2012

MINOR PROJECT The growing Indian Kids wear Market

Rituparna Neog, NIFT, MFM,NEW DELHI 3/8/2012

TABLE OF CONTENTS Sl.no. Particulars Page Numbers

INTRODUCTION: The top ten childrens wear markets are growing at around 6-7%each year and are expected to generate retail sales of US$131.5bn. By 2012.The childrens wear market is highly fragmented on a global scale. According to the Global market review of childrens wear forecasts 2012,the top ten global markets ,the US,UK,France,Germany,Spain,Italy,China,India,Russia and Japan account for a n estimated US$92.6bn in childrens apparel retail sales. In India, the market for kids wear is witnessing rapid sales growth thereby surpassing the mens and womens wear segments and subsequently bringing about growth in the overall retail sector. According to KSA Technopak, a consultancy firm, branded as well as small retail players in the country are gradually realizing the potential of the kids wear market and are looking to make investments in this segment. "The kids segment is the most promising in apparel retail in India. Big brands are only now realizing its true potential," says Arvind Singhal, chairman of consultancy firm KSA Technopak A pile of top brands including Allen Solly, Arrow, Reebok, Puma, Woodland and Marks & Spencer has entered the Rs 3,500-crore branded kids apparel market. Brands such as Benetton, Pantaloon and Reebok have roped in popular characters like Pucca, Ben10 and Power Rangers to lure their 4-14 age-group customers. Trends in the Indian market are fast changing and the kids apparel market is growing rapidly. One of the important changes is the increasing preference for branded apparel. Kids focus on dressing styles and are aware of what suits them most. Influenced by mass media and peer pressure, todays kids are more informed and self-conscious, Rocky S, who participated at the Indian Kids Fashion week, held in Mumbai. At the fashion week, Indian and international designers explored the untouched territory of the kids line by displaying apparel, toys, accessories and a lot more. Some of the big names who participated in the three-day event are Narendra Kumar, Nishka Lulla and Malini Ramani. International brands like Barbie, Kidology, Little Kangaroos, Just for Kids, Mineral and Coochie Coo also presented their collection on the ramp.

Characteristics of Kids wear market: Infants(0-6months) Toddlers(7months -2years) Kids(3-8years)

 Pre teens(9-12 years) Teens(12-16years) My research would delve into the opportunities and potential of this emerging market segment owing to reasons such as: Large young population in the country Higher disposable income in the family, increasing spending per children Kids are independent and highly fashion conscious. They are influenced by peer pressures They can be very demanding(want variation)

MAJOR PLAYERS The major players in this segment are: Benetton kids Gini and Jony Ltd. Cat Moss Lilliput kids wear Ltd. OBJECTIVES: Through the conduct of my research of Kids wear market ,I would try to achieve the fulfillment of these objectives: To analyze the growth of the kids wear market segment in India To identify its challenges and opportunities. To study the consumer buying behavior towards this segment.

It would surely help the retail companies plan out strategies in this sector and on an individual level it would help me gain an insight into this emerging market segment. RESEARCH METHODOLOGY: Research methodology is a way to systematically do the research. It may be understood as a science of studying how research is done scientifically. The most desirable approach with regards to the selection of the research methodology depends on the nature of particular work, time and resources available along with the desire level of accuracy.

APPROACH TO THE RESEARCH: This project works on quantitative approach, which is reliable and beneficial in this type of project. In quantitative data collection or research we seek to quantify the data and typically apply some form of statistical research or analysis using various statistical tools. 1. Define the problem & research objectives In the first stage, in this project I tried to define the problem in broader way i.e. Problem: Why the demand for kids wear increasing in the Indian market? Objective: To analyze the growth of the kids wear market segment in India To identify its challenges and opportunities. To study the consumer buying behavior towards this segment. Study of the secondary source of information:The quickest and the most economical way to find possible hypothesis was to take the advantage of the work done previously on the similar grounds. For this I accessed the internet and collect some data regarding the kids wear market in India

From this search I came to know about the growing kids wear market and its scope for success in India. 2. Develop the research plan In the second stage of research, developing the most efficient plan for gathering the information needed to achieve the objective of the project successfully. There are number of steps involved in this Data sources Secondary data: Secondary data have been collected from various websites, such as http://articles.economictimes.indiatimes.com/2009-1030/news/27655503_1_kids-segment-kids-wear-kids-apparel www.researchandmarkets.com www.fibre tofashion.com Books: Conceptual Issues in Consumer Behavior-the Indian Context by Kumar ramesh Apart from that I also took the help of the text books like Research Methodology- by C.R.Kothari and Marketing Research by G.C.Beri. I also went through several articles published in Brand equity/ The Strategies etc. Primary Sources of Information: I would make use of questionnaires to gather primary information on the third objective of my research i.e., To identify the consumer buying behavior towards the kids wear segment

