Pawan Agarwal, CMD, PB Retail talks about the current scenario in kidswear retail, the challenges faced and what will assure the success of kidswear retailing in the long run.
Q. How do you rate the current scenario in kidswear retail in India?
According to the “Global Market Review of Childrenwear Forecasts to 2012,” the top 10 global markets – US, UK, France, Germany, Spain, Italy, China, India, Russia, and Japan – accounted for an estimated US$ 92.6 bn in children’s apparel retail sale. By 2012, the same top 10 markets are expected to account for an estimated US$ 131.5 bn in kidswear retail.
If we talk about India, children grow quickly and are generally rough on clothing; so parents tend to look at apparel as being both disposable and functional. Hence, stores providing a wide selection of fashionable offerings at low prices increasingly generate traffic. Although style is important from parent’s perspective, high-cost brands are generally reserved for special occasions. Emerging powerhouse market like us holds promise for kidswear because of the sheer size of the retail industry as well as the growing number of wealthy people and increasing fashion sense.
According to an IRIS retail report, although still small at Rs 3,000 crore, modern retail in children’s apparel is growing at 24-25 percent annually, which is 5.3 percent of the overall modern apparel retail market and 11.4 percent of the children’s apparel retail market – branded and unbranded.
Retail consultancy Technopak Advisers estimates the overall kidswear market growing at a CAGR (compounded annual growth rate) of around 10-11 percent.
Given the current demand and improved supplies, by 2011-12 the modern kidswear market is expected to touch Rs 3,800 crore, according to IRIS. The boys’ and girls’ wear market sizes remain almost equal in value terms.
Q. What are the key drivers of kidswear retail in India?
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 of the 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 and wearing.
Q. When was My Mart launched? What was the investment? What makes My Mart different from other kidswear retailers?
My Mart promoted and owned by PB Retail is a pioneer company in the kids category. We launched the brand in March 2011 to provide a complete one-stop shopping experience for the needs of infant and kids across all categories- all under one roof.
At that time we invested close to Rs 15-20 lakh to open our first store in Dwarka.
Everyone is doing their bit to stay here. We are sincerely trying to understand and address the requirements of the consumers in this category. Our mantra is to provide variety and quality at a pocket-friendly price. I therefore believe we are the only retailer in this category who is focussing on various requirements from apparel (ethnic wear, party wear, formal, casuals) to accessories, toys, furniture, stationary, bath accessories, and sanitary. No one in the market is retailing such variety under one roof to the consumers and that too at an affordable price.
Q. What is the success story of My Mart till date?
We have created a strong customer base in the areas where we are present and we are also getting huge response from the far-away places across Delhi-NCR. In just one year of our operation, we have opened five stores which are doing exceptionally good. We are growing fast. Presently, we are running 6 stores in Delhi-NCR and plan to open 20-25 more by the year 2012.
Our prime concern is the proper upbringing of existing stores and once we’ll get accustomed with the operational proceedings and start extracting the best possible returns from our resources, we’ll definitely expand our size.
We are providing variety at an economical price targeting the middle-class urban stratum of the society.
Q. What changes have you encountered in this retail segment since your launch last year?
The retail segment has shifted from the “Sasta” concept. Consumers now want specialised stores and have moved away from “every commodity under one roof.” The reason behind it is simple, multi-branded outlets may compromise in quality but a specialised store like My Mart, which is dedicated for only kids and children, will provide the best for your little ones with a single focus on huge variety amongst their products, clothes, or accessories.
Q. What are the major challenges faced by a kidswear retailer?
Kidswear sector has emerged as one of the biggest industries in the world. Children are becoming leading consumers of garments, footwear, and other related products. However, no matter how lucrative, it is not a child’s play to manage kidswear business. Challenges in kidswear are mainly about managing pricing and inventory. These are the two factors powerful enough to turnaround the buying behaviour of customers who are accustomed to buying from unorganised sector, and graduate them to branded kidswear. Also, managing a profitable kidswear business with skyrocketing rentals is quite a daunting task.
However, most hurdles can be crossed by concentrating on the quality of the products, strategic pricing, and, most importantly, providing the variety, on which we concentrate. By addressing these issues, any company can sail through and spread its wings to reach new levels.
Q. What impact the entry of the foreign retailers in this segment has on the local players and the industry as a whole?
Ans. Until there is no FDI in retail, the impact of foreign retailers on local players won’t be a big matter of concern. Consumer needs variety which Indian industry as a whole is providing. With established local players, the impact will remain unseen until there is no FDI in multi-brand retail.
Q. What are the big trends noticed in the kidswear retail in India in terms of positioning, investment, store design, and marketing?
The shelf life for kidswear and accessories is very less. As the kids grow, their taste and preferences change. So we need to take care of this aspect. We have noticed that when kids come for shopping with their parents, they invest most of their time at the toy and gaming section. Girls prefer picking their cloths themselves and suggest their choices to their parents.
Keeping all this in mind, we need to keep the kids and their parents engrossed when they step. The look of the store must be kept lively and colourful so that every child can relate to it. As far as designing is concerned, one of the biggest trend noticed these days is that retailers are keeping it bright and decorated with cartoon characters. Also some of the accessories and toys must be in their reach so that they can play and experience the product before actually deciding whether to buy it or not. The ambiance of the store also plays a vital role in retaining the customers especially the kids inside the store, for long. It must be affable, pleasing along with music for their entertainment.
Not only the store design, the positioning of the stores also plays an important role in the success of the brand.
Q. What are your growth and expansion plans for the next five years?
As the business grows, we will expand likewise. We are planning to open more and more stores in Delhi-NCR to reach maximum consumers. For this, we would go for a franchise model apart from our exclusive outlets. After making a good presence in the region, we would consider expansion in other major cities such as Mumbai, Chennai, Pune, and Hyderabad and also in the tier II and III cities. For the year 2012, we are also planning to expand our specialised stores and profit centres. In the next five years, we plan to have a strong presence in major cities.
Q. How do you think the Liliput episode is going to affect the kidswear retail business? In your words, what could have been the reason behind the downfall?
I would like to make a point here that only increasing the retail space in terms of number of stores for rapid expansion is not enough to sustain in the kind of market kidswear has formed. If the retail presence is not keeping pace with the sale, there is no point going beyond a certain number.
There is no denying the fact that there is a strong brand recall for Lilliput; however, the current scenario will give opportunity for the small players to emerge if the strategy is planned well and follows the “economy, quality, and Variety” policy as we do at My Mart.
Q. My Mart has a tie up with which foreign brands ? How does that affect the business?
We have tied up with Italian baby care brand Chicco and Singapore-based Pigeon. We have housed a variety of baby products, including sippers, teethers, nursing bottles, nipples, and pacifiers from Chicco and Pigeon. We have witnessed a huge demand for these brands.
Q. Are there any plans to foray into other retail segments as well? If yes, which segments, when, and why?
Right now our core focus is to build our brand My Mart through the expansion of our EBOs. The next course of action will be entering the e-space as the Internet penetration is increasing day-by-day. The e-commerce is growing its own niche customer base and garnering online buyers. We would also go for franchise model to expand our brand presence further.
Q. Where are your stores present? What difference is seen in the business and footfall of your stand-alone stores and the one present in a mall?
We have two stores in Faridabad, two in Dwarka, and one in Ranibagh. Recently, we added one more store in Dwarka which makes a total of three in Dwarka itself.
We witness tremendous response at all our stores. Both stand-alone stores and the one in Manhatten mall in Faridabad attract a lot of consumers. However, recently we have witnessed more footfall at our stand-alone stores in Dwarka and Ranibagh as they are centrally located in the market place.