Chicco reveals the science behind the art of delighting 'little' customers

Founded in 1946 by Sir Pietro Catelli in Italy, Artsana was once a small family concern which has now become a multinational group operating all around the world in over 115 different countries. Artsana Group operates into two main business areas: Baby Care and Health Care. Chicco, the flagship brand of Artsana is a cross category master brand on the world baby care market, leader for baby products in the 0 to 36-month range. In an extensive interaction with IMAGES Retail, CEO, Chicco India, Rajesh Vohra talks about the business proposition and future prospects of the brand in the country.
The total turnover of the company and growth rate over the past few years:
The consolidated global turnover of Artsana Group was €1.42 million in 2015 and has been only growing over the years. The group’s India operations started in 2010. Over the past 6 years, Chicco has been able to make its mark in the Indian baby care market significantly and has been growing at a CAGR of above 35 per cent since then.
Market Share: 
Chicco offers a wide and distinctive range of baby care products related to nursing, cosmetics, toys, travel (strollers, highchairs, car safety seats) and infant fashion. The entire product range adheres to the highest international standards of quality and safety. We operate in multiple categories and our share varies as per the category. Unfortunately, for most of these categories, organised industry data is not available.
At an overall level, now we are a strong reference brand in the country, growing faster than the category and gaining market share across board. We aim to be the leading brand across categories in the next five years.
The Footprint:
Chicco has an Omnichannel presence in India. India is a very fragmented market, hence to cater to our consumer effectively, we operate through multichannel distribution including Chicco exclusive brand stores, specialty baby shops, online partners and distribution centres.
We have 12 Chicco exclusive brand stores and hospital corners spread across major metros including Delhi-NCR, Mumbai, Bangalore, Kolkata and a few others. We are present in over 100 cities through our distribution network. All our stores are franchisee stores.
Choosing a Franchisee:
We want to work with like-minded partners who are willing to build relationship for long periods of time.
Footfalls:
Since we are a specialised baby store, our footfall varies as per the location of the store.
For example, in the mall, our footfall is around 1,500 – 3,000 and in high streets, it is around 750 -1,500 a month.
Size of the market for the products of the company in India and the growth rate:
As per our internal estimates, the organised market for cosmetics is around Rs 1,400 – 1,600 crore and growing at a CAGR of approximately 15 per cent. Toys is approximately Rs 3,000 – 3,500 crore and growing at around 12 per cent CAGR. Nursing and juvenile are smaller at this stage estimated to be around Rs 500 crore and Rs 250 crore industries respectively.
Factors Propelling the Industry’s Growth:
Demographically, India is home to over 110 million babies contributing around 11 per cent of the world population with a high birth rate of 19.3 births per 1000 in a year.
The country is potentially a big market for the baby care industry. Growing category awareness and increasing disposable income of new-age parents are helping this industry to grow further.
Trends:
Parents always want to give the best to their babies, without compromising on the quality and safety aspects of the product. Some important trends that we are witnessing today are:
Increased Category Awareness: The growing Internet penetration and well-travel new-age parents are helping in increasing category awareness significantly. By searching online as well as when they travel abroad, they are aware of all types of products that are available – so they have ample knowledge before they purchase anything.
Increased Disposable Income: Families are spending more and more on their baby’s well-being.
Increasing Number of Nuclear Families & Working Mothers: In the absence of a support system from the extended family, parents today need more tools and enablers in terms of baby products for their upbringing.
Market Positioning & Customer Profile:
Chicco is a contemporary brand, always by the side of today’s mums, dads and children. It is a brand that spends 36 months living near them and with them at all times, and hence quality and safety are the two most important pillars of all our offerings.
Product Range:
Fashion: Designed in Italy, Chicco fashion is one of the most distinguished lines in the 0 -4 year age group. In addition to fashion, it also has a wide range of daily requirements like baby romper and suit. All baby apparels are designed for intuitive playfulness and comfort of the baby. The materials used to produce our products are tested according to stringent quality standards.
Chicco shoes are light weight and flexible. They come with a physiological insole that accentuates natural movement.
Nursing: Chicco offers a wide range of nursing products related to breastfeeding. The Boppy nursing pillow, Sterilisation tools, Soothers, Weaning aids, Protection (from insects and the sun), and Accessories. All these products are BPA free.
Baby Cosmetics: The Baby Moments range of baby cosmetics are parabens free, hypoallergenic and clinically tested. They are free from alcohol, SLS and SLES.
Recently, we have launched another innovative range of cosmetics by the name Natural Sensation which is inspired by the composition of ‘vernix caseosa’ (a layer that protects baby’s skin in the last trimester inside mother’s womb). The range is free from phenoxyethanol, mineral oils and colouring agents.
Juvenile: We are one of the leading and preferred brands in this category. Chicco offers a wide range of first strollers, second strollers and duo systems (a combination of stroller and car safety seat).
In addition to strollers, we offer the widest range of baby carriers, highchairs, bouncers and car safety seats. All our products of juvenile range are homologated to international standard of quality and safety.