Secondary Data collected : INDUSTRY OVERVIEW Market for kids apparel is the fastest growing industry in India. Manufacturers are coming up with fancy materials targeting kids who are more interested in the upcoming fashion trends. Childrens garments are available in various forms and designs. Kids apparel market is more unorganized than any other segment of apparels. The market is a proposition of the good, bad and the ugly. A huge volume of kids apparel in India is being dominated by local and unorganized players. This gives an excellent opportunity for the organized players to lay strong foundation in this segment. Indian market is now moving towards an international look in terms of childrens apparel. Cotton plays a major role in the clothing of children.Approximately, 86% of the kids wear are of cotton. Branded kids apparel market is in its nascent stage in India with a handful of national and international brands. Industry analyst estimate that market size of branded kids wear in India including brands like Ruff Kids, Ruff Baby, Planet kids,Gini and Jony,Zapp,Lil Tomatoes and Weekender Kids is estimated to be around Rs.1000 crore.They positively assert that branded market for kids is growing at 15% per annum.International brands including Barbie, Mother Care, Benetton Kids ,Pepe,Lee Kids, Tommy Hilfiger and Adams Kids have also entered the Indian Market. Market Size and Growth: According to the India Apparel Report 2008,(Images Year Book,Vol IV),the size of the kids wear market is estimated to be at Rs.30,150 crore.Industry experts predict that the market will further grow to reach Rs.45000 crore by 2013,with branded apparel contributing to a major share. The volume of market share of kids apparels in the total Apparel market is at 24.9% as against a 15% share in 2005.Urban kids apparel market comprises about 60% of the total kids wear market. A research states that more than 30% of the countrys population is below 15years of age. The density of population makes it one of the fastest growing segments in the Indian Market Scenario.

Branded kids wear are well established in the tier I cities and are now experiencing a good growth in tier II and Tier III cities as well. Wanting the best outfit for their children, parents are seeking a variety of garments offered by new brands, and are shopping in exclusive outlets dedicated for childrens apparel. Industry players further predict that the market is set to grow by 12% annually and reach its peak by 2010. GROWTH DRIVERS:

Kids wear is not a small business anymore. Driven by huge demand from brand conscious children, the Indian kids wear retail market is expected to touch Rs 58,000 crore by 2014, according to retail consultancy firm Technopak Advisors. At present, the size of kids wear market in India is estimated at about Rs.38000 Crore - accounting for 25 per cent of the total Indian apparel category. "This segment, which is split into kids wear and school uniforms, is expected to reach Rs 58,000 crore by 2014," Technopak's recent report 'Trends in India's Domestic Fashion Market' says. Growing at the rate of 17 per cent, this is one of the most attractive categories, according to the report. The report tracks children in the age group of three to 13 years.Technopak highlights increased media exposure, double-income parents and peer pressure as the reasons for children becoming more fashion and brand conscious. Brands are also realizing the potential of this market and are increasing their presence in this segment, it adds. In April 2009, the Mahindra Group launched Mom & Me stores to tap into this segment. Exclusive children's brands, such as Gini & Jony, Lilliput and Catmoss, have also expanded their presence exponentially in the last two to three years. These brands are developing categories such as infant wear, kids' formal wear, kids' ethnic wear, swim wear and casual wear, along with a wide range of other merchandise for children. Even a brand like Reebok, which focused on adults till now, launched the 'Reebok Juniors' concept store last year to tap into this segment. It has started offering apparel, footwear, accessories and sports equipment for children in the age group of four to 14 years. Gini & Jony started their Freedom Fashions stores, which offer licensed products from brands like Reebok and Levi's, along with their own products. Even premium brands, such as Tommy Hilfiger, Allen Solly and Puma, are not far behind and are now including more kids' product and accessories. Childrens' fashion shows, organised by these brands, is not a new concept. Lilliput

