The Indian apparel retail industry is considered one of the most promising industries and a major contributor to India’s GDP. A rising population of urban middle class with increasing purchasing power is aiding the growth of apparel consumption. One of the segments that is experiencing high growth is apparel for kids and infants. India’s kids and baby apparel market is estimated to be Rs. 1,27,000 Crore in 2018.
Figure 1. Kids Apparel Market (Rs. Crores)
With a population of ~375 million, kids represent nearly 27% of the total population. This population gives rise to a huge market which will further grow with increasing population. The kids wear apparel market has grown at 9% CAGR in the past five years and is expected to grow at a faster rate of 14% in the next five years.
Gender Based SegmentationFigure 2: Gender Based Segmentation
Kids wear market is almost equally distributed towards boys wear and girls wear. Boys wear market stood at Rs. 64,700 crores in FY 2018 while girls wear market stood at Rs. 62,200 crores, representing 49% of the kids wear market. Along with the increase in spending on girl child and changing preference towards contemporary apparel, the share of girl’s wear is expected to exceed that of boy’s wear market.
Product Based SegmentationFigure 3: Product Based Segmentation
Uniforms form the largest segment for kids apparel market with a share of more than 30% and will continue to hold maximum share in the overall kid’s category in the next few years as well. With rising number of schools, India’s increasing literacy rate and government efforts that every child should go to school will remain the major contributor for uniforms to be the biggest segment.
While uniform holds a significant market share, the fastest growing category is ethnic wear. This is an effect of the increasing influence of social media, which has led to parents dressing up their kids according to various festivals and events. Domestic player Biba, a renowned ethnic player, launched its kids collection and currently has 5 standalone stores dedicated to kids collection. FabIndia also launched its kids collection for girls, boys and infants. These factors indicate that garment manufacturing for kids wear holds a potential for robust growth in the coming years.
Key BrandsWith the growth of kids wear apparel in India, many international and domestic brands are expanding their presence in the segment. Most of the international brands are present in the luxury, super premium and premium category while there are few domestic brands such as Biba offering its product in premium category. Average lifespan of kids apparel is less as compared to adults, due to changing height of children, which is why many brand are present in mid and economy segment for price conscious parents.
Figure 3. Key Brands in Kids Wear Market
Trends in Kids Wear Apparel Market
1. Adults fashion brands are coming into kids wearBrands who used to only cater to the menswear and womenswear are now entering the kids wear segment. One of the reasons for this growth is that millennial moms see their kids as extension of themselves and wish to dress their kids the same way as they do and therefore they tend to buy from brands that offer products for both adults and kids. It also makes it convenient for parents to purchase their own apparel along with that of their kids under a single roof.
With growth in retail of kids wear apparel, garment manufacturing is also getting a boost with emergence of some kid wear centric garment manufacturing clusters such as Indore, Solapur, etc. Also, a lot of Indian garment manufacturers have established their own garment manufacturing set-ups along with own small retail brands to cater to the domestic market.
2. Preference for branded readymade garmentsAs parents’ wardrobes are becoming more branded, they are switching to branded clothing for their kids too. Earlier, people used to home stitch apparel for toddlers, however, with increasing purchasing power and a variety of options available in the market, people prefer buying branded readymade apparel.
Indian manufacturers who had been focusing solely on the export market have also started retail to meet the growing demand of this segment. Also, increasing influence of western culture has swayed kids in India leading to demand for branded and designer apparel. In fact, leading fashion designers are also focusing on this segment. For instance, Masaba Gupta, launched a Kids collection in 2016.
3. Emergence of speciality playersLooking at the promising kids apparel market of India, many new branded players that have their key focus on kids have joined the market.
Table 1: Key speciality players
In 2018, Flipkart launched its private label brands, Miss & Chief with intention to cater to children between 2-10 years offering variety of apparel to meet the varying demands of kids. Hopscotch and Firstcry are two leading players in India. According to media reports, Hopscotch is planning to launch 500 new styles daily and has become of the fastest growing online kids fashion player. The brand is present in 1,300 cities across India. First cry, which has grown out of e-commerce based model to a retail store model and now has more than 340 stores across India, registered a growth of 47% from FY 2017 to FY 2018.
4. Emergence of kids as decision makersInfluenced by mass media and peer pressure, today kids are more informed and self-conscious about what they wear and how they are dressed. Parents are not the sole decision-makers anymore and kids are taking part actively in the shopping process but are increasing the frequency of purchases as well.
As per Wazir’s analysis, kids do play an important role in apparel buying. While most of the kids have limited role at the moment, with increasing socializing and exposure of kids, the kids becoming decision makers in purchase is expected to increase.
Key challenges faced by the Kids Wear Garment Manufacturers
Though the retail market for the segment is increasing in double digits, garment manufacturing is not increasing at the same rate. Some of the challenges faced by garment manufacturers in the segment include:
1. Lack of focus on R&D
2. Lack of safety norms being followed and implemented
3. Unavailability of quality inputs within the country
Focusing on product development and customer satisfaction is the key to sustain in this market. Joint ventures should also be explored by manufacturers to bring international expertise to India. Such collaborations will help manufacturers upgrade both in terms of product development and operational efficiency as they get an access to the partner company’s valuable resources. Focus should also be given to better product designs and increased functionalities to make domestic products have an edge over the imported products.
India has been a garment manufacturing hub of kids wear for decades. However, as is the case in other garments, our products in the segment are cotton-focused. Given that our competence lies in sewing capabilities and skill set of the operators on industrial sewing machines, existing garment manufacturing companies or new players can plan to establish clothing factory dedicated to manufacture kids wear. However, the right kind of analysis for product segments within kids wear is one of the key components that any garment manufacturer needs to look into. Here is where Wastra, Wazir Apparel Start-up and Reengineering Assistance, can help the investors to tap the right opportunity and markets.
Wastra is an initiative by Wazir Advisors to help manufacturers with their manufacturing business ideas in India in garment manufacturing. Our garment industry consultants have in depth knowledge of how to start a garment factory, techno-economic viability assessment of a garment factory setup, preparing garment business plan and assisting in all the steps of garment factory implementation.