Not Just A Child’s Play!

Apparel - - Contents -

A look at the grow­ing chil­drenswear mar­ket in In­dia

In a coun­try like In­dia, which boasts a large pop­u­la­tion of young kids, chil­dren en­joy a spe­cial place. For the ap­parel mar­ket, the chil­drenswear seg­ment is a boom­ing, grow­ing mar­ket, with a lot of chal­lenges and re­wards.

Samir Alam re­ports.

Kids have it good today. It wasn’t very long ago that kids would be ex­pected to make do with slightly ill-fit­ting large clothes, sim­ply be­cause “they would grow into them” or “make do with hand-medowns” from elder sib­lings. Ear­lier, kids’ cloth­ing wasn’t ac­counted for in a fam­ily bud­get, and was low on the list of shop­ping pri­or­i­ties. Today, how­ever, the trend has rad­i­cally trans­formed, with par­ents and chil­dren be­ing equally de­mand­ing when it comes to va­ri­ety, style, and branded cloth­ing. This de­mand for chil­drenswear is now driv­ing the over­all ap­parel trade in In­dia to new heights and is es­ti­mated to con­sti­tute a nearly 20 per cent share in the to­tal ap­parel mar­ket. CHIL­DRENSWEAR: AN OVER­VIEW The chil­drenswear mar­ket has been one of the key in­di­ca­tors of the In­dian con­sumer so­ci­ety. As a prod­uct seg­ment which has evolved rel­a­tively re­cently, it demon­strates the en­thu­si­asm and en­gage­ment of the In­dian con­sumer mar­ket. With ever in­creas­ing dis­pos­able in­comes, greater mar­ket­ing and brand­ing ini­tia­tives, and a younger tech-savvy pop­u­la­tion, the de­mand for re­tail ap­parel has never been higher. With an ex­pected Com­pounded An­nual Growth Rate (CAGR) of 9.7 per cent, the In­dian ap­parel mar­ket is ex­pected to reach USD 115 bil­lion by 2026 from USD 46 bil­lion in 2017.

With greater glob­alised in­flu­ences, In­dian con­sumers are also at­tracted to all that such a di­verse mar­ket has to of­fer, with the chil­drenswear seg­ment now com­ing into vogue. Ac­cord­ing to Technopak, the chil­drenswear seg­ment has al­ready grown from USD 8.3 bil­lion in 2013 to USD 13.6 bil­lion in 2017, with pro­jec­tions to reach USD 22.4 bil­lion in five years. Dur­ing the same pe­riod, the menswear seg­ment is only ex­pected to grow at a CAGR of 7.5 per cent, while women’s wear to grow at 7.6 per cent. With a CAGR of nearly 10.5 per cent, chil­drenswear is one of the fastest grow­ing seg­ments in In­dian ap­parel. HEY BOY, HEY GIRL Within this seg­ment, there is a clear di­vide be­tween be­tween male and fe­male cloth­ing. The boys’ mar­ket is slightly weighted higher due to re­flec­tive pop­u­la­tion de­mo­graph­ics and com­prises about 52 per cent of the to­tal chil­drenswear mar­ket. The mar­ket has also ex­pe­ri­enced greater prod­uct dif­fer­en­ti­a­tion with a va­ri­ety of styles and goods, such as t-shirts, shirts, denim, eth­nic wear etc, be­ing more favoured among con­sumers, mak­ing up nearly 80 per cent of the prod­uct cat­e­gories. An­other ma­jor con­trib­u­tor to this growth trend is the in­creas­ing in­flu­ence of global me­dia, which has in­cul­cated a de­mand for emerg­ing styles within this ap­parel seg­ment. With such con­sis­tent rise, the mar­ket for boys’ cloth­ing is es­ti­mated to be just over USD 4.3 bil­lion and ex­pected to reach USD 9.3 bil­lion with a CAGR of 8.1 per cent by 2027.

The mar­ket for girls’ cloth­ing has also ex­pe­ri­enced sim­i­lar growth with USD 4 bil­lion in share and a CAGR of 8 per cent, reach­ing USD 8.7 bil­lion by 2027. This seg­ment has con­tin­ued

to demon­strate growth in prod­uct va­ri­ety and style, and has di­ver­si­fied at a greater rate than the boys’ mar­ket. This seg­ment not only con­sists of eth­nic wear, dresses, and den­ims, uni­forms, but has also be­gun to in­clude uni­sex items such as t-shirts, shirts, and bottom wear. De­spite this broad­en­ing, the core ma­jor­ity is still held by eth­nic wear and uni­forms, which make up nearly 53 per cent of to­tal prod­ucts. The core rea­son for this be­ing that de­spite shift­ing cul­tural trends, ma­jor­ity of the In­dian pop­u­la­tion is lo­cated in ru­ral ar­eas and still con­forms to dress codes con­sis­tent with the cul­ture.