started this trend and Catmoss roped in Darsheel Safary, of Taare Zameen Par-fame, to walk the ramp for its collection. Courtesy: Mail Today Children always keep growing, so the possibility of this market being strong even in the tough times is evident as there is always a demand for kids apparel. DEMOGRAPHY: A survey states that ,the maximum sales in childrens wear market comes from smaller towns.Patiala,Bhatinda,Coimbatore,Phagwara, and Sonepat are a few to name.Branded wears are well established in tier I cities and are now emerging in to the tier II and tier III cities as well.In tier I cities boutiques are emerging to be a popular trend .Consumers expect these retailers to have a cutting -edge of garments and exclusive collection of clothes. Generally stores that offer wide range of selection at discounts and low prices attract more traffic. As kids grow quickly and are less attentive in keeping their clothes safe, parents consider kids apparel as functional and disposable as well. In case of infants, toddler wears ,general merchandise and supermarkets dominate the sales. Few retailers dominate the kids wear apparel market in any one particular area. UNTAPPED MARKET POTENTIAL: Global brands like Mother Care, Monalisa, Benetton, Espirit, Bossini and Kanes have entered the Indian kids apparel market. While international brands eye Indian kids wear market, domestic brands like Lilliput , Lil Tomatoes and Cat Moss are gearing up to have a share in the global market. Representing Indian brands abroad, higher profit margins, succulent opportunities are assumed to be the reasons behind their foreign march. India has a vast potential for export of kids wear apparel to foreign markets like US and EU.Brands like Lilliput and Koutons are exploring opportunities for joint ventures options to tap the childrens apparel market in China, Indian players spot lucrative manufacturing capabilities in China, supported by strong purchasing power.Hence, Indian business units are planning to acquire manufacturing units in China to gain production scales for its operation in the dragon nation.

MEDIA PROLIFERATION: A brand positioning itself in the market depends on the level of differentiation it is able to establish. The manufacturer must also ascertain a sizeable amount of promotional budget to gain eyeballs .There are no boundaries for the scope of merchandising activities for kids wear. With the effective publicity mediums like TV channels, video games ,blockbuster of superheroes, and peer influence children are aware of the latest fashion in apparels and other accessories. Generally parents like to dress their childrens like themselves.They further seek to buy brands they are already aware of ,and have confidence in.Popular brands like Gap,Diesel,and many others plan to extend into this segment. With the emergence of many TV channels, promotional strategies of companies have become more intense. Innovative promotions which encourage the kids involvement, finds more acceptance. SUCCESS FACTORS Craving for a niche ,new entrants as well as the existing players follow distinct strategies to market their brand. Marketing task lies in capturing the imagination of the children with fashionable patterns, and of the parents with quality apparels supplemented with reasonable prices. All these determine the success of the manufacturer in this segment. FASHION INNOVATIONS The practice of dressing girls with a frock and boys with shorts are way beyond. New pattern of garments in par with the latest fad is being sought by parents. Fashion industry is boosting up the well dressed child trend with their new collections on the runways frequently. (An article from Apparel online) Industry Live : Hot Wire Rocky S to style up kids Renowned fashion designer Rocky S has launched his first kids wear collection, the collection presented at the Indias kids fashion week comprised of sheers, silks, velvet trim, rich brocades and Chantilly laces with elaborate textures, bows and vintage broaches. The attempt by IKFW aims to tap into the unexplored kids wear market estimated to become

worth more than Rs. 85,000 crores by 2014. Kids apparel manufacturers make optimum utilization of latest trends in the fashion world to entice the kids and increase their sales. With wishes and demands getting added in the list of kids, manufacturers and retailers are making the most of it. Factions of domestic and international players are seen in the arena, with each of them wanting a slice in the pie. USE OF CARTOON CHARACTERS IN THE KIDS GARMENTS: Apparel manufacturers are cashing on the popularity of cartoon characters. Character inspired merchandising is emerging as one of te hottest market trends. Mickey mouse, Power Puff girls ,Spiderman, Superman etc. have all found their way into the kids wear market .The type of cartoon character used in the apparel depends mainly on the popularity of the toon,their age group and sex of the children. COORDINATED ACESSORIES: This seasons style statement includes dressing up with accessories, where everything from bags, dress ,and hair clip is color and design coordinated. In the current trend, leather bags,caps,key chains and hair bands are considered as required with an ensemble. Especially in case of branded apparels, garments coordinated with proper accessories sell well in the market ,than individual apparels. The price ranges for such apparels are extravagant. BRAND BUILDING As apparel markets are growing in size rapidly ,kids of today have a vast range of options to choose from.So, it becomes necessary for the manufacturers and retailers to woo the offsprings and convince them to make the buying decision. Brands approach kids to market their product focusing on unique colors, silhouettes and prints just as for adults. Specialty shops are now an emerging trend for kidswear.Every brand tries to create a discrete brand identity through its merchandise and in store arrangements. Raymonds brand Zapp has an exclusive kids loyalty programme.Reebok has a Made to Play campaign.They have specific sports wears like Cricket, Football and Basket ball collections. This is done keeping in mind that kids are more attracted towards playing.Peter England has set up a customized space for kids.

