWARE­NESS: The grow­ing In­ter­net pen­e­tra­tion and well­travel new-age par­ents are help­ing in in­creas­ing cat­e­gory aware­ness sig­nif­i­cantly. By search­ing on­line as well as when they travel abroad, they are aware of all types of prod­ucts that are avail­able – so they have am­ple knowl­edge be­fore they pur­chase any­thing. IN­CREASED DIS­POS­ABLE IN­COME: Fam­i­lies are spend­ing more and more on their baby’s well-be­ing.

IN­CREAS­ING NUM­BER OF NU­CLEAR FAM­I­LIES & WORK­ING MOTH­ERS: In the ab­sence of a sup­port sys­tem from the ex­tended fam­ily, par­ents to­day need more tools and en­ablers in terms of baby prod­ucts for their up­bring­ing.

Mar­ket Po­si­tion­ing & Cus­tomer Pro­file:

Chicco is a con­tem­po­rary brand, al­ways by the side of to­day’s mums, dads and chil­dren. It is a brand that spends 36 months liv­ing near them and with them at all times, and hence qual­ity and safety are the two most im­por­tant pil­lars of all our of­fer­ings.

Prod­uct Range:

FASH­ION: De­signed in Italy, Chicco fash­ion is one of the most dis­tin­guished lines in the 0 -4 year age group. In ad­di­tion to fash­ion, it also has a wide range of daily re­quire­ments like baby romper and suit. All baby ap­par­els are de­signed for in­tu­itive play­ful­ness and com­fort of the baby. The ma­te­ri­als used to pro­duce our prod­ucts are tested ac­cord­ing to strin­gent qual­ity stan­dards. Chicco shoes are light weight and flex­i­ble. They come with a phys­i­o­log­i­cal in­sole that ac­cen­tu­ates nat­u­ral move­ment.

NURS­ING: Chicco of­fers a wide range of nurs­ing prod­ucts re­lated to breast­feed­ing. The Boppy nurs­ing pil­low, Ster­il­i­sa­tion tools, Soothers, Wean­ing aids, Pro­tec­tion (from in­sects and the sun), and Ac­ces­sories. All th­ese prod­ucts are BPA free.

BABY COS­MET­ICS: The Baby Mo­ments range of baby cos­met­ics are parabens free, hy­poal­ler­genic and clin­i­cally tested. They are free from al­co­hol, SLS and SLES. Re­cently, we have launched another in­no­va­tive range of cos­met­ics by the name Nat­u­ral Sen­sa­tion which is in­spired by the com­po­si­tion of ‘vernix caseosa’ (a layer that pro­tects baby’s skin in the last trimester in­side mother’s womb). The range is free from phe­noxyethanol, min­eral oils and colour­ing agents.

JU­VE­NILE: We are one of the lead­ing and pre­ferred brands in this cat­e­gory. Chicco of­fers a wide range of first strollers, se­cond strollers and duo sys­tems (a com­bi­na­tion of stroller and car safety seat).

In ad­di­tion to strollers, we of­fer the widest range of baby car­ri­ers, high­chairs, bounc­ers and car safety seats. All our prod­ucts of ju­ve­nile range are ho­molo­gated to in­ter­na­tional stan­dard of qual­ity and safety.

TOYS: Chicco range of toys in­cludes in­fant and preschool toys. All our prod­ucts are de­signed and de­vel­oped to give the right stim­uli for de­vel­op­ment of sen­sory, mo­tor, and cog­ni­tive skills. It of­fers in­no­va­tive prod­ucts like First Dreams (mu­si­cal pro­jec­tion toys), Rat­tles that are paint free, Sit N Ride, Trikes, ra­dio con­trol ve­hi­cles and li­cens­ing toys of Dis­ney, Du­cati as well as Fiat.

Sales Split Be­tween Dif­fer­ent Brands:

Fash­ion and travel are the lead­ing cat­e­gories in our ex­clu­sive stores and shop-in­shops, whereas nurs­ing and cos­met­ics are the main sell­ing cat­e­gories in dis­tri­bu­tion chan­nel. Fash­ion and baby travel are big cat­e­gories in Chicco stores fol­lowed by Nurs­ing and Cos­met­ics.

Im­ported or Made in In­dia:

As a com­pany, we be­lieve in of­fer­ing the same global prod­uct ex­pe­ri­ence to all our con­sumers across the world. There­fore, we im­port most of our prod­ucts from our own man­u­fac­tur­ing fa­cil­i­ties in

Italy. We also im­port from Hong Kong as well as make in In­dia. Ap­prox­i­mately 30 per­cent of the prod­ucts sold in In­dia are man­u­fac­tured lo­cally.

The Cat­e­gories:

Chicco’s vast ex­pe­ri­ence in the in­fant world has now been con­sol­i­dated by an Ob­ser­va­tory:

Fa­cil­ity – Chicco Osser­va­to­rio (Baby Re­search Cen­tre), ded­i­cated to in­creas­ing our knowl­edge of chil­dren of from 0 to 3 years of age and their psy­cho-phys­i­cal, emo­tional and so­cial needs.

Osser­va­to­rio ob­serves th­ese as­pects very closely, col­lab­o­rates with ex­perts in the med­i­cal-sci­en­tific world, com­mu­ni­cates with the ed­u­ca­tion fa­cil­i­ties and con­stantly gath­ers sug­ges­tions from moth­ers and fa­thers to gain as much knowl­edge as pos­si­ble on the world of chil­dren, and use it to de­vise and de­velop spe­cific prod­ucts for each growth phase.

