India’s apparel market today is estimated to grow at a positive 9 percent, with the rising income levels of the Indian working class increasing the wallet share of apparel. More specifically, the growth will be driven by an increase in both the per capita consumption and the average expenditure on apparels. Of the core categories, although menswear constitutes the largest apparel market share, it is kidswear that is growing at the fastest pace.
The factors fuelling the growth of the kidswear segment include the high number of children, the growing exposure of both parents and children towards fashion trends, and the higher number of double-income parents leading to higher household incomes and, consequently, higher disposable incomes. Overall, the kidswear market makes up approximately 20 percent of the total apparel market, and it is expected to grow at a CAGR of 10.5 percent over the next ten years. The segment is currently estimated at worth Rs 45,220 crore (US$ 8,222 million) and is projected to reach Rs 123,030 crore (US$ 22,369 million) by 2023.
Traditionally, the unorganised players who offered a wide range of styles at low prices and concentrated on higher volumes dominated this market. However, this is gradually giving way to branded clothing becoming the popular option for kidswear. Many domestic and global companies are extending their portfolios, and expanding their geographies, in order to leverage the growth of the kidswear market in India.
Further, both parents and children are becoming extremely brand-conscious, resulting in the multifold growth of the branded sub-segment. Parents are not the sole decision-makers today, as children, from a very early age, take active part in the shopping process. Once they start going to school, peer pressure and exposure to a wider range of media makes them much more aware of the latest trends, celebrity styles, their favourite cartoon characters, et cetera, as compared to earlier generations. Thus, today’s children know exactly what they want to wear and how they would like to be dressed. This has created another opportunity for brands and retailers in terms of expanding their product portfolio and attracting new customers.
By engaging kids at an early age, brands can look to building a loyal customer base for a lifetime. Within the kidswear segment, boyswear has the larger share (52 percent). Currently, it is worth Rs 23,390 crore (US$ 4,253 million) and is estimated to grow at a CAGR of 10 percent to reach Rs 61,360 crore (US$ 11,156 million) by 2023. In contrast, the girlswear market stands at Rs 21,830 crore (US$ 3,969 million) and is poised to grow at an optimistic CAGR of 11 percent to reach Rs 61,670 crore (US$ 11,213 million) by 2023.
Across both boyswear and girlswear, denim remain the fastest growing category, registering CAGRs of 15 percent and 16 percent, respectively. Both children and parents consider denim fabric and styles more fashionable as well as wearable. As a result, brands are increasing the share of their denim merchandise in order to tap into this lucrative opportunity.
School uniforms is another category where growth is expected for both boys and girls, especially with the greater focus on girls’education. It comprises the largest market share within both segments. Currently, boys’ school uniforms is worth Rs 7,410 crore and is poised to grow at a CAGR of 10 percent, while the girls’ school uniforms category is growing at 11 per cent with a current worth of Rs 6,590 crore. While, after uniforms, it is T-shirts and bottomwear that account for the largest market share within the boys segment, in the girlswear segment, ethnicwear and dresses dominate.
Emerging Markets
Geographically, the growth of kidswear is no longer restricted solely to urban regions. The segment’s growth and trends are gradually percolating into tier-I, -II, and -III cities as well, with cities like Chandigarh, Nasik, Pune, and Jaipur registering the growth of branded kidswear.
Notably, these markets were traditionally unorganised and unbranded. Trends similar to the ones in urban areas, that is, more double-income parents, nuclear families, and education, and fewer number of children in families, are seen in the smaller cities as well. This, in turn, has led to a growing desire to provide branded and fashionable clothing to children in these smaller cities.
Further, with the burgeoning demand for kidswear, brands are also focusing on opening exclusive kidswear stores, besides extending their product portfolio. Various domestic and International apparel brands have opened exclusive kidswear outlets in the metros and mini-metros, which offer a complete range of apparel and accessories complementing the look.
Segments
Additionally, parallel with the growth of the branded kidswear segment, there has been a growth in the average expenditure on the segment. Overall, the segment can be divided into fi ve broad pricing strata – super premium (above Rs 2,500), premium (Rs1,000 to Rs 2,500), mid (Rs 500 to Rs1,000), economy (Rs 250 to Rs 500), and lower (up to Rs 250).
Although brands are spread across all price segments, the mid-segment is the largest, and the fastest growing. Again, parents are now also willing to spend on luxury brands. Of late, there has been an infl ux of international labels into India, with many of them concentrating on luxury kidswear labels. Parents who once preferred International locations when shopping for their children’s clothes are pleased with the opening of these luxury stores in India. As a result, even Indian fashion designers are cashing in on this wave. Most of these designers currently sell through the MBO channel in luxury malls, with the price-point being above Rs 2,500.
The kidswear space has also witnessed the expansion of retail formats, with online retail becoming another format registering multifold growth. Also, children’s apparel is usually purchased as per age or weight. This makes online shopping simple for parents, as there is no confusion regarding fit.
Furthermore, the branded segments, especially the premium ones, are expanding into new product and fabric opportunities in the kidswear space. Organic cotton is still a niche fabric, but more mothers prefer to purchase it for their children, especially infants, due to its exclusive anti-fungal, anti-allergic and anti-odour characteristics, compared to regular cotton and other conventional fabrics. Thus, many brands and retailers are working on sourcing organic cotton and building a strong brand image of being sensitive towards children’s requirements.
Brands are also collaborating with fashion designers and labels, and exploring various other niche segments like organic fabrics.
Trends
Similar to the trends in menswear and womenswear, the children’s fashion segment has also registered the growth of fashion accessories. Mothers like to dress up their children Presented by and complete the look by adding accessories, especially in case of girls, for whom there is a wide range of accessories to choose from – shoes, handbags, fashion jewellery, headbands, et cetera. For boys, school bags and shoes are the major attractions; various sports goods brands are consequently expanding their range of school bags.
Character licensing is another growing trend in the kidswear space. Due to the phenomenal media exposure, children today associate with various cartoon characters and want to be linked with them in as many ways as possible. Brands thus offer a range of T-shirts and accessories with cartoon characters printed on them. Such characters as Ben 10, Doraemon, Pucca, Power Rangers, Chhota Bheem, and Barbie are most preferred. MBOs operating across India, which have been targeting the age group of 4–14 years, have launched private labels of character-related clothing and accessories.
Conclusion
Thus, brands and retailers are realising the potential of the children’s fashion business. Moreover, the increase in household incomes, International travel and exposure, and peer pressure is only further contributing to the growth of this segment. In order to tap this opportunity, brands must present an exhaustive product portfolio and be innovative in terms of choosing retail formats. They can no longer simply make lowcost products; instead, they must be fashion-attuned in terms of their products, merchandising, and marketing approach.
As children’s garments are sold according to age group, the number of SKUs needs to be high. Brands need to focus on the type of styles and the number of pieces across age groups. This in turn adds to their operating costs and efforts. Also, while parents are willing to increase the average spend on their children’s apparel, they do not comprehend whether the pricing of children’s garments is equivalent to adults’ garments. Thus, the supply chain and sourcing strategies should be continuously monitored in order to offer the right product at the right price. Various domestic kidswear brands have incurred losses as a result of such challenges. Brands and retailers must be cautious of the opportunities, as well as the prevalent challenges, before developing their strategies.