As the in­flu­ence and reach of ur­ban­iza­tion and moder­nity in­crease, we can ex­pect to see more Tier II and Tier III cities and towns em­brac­ing global trends. With a pro­jected growth rate of 13 per cent CAGR for Tier II and 12.3 per cent CAGR for Tier III cities, there is bound to be more het­ero­gene­ity in prod­uct and gen­der based ap­parel items in the com­ing years, as girls get more ac­cess to boys’ cloth­ing seg­ments. How­ever, the core cul­tural trends are un­likely to shift, and as a re­sult eth­nic wear and dresses shall con­tinue to re­main the ma­jor prod­uct seg­ments in chil­drenswear go­ing for­ward. GROW­ING PAINS As the na­tion con­tin­ues to move for­ward on a path to glob­alised com­merce, we can ex­pect to see an even great pres­ence of in­ter­na­tional and do­mes­tic brands in the chil­drenswear mar­ket. Glob­alised com­pa­nies are now bet­ter positioned to trans­fer best prac­tices from one mar­ket to an­other in or­der to win over cus­tomers. With in­creas­ing me­dia ex­po­sure, wel­com­ing fash­ion trends, ris­ing dis­pos­able in­come among the work­ing class, eas­ier ac­cess to e-com­merce chan­nels and rise of lo­calised pre­mium brands, In­dian con­sumers have more op­tions and means to ful­fil their de­sires in even erst­while niche seg­ments like chil­drenswear.

In this con­text, re­tail­ers have also dis­cov­ered an ef­fi­cient and eas­ier means to reach con­sumers - so­cial me­dia and e-com­merce chan­nels. The open­ing up of dig­i­tal sales chan­nels has al­lowed a va­ri­ety of niche prod­uct seg­ments to find new con­sumers. Com­pa­nies such as Firstcry and Hop­scotch had ex­clu­sively tar­geted chil­drenswear seg­ments on the in­ter­net and can of­fer a large va­ri­ety of prod­ucts at af­ford­able rates. Ad­di­tion­ally, their dig­i­tal plat­form al­lows them to reach across dis­parate re­gions and ser­vice cus­tomers from all back­grounds. An­other ma­jor part of this trend has also been the abil­ity of such com­pa­nies to tar­get their prod­ucts to­wards younger con­sumers via dig­i­tal chan­nels.

As do­mes­tic and in­ter­na­tional life­style brands fol­low suit, we are dis­cov­er­ing that kids have great in­flu­ence in buy­ing de­ci­sions within the house­hold. As com­pa­nies be­come more aware of the con­sum­ing power wielded by kids, they are act­ing in a man­ner so as to win them over. Nu­mer­ous pri­vate la­bels, brands, and de­sign­ers are now work­ing to earn the at­ten­tion of the chil­drenswear mar­ket and break into this bur­geon­ing seg­ment. We are al­ready see­ing com­pe­ti­tion be­tween th­ese play­ers to of­fer stylish yet af­ford­able op­tions so that par­ents find it eas­ier to give into their chil­dren’s de­mands. Such fac­tors are, there­fore, con­tribut­ing to the rise in mar­ket share of pri­vate brands which is ex­pected to rise from 4.5 per cent in 2016 to nearly 10 per cent by 2020. SMALL CON­SUMERS, BIG GROWTH This push from busi­nesses is also ac­com­pa­nied by the chang­ing mind­set of the pay­ing con­sumers - the par­ents. While the prod­ucts might be for chil­dren, the con­sumer is still the pay­ing adult, who has changed rad­i­cally in the last 20 years. Th­ese younger par­ents are or­ga­nized in dif­fer­ent fam­ily set­ups such as dual in­come house­holds, where both par­ents work. As a re­sult of this new sys­tem, both par­ents are ca­pa­ble of di­rect­ing their dis­pos­able in­come to­wards their chil­dren. At the same time, th­ese par­ents are more tech-savvy than ear­lier gen­er­a­tions and im­pacted by the dig­i­tal age. As a re­sult, they are more sen­si­tive to no­tions of style, fash­ion, and brand value when shop­ping for clothes for their chil­dren.

None of th­ese changes are sur­pris­ing when we con­sider the cur­rent and evolv­ing de­mo­graph­ics of the In­dian pop­u­la­tion. Ac­cord­ing to a study by Deloitte, In­dia has the largest num­ber of work­ing young peo­ple, es­pe­cially in the 25-35 year old de­mo­graphic, ie the mil­len­nial gen­er­a­tion. This seg­ment of peo­ple makes up nearly 35 per cent of the na­tional pop­u­la­tion, and is poised to drive con­sump­tion in the In­dian econ­omy. Along with this, In­dia also has the world’s largest pop­u­la­tion of youth un­der the age of 14 years. With nearly 335 mil­lion chil­dren in the un­der-14 seg­ment, and a bustling mil­len­nial pop­u­la­tion em­pow­ered by em­ploy­ment, wages, and credit, there is lit­tle doubt that the chil­drenswear seg­ment will con­tinue to grow well into the next decade.

@Gini & Jony

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