Amit Gugnani, Sr. VP-Fashion, and Kanti Prakash Brahma, Principal Consultant-Fashion, Technopak discuss about the burgeoning kidswear market in India and what it will take for retailers to sustain in this highly competitive environment.
Market Size & Growth
India has etched its name amongst the topmost promising markets for apparel due to the burgeoning economic activities taking place here and the ever widening consumer base. The Indian apparel market is expected to grow at a compound annual growth rate (CAGR) of nine percent, from US$ 41 billion in 2013 to US$ 102 billion in 2023. In 2013, the kidswear segment, at US$ 8.3 billion, alone contributed 20 percent of India’s entire apparel market. However, given its higher growth rate, this share is expected to increase to 22 percent by 2023.
Boys & Girlswear
The kidswear market is somewhat skewed towards boyswear, which is estimated at US$ 4.3 billion, as compared to the US$ 4.0 billion-worth girlswear market. However, with the increase in spending on the girl child, the girlswear market is expected to catch up with the boyswear market in the near future. According to sources, the market for girlswear will grow at a CAGR of 11 percent over the next decade, while that for boyswear will see a rise by 10 percent.
Uniforms and t-shirts, or shirts, are the two major categories within the boyswear market, which contribute 57 percent of the total market. Denims and t-shirts are the high growth categories within this segment and are expected to register CAGRs of 15 percent and 11 percent, respectively, over the next decade.
On the other hand, uniforms and ethnicwear are two of the largest categories within the girlswear market. However, here too the westernwear segment seems to be more popular than their traditional counterpart. Categories like denims and t-shirts are witnessing a higher growth than their traditional counterparts.
Some distinct factors like changes in the family system, increased spending on children, growing brand awareness among kids, and greater focus on the kidswear market by organised players are some of the drivers that have contributed significantly to the growth of the kidswear market in India.
Urban India today is characterised by a nuclear family with double-income parents, who are willing to shell out the additional moolah on their children. Consequently, the spending on children’s apparel, with better brand image and quality, has received a significant boost. At the same time, Indian kids in both urban and semi-urban parts of the country are increasingly exposed to various media and are thus aware of brands which cater to them. They have also started participating actively in purchase decisions related to their apparel.
Organised retailers and brands too, on their part, have made equal contribution to the growth of the kidswear market. Some have even invested time and money in establishing brands, which target the requirements of children as well as parents. By doing so, they have managed to attract consumers through the right product assortment, better visual merchandising, and focused advertising and promotional strategies.
Although the branded kidswear segment has recorded an enviable growth in recent years, it still remains a largely unbranded market, with products sold mostly through unorganised retail channels. The low average lifespan of children’s apparel, a result of the growing height of children, has forced many value-conscious parents to hold back on spending on children’s apparel, especially in the medium, economy and low-end of the market.
However, market dynamics vary drastically in the premium and super-premium categories. Brands are a very important decision-making criterion for parents and children in these segments. In fact, some well known designers and retailers have even begun catering to the demand for children’s bespoke apparel.
Most of the organised players in the kidswear market initially focused only on westernwear categories like denim, shirts, t-shirts, etc. However, brands and organised players have now started foraying into children’s ethnicwear categories and are offering ethnically styled products for kids.
Brands and retailers, which earlier catered only to adults, have extended their product portfolio to include childrenswear and are attempting to transform themselves as a complete family shopping destination. In this respect, even international brands have begun offering children’s apparel.
Some Indian manufacturers, whose sole focus earlier was the export market, have started reorienting themselves to meet the growing demands within the country. To address this need, they have come up with their own brands and independent retail operations. Another segment that is recording impressive growth is the school uniforms market. This is owing to a rise in the number of schools and a decline in drop-out rates. In high-end schools, the increasing competition and the desire to look smart has amplified brand consciousness among students.
Further, many schools see uniforms as an extension of their institution’s image and ensure that the uniform refl ects the image associated with the school. The market now sees different school uniforms depending on the season, occasion, class, etc. Online retailing has managed to penetrate into the kidswear segment. Alongside the rapid acceleration of internet penetration, India’s consumers have several incentives to select online retailing as their preferred channel for fashion purchases, both for themselves as well as their children.
Online fashion stores offer the unmatched ease of shopping using user-friendly interfaces, wider product assortments, shorter delivery cycles and lucrative options like cash-on delivery in order to attract consumers to their portals. In addition to kidswear-specific online shopping stores, several kidswear brands also offer online shopping facilities. Even fashion-focused online retailers have dedicated a substantial share of their websites to the kidswear segment.
Despite the interesting growth story of the kidswear segment, a lot remains to be achieved in this market. The opportunities within this segment are lucrative, but tapping these requires well-formulated strategies and high levels of commitment. Brands and
retailers also have to ensure better penetration beyond urban pockets and cater to the price-sensitive children’s segments in semi-urban and rural India. Some well-known kidswear brands have struggled in terms of planning store expansions with adequate prudence and analysis and thus have been forced into rolling back plans or have got entangled in high debt traps and unwarranted business litigations.
New entrants could shorten their own learning curve by identifying the challenges and roadblocks faced by the early entrants as well as existing players. The ability of brands and retailers to address the specific requirements of children as well as their parents, and to offer fashion solutions rather than mere products will be critical for their success.