The share of kids wear to total apparel market is higher for India as compared to other developed markets like the US and Europe as India has a higher children population ratio. Amit Gugnani, Senior Vice President – Fashion and Kanti Prakash Brahma, Principal Consultant – Fashion, Technopak, studied the critical kids wear category and its finer nuances…
In 2014, the menswear and women’s wear segments contributed 42 per cent and 38 per cent respectively to the total apparel market while the contribution of kids wear segment was 20 per cent. It is expected that by 2024, the contribution of kids wear to total apparel market shall increase to 22 percent owing to higher growth rate of kids wear segment. The share of kids wear to total apparel market is higher for India compared to other developed markets like the US and Europe as India has a higher children population ratio.
Kids wear market expected to grow
Indian kids wear market was estimated to be of Rs 50,120 crore in 2014 and is expected to grow at a compound annual growth rate of 10.7 per cent to reach Rs 1,38,540 crore in 2024. The market is dominated by boy’s wear which contributes 52 per cent to the total kids wear market followed by girl’s wear with a share of 48 per cent. In the next decade, girl’s wear is expected to grow at a CAGR of 11 per cent and boy’s wear at a CAGR of 10.4 per cent.
Growth drivers
Among the BRIC nations India is the only country which had positive growth of children population from the period 2000 to 2015. This coupled with promising growth in per capita income in this period has made Indian kids wear market extremely lucrative for both Indian and International brands and retailers. Though China’s per capita income increased at a faster rate than that of India in this period, children population of China has shrunk due to population control measures followed by it.
Kids wear market still evolving
A few years ago most of the brands and retailers were extremely bullish about the potential of kids wear market. Consequently, a few of them transformed from a kids wear export oriented model to a domestic market focused business model. Some of them banked upon high debt financing to achieve scale and expansion. However, later the business dynamics of the market forced many of them to reassess their business model and re-orient their business strategy with the ground market realities. Some of them right-sized their retailer operation indicating a shift towards to a cautiously optimistic approach. Allegations and counter allegations of financial irregularities with some of the Indian kids wear brands have made investors more cautious about the segment. On a positive note, the rapid pace of various developments in kids wear market has helped the brands to learn quicker by making the learning curve steep.
Characteristics of kids wear market
The kids wear market faces its own set of peculiar characteristics and challenges. Some of the peculiar characteristics of kidswear market include: resilience to economic pressures, concern for safety aspects, high preference for cotton based clothing, high importance of product design and development, need of flexible manufacturing set-up.
Characteristic #1: Kids wear is generally more resilient to economic pressures
In case of economic down turn, parents consider trimming their own discretionary spending before considering any cut down in expenses incurred for kids. In addition to this, kids normally outgrow their clothes quickly making it difficult to delay any
purchase decision. However, kids wear is not entirely resilient to economic down turn; in many cases parents trade down from a higher price segment to a lower price segment in times of financial stress.
Characteristic #2: Consumers have higher safety concerns for kidswear
Parents generally have higher concerns for safety for their kids and products that their kids use. Some of the key mandatory safety requirements for kids wear in developed markets include regulations related to flammability of kid’s sleepwear, use of sharp ages and small parts owing to possible choking hazards, presence of cords and drawstrings in neck area, product labeling, use of chemicals in apparel as well as accessories. Though mandatory regulations and awareness about safety aspects in much lower among Indian consumers, still many parents factor in safety related parameters in their kids wear purchase decision.
Characteristic #3: Higher preference for cotton based clothing
The preference for cotton is much higher for kids wear products across the globe and as well as in India. Cotton is preferred because of its higher moisture absorbency and better comfort characteristics. On the other hand, synthetics and synthetic blends are associated with low comfort properties.
Characteristic #4: High importance of product design and development
Consumers, especially those of premium segment, prefer products with attractive designs and innovative patterns in kids wear. Many prefer garments with embroideries, patchworks and appliques in girls wear. Thus, product design and product development plays an important role in kids wear.
Characteristic #5: Need of flexible manufacturing set-up
A high degree of complexity in manufacturing of kids wear combined with smaller order sizes in the Indian market makes kids wear manufacturing more complex than adult apparel. Hence, ability to manufacturer and deliver quality kids wear of small order sizes is critical in Indian market.
Key trends in kids wear market
In the recent times, the kids wear market has witnessed several trends which have implications for stakeholders across the value chain. Some of these trends are discussed here. The preference for branded apparel has increased in Indian kids wear market. Brand awareness of parents as well as that of kids of higher age brackets has improved owing to entrance of more brands and marketing activities of such brands.Retailers have started introducing kids wear specific private labels to cater to the price conscious consumer groups. Consumers have accepted these private label offering as alternatives to brands. Brands and retailers are no longer restricting themselves to kids western wear
and have started offering kids ethnic wear as well. The trend of occasion-specific clothing has started gaining momentum even among kids.School uniforms, which are also a part of kids wear market has also evolved as a category. Some of the schools mandate different school uniforms depending on specific functions as well specific seasons of the year.
Kids wear segment is expected to remain lucrative in the coming years, but it also requires cautious approach to penetrate deep into the segment. In the mass market price segment, the consumer is still very price sensitive as kids wear have limited life for the users. Managing a diverse product portfolio in kids wear segment also requires a well-structured approach which could adapt itself with the ever changing retail scenario of the country. New entrants in kids wear market have to learn from the mistakes of the earlier players and factor in their key learning into their business strategy.
A market marked by cautious optimism
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