A rich profusion of factors have been instrumental in shaping kidswear as one of the most commercially viable segments of the Indian fashion industry. As a global hotspot for kids’ fashion, the Indian market is now rife with brands, private labels and fashion designers, both international and domestic. Amit Gugnani, Senior Vice President – Textiles & Apparel and his team of Experts from Technopak illustrate the current dynamics of the market.
The Indian apparel market is witnessing high growth in the kidswear segment. The Indian kidswear market in 2017 was estimated at Rs 66,904 crore accounting for 20 percent of total apparel market of the country. Kidswear is expected to grow at CAGR of 8.1 percent to reach Rs 145,445 crore by 2027, whereas men’s wear and women’s wear are expected to grow at relatively lesser CAGRs of 7.5 percent and 7.6 percent respectively. India has the world’s largest young population in the age group 0 to 14 years accounting for 29 percent (337 million) of the total population. Owing to the growth potential of this market segment, many international brands have entered India in last few years. With emergence of e-commerce, earlier hitherto markets have opened up, thus boosting growth of kidswear in India. With the increasing competition, success has to be a combination of high quality, good design and right value for money product.
BOYS WEAR MARKET
The Indian kidswear market is slightly skewed towards boys wear owing to 53 percent boy’s population for age group 0 to 14. This market was estimated at Rs 34,558 crore in 2017 and comprises 52 percent of the total kidswear market. It is expected that this segment will grow at a CAGR of 8.1 percent to reach Rs 75,325 crore in 2027.
Boys wear market is diversifi ed with various categories like t-shirts, shirts, denims, bottom wear, ethnic wear, winter wear and uniforms etc. For obvious reasons uniforms, t-shirts, shirts and bottom wear are the dominating categories, together contributing around 80 percent of the total boys wear market. However, t-shirts, shirts and denims categories are expected to show high growth with a CAGR of 9.6 percent and 11.8 percent respectively. The growing infl uence of media and western wear among kids has made certain categories like denims and t-shirts popular among them. The increasing presence of international brands in the country has provided access to wider assortments and options for the Indian consumers and has led to higher brand consciousness.
GIRLS WEAR MARKET
In 2017, the girls wear market was estimated at Rs 32,346 crore accounting for 48 percent of the kidswear market. It is expected to grow at a CAGR of 8 percent for the next decade to reach to Rs 70,120 crore in 2027.
The Indian girls wear market mainly comprises bottom wear, ethnic wear, t-shirts, shirts, denims, dresses, winter wear and uniforms, etc. Uniforms and ethnic wear are the two largest categories within this segment contributing around 53 percent of the girls wear market. Around 60 percent of India’s population is rural, thus dominance of ethnic wear in rural India contributes to its major share in the girls wear segment. With the growing brand awareness and media exposure to Tier -II and -III cities of India, categories like denims and t-shirts, shirts are expected to grow at high CAGR of 13 percent and 12.3 percent respectively.
INDIA: A HOTSPOT FOR GLOBAL KIDSWEAR FASHION
India has witnessed a signifi cant infl ux of brands (both international and domestic) in the kidswear space. Exposure to global fashion trends, rising disposable income of the Indian working class and presence to foreign brands acts as a catalyst for the growth of kidswear market. In addition to brands, private labels and Indian fashion designers are also exploring Indian market for kidswear. Many apparel retailers have launched their own private labels that are aff ordable and give better value for money. The market share of private label products in India is expected to increase from 4.5 percent in 2016 to around 10 percent in 2020.
Indian fashion retail industry is transforming rapidly and witnessing a shift from unorganised to corporatised retail. Penetration of corporatised retail is not limited to metros and Tier-I cities only, but is also growing in semi-urban markets. Share of apparel industry in corporatised retail in India was 22 percent in 2016 and this is expected to grow. With the implementation of GST, higher shift is expected from unorganised to corporatised sector. This shift to corporatised retail in apparel industry is making the kidswear market even more promising for brands and retailers.
DRIVERS OF CHANGE
Indian kidswear market is one of the fastest growing segments in the Indian apparel market. There are several factors behind it:
• India has 29 percent (337 million) of young population of age 0 to 14 years, making it an attractive market for brands.
• Rising middle class with growing disposable income is another prominent factor driving the growth of this segment.
• Shift of retail market from unorganised to corporatised retail.
• Awareness about fashion trends and brands is not only limited to metros and Tier-I cities, but is spreading among Tier -II and -III cities also, due to access to various media such as televisions, smart phones, movies, etc.
• Penetration of e-commerce and frequent promotions has resulted in convenient purchases by the Indian buyers in apparel sector.
• With the growing presence of international brands for kidswear in India, there is more competition in the market providing consumers with more options
• Growing demand of occasion specific clothing for kids.
• Growth of private labels in apparel sector offering low priced products compared to their branded counterparts.
• Emergence of kids as an individual buyer group influenced by mass media and western culture.
• The trend of “mini-me”, i.e. children are extension of their parents, encourage big brands to design cloths for kids as they do for adults.
THE ROAD AHEAD
The growth of kidswear market is also coupled with the entry of global players and increasing brand awareness among kids, making this segment lucrative. However the key challenge is to understand the nuances of the consumer behaviour, kidswear retailing and merits of value-pricing. Though there is a shift from unorganised to corporatised retails, majority of Indian parents prefer to buy children’s wear from local shops. The international and domestic players are struggling to reach these hyper-local points of sales.
In order to capture this market, the apparel retailers need to focus on quality and value-pricing. Occasion specific clothing is finding its way in the kidswear section. A well planned approach is required to understand the demands of kidswear market. Right business model backed by the strong supply chain will ensure brands capitalise on growth of kidswear market segment.