VISUAL MERCHANDISING Trends have changed, and it is quite visible. Children, who were taken to parks and zoos before, are now coming along with their parents for buying their own clothes.So; the retailers who want to take a pie of the cherry should focus on attracting the attention of children along with their parents. They can thereby capture the childs mind and the parents wallet Kids exhibit considerable pester power while shopping for their clothes. Good store presentation and product merchandising is like a good book that has an attractive cover, and an interesting first chapter that would lure the viewer. Big departmental stores have segregated their apparel categories like infant wear, ethnic wear, casual wear and preteen wear etc.They store a wide assortment of apparels and distinguish them with each other. Some retailers and departmental stores have taken the lead in creating an in store arrangement with play areas, and kids oriented promotions within the store.Example:Back to School promotion by Lifestyle.

PRICING Kids apparel market is a price sensitive segment. Higher input costs add to the prices of the apparels .with the increase in the purchasing power of parents, it is expected that they will sustain the business in the long run. As kids have the tendency to grow up very quickly, new offerings are required. This raises two concerns one of range, and the second of pricing. An effective combination of both determines the future of the brand.Deciding the price of the apparel mainly depends on defining the target group and identifying the buyer behavior.the price of garments in I tier cities ,and exclusive outlets will have a

vast difference than that of the clothes sold in normal retail outlets and II & III tier cities. MAJOR KIDSWEAR BRANDS: Indian kids apparel brands are creating a niche by themselves by changing the face of Indian kids wear in India. These brands dominate the kids wear market in India and have earned consumer confidence trust and loyalty towards the brand, thus earning laurels from its consumers. LILLIPUT: Lilliput started in the year 1990 with the objective of manufacturing world class kids wear. Today it has a growing presence in both domestic and international market. Today the brand Lilliput enjoys an enviable reputation in the Kids wear market of India. Lilliput as for today with its Seven State Of The-Art Manufacturing facilities produces around 3,50,000 Garments per Month with an Annual Turnover of US$ 40 Million. Lilliput Stores are evenly spread across 18 States, 35 Cities and 115 Stores & is still growing. By September 2007, we will open 50 more stores all across India and more stores are coming up in China, the Middle East and Africa.

Gini & Jony is an Indian kid's fashion brand, promoted by the Lakhani brothers, since 1980. The brand sells apparel through a mix of companyowned and franchised outlets, and is currently present in 79 cities with 277 exclusive brand outlets and other large format multi-brand stores, like Stop, Lifestyle, Pantaloons etc.Gini and Jony has a range of brands

like GJ Jeans,Palm Tree ,Levis Sykes Junior,Red River,UCB,Rocky S, and GJ Knowledgewear for kids.They offer a wide variety of apparels for children including T-shirts,shirts,jackets,cargos,jeans and trousers for boys , and capris,dungarees,skirts,Jamaicans and coordinate tops for

girls. ALLEN SOLLY: Wanting a bigger slice in the market share ,Allen Solly has announced the launch of kids wear, a funky ,cool ,fun and stylish collection.Mr.R.Satyajit,COO,Allen Solly says, The organized kids wear market ,excluding school uniforms, is estimated at around 2000 crores,growing at 30% every year. The kids wear market is among the fastest growing segments in the apparel industry and Allen solly aims at playing a key role in the branded Kids wear segment.

Allen Solly has launched in four collections namely: Colour My World ,Urban Holiday,Sports Academy and Enchanted being built around the numerous occasions in a childs life.The quality of the apparels is such that 90% of the merchandise is made up of 100% cotton fabric,which is most comfortable for children.Strict quality parameters have been followed while designing these clothes including testing saliva and perspiration color fastness.an attempt has been made at making the merchandise child safe,for example,care has been taken to not provide any drawstring around the neck and wherever it is included, confirms to specified length. ZAPP: While international players are entering in to the Indian market,and many others are waiting at their wings;seeking entry ,domestic apparel barnds are extending products for kids.Raymonds,which offer exclusive menswear,launched its kidswear collection in the name Zapp.It is an integral section bringing fashion to kidswear .Their target customers are kids in the age group of 4-12 years.Zapp also has a tie up with Warner Brothers to treat the kids with Superman Apparels.