Toys: Chicco range of toys includes infant and pre-school toys. All our products are designed and developed to give the right stimuli for development of sensory, motor, and cognitive skills. It offers innovative products like First Dreams (musical projection toys), Rattles that are paint free, Sit N Ride, Trikes, radio control vehicles and licensing toys of Disney, Ducati as well as Fiat.
Sales Split Between Different Brands:
Fashion and travel are the leading categories in our exclusive stores and shop-in-shops, whereas nursing and cosmetics are the main selling categories in distribution channel. Fashion and baby travel are big categories in Chicco stores followed by Nursing and Cosmetics.
Imported or Made in India:
As a company, we believe in offering the same global product experience to all our consumers across the world. Therefore, we import most of our products from our own manufacturing facilities in Italy. We also import from Hong Kong as well as make in India. Approximately 30 per cent of the products sold in India are manufactured locally.
The Categories:
Chicco’s vast experience in the infant world has now been consolidated by an Observatory:
Facility – Chicco Osservatorio (Baby Research Centre), dedicated to increasing our knowledge of children of from 0 to 3 years of age and their psycho-physical, emotional and social needs.
Osservatorio observes these aspects very closely, collaborates with experts in the medical-scientific world, communicates with the education facilities and constantly gathers suggestions from mothers and fathers to gain as much knowledge as possible on the world of children, and use it to devise and develop specific products for each growth phase.
In line with our global innovations, we regularly keep on introducing new products in India to address new and developing consumer needs as well as maintaining freshness in the product portfolio.
The Price:
Price range varies with the category.
Fashion: from Rs 499 to Rs 5,000;
Nursing: from Rs 129 to Rs 15,000;
Cosmetics: from Rs 65 to Rs 899;
Juvenile: from Rs 2,490 to Rs 30,000
Toys: from Rs 199 to Rs 7,000
Nursing and cosmetics are the main selling categories in our distribution channel.
The Location:
We need a location which is in a high traffic area with a relevant consumer profile and that is why malls suit us just fine. We already have many shop-in-shops functional and running successfully. We are open to more shop-in-shop opportunities. We feel this can add lot of value to both, brand and the partner.
The Stores:
Globally, we have large format stores. However, in India, considering the high rental cost, we have an average store size of 1,000 sq. ft.
We have two store formats – Chicco exclusive brand stores (between 1,000-2,000 sq. ft.), and Hospital corners
Chicco exclusive stores offer all our five range of baby products. In hospital corners, the emphasis is more on the nursing and cosmetics range as they are the immediate need products.
Customer Loyalty:
Our loyalty program Chicco Club is exclusive to our Chicco stores. We see lot of value addition coming from this program. Approximately 30-50 per cent of our consumers are loyal in different locations.
Marketing Strategy:
We have a well-rounded marketing strategy with a mix of ATL and BTL activities. Considering our target audience is new-parents of 0-3 years of babies, our emphasis is more on targeted activities to reach out to this specific audience through digital, direct marketing and other consumer activations.
For Chicco stores, our emphasis is on lead generation activities through direct marketing, digital and most importantly mall activation. In addition, we do multiple activations with our existing consumer base to generate repeat purchase and cross category purchase.
Expansion Strategy:
We are very selective to open new store however given good store location and commercials, we are open to exploring as well. We are already present in all the four regions, though there is untapped opportunity in many top cities which can be explored.
Innovations:
We are one of the most progressive and evolved baby care brands in the world. We keep on bringing new and innovative concepts every year in all product categories. For example, we have recently launched second stroller OhLala which is sturdy yet light; just 3.8 kg which can be lifted with only one finger. This is very important innovation because a stroller should be light for mothers to handle. We have first stroller Cortina CX to be used from 0m+, the best seller stroller meeting all the requirements of new age parents.
Our Boppy nursing and feeding pillow is one of the most distinguished products and 14 times award winning product.
The Future:
As a 100 per cent subsidiary, we are in India with long term plans. We do not have any specific time-bound target to open new stores. We evaluate each opportunity individually and plan accordingly. We are willing to work with investors who have long term perspectives.
Online and E-commerce:
We are present on all the important baby e-commerce channels. E-commerce is an important channel for us. It’s the first touchpoint for the consumers when they start searching for baby products and the convenience of the medium is very well established now. Since we are a niche brand, we do not encourage discounting. Our current mix is around 12-15 per cent and we would like to maintain it at that level.
Social Media:
Online, especially social media is a very important medium for us for creating brand awareness and preference. We are fairly active on Facebook and Instagram as these provide opportunity for communication as well as conversation.
In line with our brand positioning, our approach is to provide more and more useful content to new-age mothers so that brand can be of help in their journey of motherhood.
We do not have our own e-commerce channel at this stage, therefore we do not link it directly with revenues. Our intent on online and social media is to generate brand awareness and educate more and more consumers about Chicco. In turn, we get significant surge in search, traffic on our website and ultimately traffic in our shops and online channels.