In line with our global in­no­va­tions, we reg­u­larly keep on in­tro­duc­ing new prod­ucts in In­dia to ad­dress new and de­vel­op­ing con­sumer needs as well as main­tain­ing fresh­ness in the prod­uct port­fo­lio.

The Price:

Price range varies with the cat­e­gory.

Fash­ion: from ₹499 to ₹5,000;

Nurs­ing: from ₹129 to ₹15,000;

Cos­met­ics: from ₹65 to ₹899;

Ju­ve­nile: from ₹2,490 to ₹30,000 Toys: from ₹199 to ₹7,000

Nurs­ing and cos­met­ics are the main sell­ing cat­e­gories in our dis­tri­bu­tion chan­nel.

The Lo­ca­tion:

We need a lo­ca­tion which is in a high traf­fic area with a rel­e­vant con­sumer pro­file and that is why malls suit us just fine. We al­ready have many shop-in-shops func­tional and run­ning suc­cess­fully. We are open to more shop-in-shop op­por­tu­ni­ties. We feel this can add lot of value to both, brand and the part­ner.

The Stores:

Glob­ally, we have large for­mat stores. How­ever, in In­dia, con­sid­er­ing the high rental cost, we have an av­er­age store size of 1,000 sq. ft.

We have two store for­mats:

Chicco ex­clu­sive brand stores (be­tween 1,000-2,000 sq. ft.), and

Hos­pi­tal cor­ners

Chicco ex­clu­sive stores of­fer all our five range of baby prod­ucts. In hos­pi­tal cor­ners, the em­pha­sis is more on the nurs­ing and cos­met­ics range as they are the im­me­di­ate need prod­ucts.

Cus­tomer Loy­alty:

Our loy­alty pro­gram Chicco Club is ex­clu­sive to our Chicco stores. We see lot of value ad­di­tion com­ing from this pro­gram. Ap­prox­i­mately 30-50 per­cent of our con­sumers are loyal in dif­fer­ent lo­ca­tions.

Mar­ket­ing Strat­egy:

We have a well-rounded mar­ket­ing strat­egy with a mix of ATL and BTL ac­tiv­i­ties. Con­sid­er­ing our tar­get au­di­ence is new-par­ents of 0-3 years of ba­bies, our em­pha­sis is more on tar­geted ac­tiv­i­ties to reach out to this spe­cific au­di­ence through dig­i­tal, di­rect mar­ket­ing and other con­sumer ac­ti­va­tions.

For Chicco stores, our em­pha­sis is on lead gen­er­a­tion ac­tiv­i­ties through di­rect mar­ket­ing, dig­i­tal and most im­por­tantly mall ac­ti­va­tion. In ad­di­tion, we do mul­ti­ple ac­ti­va­tions with our ex­ist­ing con­sumer base to gen­er­ate re­peat pur­chase and cross cat­e­gory pur­chase.

Ex­pan­sion Strat­egy:

We are very se­lec­tive to open new store how­ever given good store lo­ca­tion and com­mer­cials, we are open to ex­plor­ing as well. We are al­ready present in all the four re­gions, though there is un­tapped op­por­tu­nity in many top cities which can be ex­plored.

In­no­va­tions:

We are one of the most pro­gres­sive and evolved baby care brands in the world. We keep on bring­ing new and in­no­va­tive con­cepts every year in all prod­uct cat­e­gories. For ex­am­ple, we have re­cently launched se­cond stroller Oh­lala which is sturdy yet light; just 3.8 kg which can be lifted with only one fin­ger. This is very im­por­tant in­no­va­tion be­cause a stroller should be light for moth­ers to han­dle. We have first stroller Cortina CX to be used from 0m+, the best seller stroller meet­ing all the re­quire­ments of new age par­ents.

Our Boppy nurs­ing and feed­ing pil­low is one of the most dis­tin­guished prod­ucts and 14 times award win­ning prod­uct.

The Fu­ture:

As a 100 per­cent sub­sidiary, we are in In­dia with long term plans. We do not have any spe­cific time-bound tar­get to open new stores. We eval­u­ate each op­por­tu­nity in­di­vid­u­ally and plan ac­cord­ingly. We are will­ing to work with in­vestors who have long term per­spec­tives.

On­line & Ecom­merce:

We are present on all the im­por­tant baby e-com­merce chan­nels. E-com­merce is an im­por­tant chan­nel for us. It’s the first touch­point for the con­sumers when they start search­ing for baby prod­ucts and the con­ve­nience of the medium is very well es­tab­lished now. Since we are a niche brand, we do not en­cour­age dis­count­ing. Our cur­rent mix is around 12-15 per­cent and we would like to main­tain it at that level.

So­cial Me­dia:

On­line, es­pe­cially so­cial me­dia is a very im­por­tant medium for us for cre­at­ing brand aware­ness and pref­er­ence. We are fairly ac­tive on Face­book and In­sta­gram as th­ese pro­vide op­por­tu­nity for com­mu­ni­ca­tion as well as con­ver­sa­tion. In line with our brand po­si­tion­ing, our ap­proach is to pro­vide more and more use­ful con­tent to new-age moth­ers so that brand can be of help in their jour­ney of moth­er­hood.

We do not have our own e-com­merce chan­nel at this stage, there­fore we do not link it di­rectly with rev­enues. Our in­tent on on­line and so­cial me­dia is to gen­er­ate brand aware­ness and ed­u­cate more and more con­sumers about Chicco. In turn, we get sig­nif­i­cant surge in search, traf­fic on our web­site and ul­ti­mately traf­fic in our shops and on­line chan­nels.

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