KIDS APPAREL MARKET IN INDIA

INTRODUCTION Just around the corner in every human being mind - is a lovely dress, a wonderful suit, or entire costume which will make an enchanting new creature of his/her. The same is now applying on kids as well. Whether he is an eight year old boy or a sixth standard girl, they are very conscious about their look, their costumes e.t.c. A dress makes no sense unless it inspires men to want to take it off you. Kids love to dress up in cool and trendy outfits. They demand to doll up like the actors and actresses. Fashionable dresses for kids have witnessed a steady growth in the Indian market. With the flurry of international kids wear brands coming to India, the category currently seems to be on an upswing. Even a couple of years ago, theres hardly any kids wear brand to consider. Largely unorganized, this kids wear market is now the target for many brands since the space gives ample of opportunity to experiment with international styling. The unorganized players have always dominated the market. Cheap manufacturing, high volumes and offering myriad of styles, these players have had an upper hand in the industry. However, now days the scenario is little bit changed, today bigger companies have started venturing into this market. The scenario is changing and consumer awareness towards branded kids wear has definitely grown- thanks to the world being a global village. Kids along with the parents are becoming extremely brand and quality conscious paving the way for the industry to become more organized. The growth in organized retail coupled with fashion consciousness among kids and rise in discretionary income is expected to increase the demand for branded kids wear. The kids wear sector in India is witnessing the entry of international players and increasing number of adult apparel players are launching apparels for kids to capitalize on the rising growth opportunities in the market. Children's apparel includes clothing for kids between 1 and 14 years of age. There is also a specialised market space for infants wear retail market segment that includes sales of garments for children between the ages of 0-2 years. Leading the kids' retail revolution is the apparel business, which accounts for almost 80 percent of revenue, with kids clothing in India following international trends. Certain brands like Weekender have made an agreement with Walt Disney and Warner Bros., whereby they can make use of some of their famous cartoon characters in their apparel. The brand is planning to make use of characters like Mickey and Minnie Mouse as well as Tom and Jerry in the new line of children's clothing that they are planning to launch. This collection is to be named 'Toon World'. Pantaloon and Gini and Jony have entered into a joint venture to set up a chain of retail stores for children's apparel. Raymond has also launched its store for kids' apparel 'Zapp! DS Corporation, which owns the Ruff Kids brand of kids' garments, is planning to expand. The recent entrant is PB Retail Ltd., a company in infant retail promoted by Pawan Agarwal. The company has opened their store in the brand name My Mart, the first store of the company in the country which has an area size of 2000 sq.ft.

OPPORTUNITY The need for premium kidswear may start off with parents wanting to make sure their kids are as stylish as they would like to represent themselves to be; very soon kids themselves realize what's trendy and what's not. All of this translates into great opportunity for apparel retailers. Add to this the fact that wardrobe changes are necessitated by not only the need to be trendy, but also physical growth of the children and we have a vigorous repeat market. Traditionally dominated by mom and pop stores, brands are discovering this fast growing market where yuppie parents will spare no expense to ensure their kid gets the best. Driven by huge demand from brand conscious children, the Indian kidswear retail market is expected to touch Rs 58,000 crore by 2014, according to retail consultancy firm Technopak Advisors. At present, the size of kidswear market in India is estimated at about Rs 38,000 crore - accounting for 25 per cent of the total Indian apparel category. The industry is growing at more than 17% of rate. The children's wear market is highly fragmented on a global scale, but its growth is being fuelled by two key trends: Retail development in emerging countries and Increasing luxury sales in already-developed markets. In emerging countries, not only do parents have more money to spend, but they also inherently want to spend money on their children. This gives retailers at all levels, from discount to luxury, the opportunity to expand into new geographical regions. In developed markets, the luxury trend is also on the rise. According to the 'Global market review of children's wear - forecasts to 2012', the top ten global markets - the US, the UK, France, Germany, Spain, Italy, China, India, Russia and Japan accounted for an estimated US$92.6bn in children's apparel retail sales. By 2012, the same top ten markets are expected to account for an estimated US$131.5bn in children's apparel retail sales. The common trend that is upswing this industry is that in the younger age categories of children's wear - the infant/toddler and preschool categories, in particular - general merchandise and supermarket chains dominating sales in nearly all markets. Children grow quickly and are generally rough on clothing, so parents tend to look at apparel as being both disposable and functional, so stores offering a wide selection of fashionable offerings at low prices increasingly generate traffic. And although style is important from the parents' perspective, higher-cost brands are generally reserved for special occasions. Childrens' fashion shows, organized by these brands, are also an inspiring concept. Lilliput started this trend and Catmoss roped in Darsheel Safary, of Taare Zameen Par-fame, to walk the ramp for its collection. Also, the current market trends as entry of international players into the market, players tying up with the entertainment fraternity, private equity investments and fashion designers focusing on kids wear. Private equity major SAIF Partners has invested Rs 100 crore in kidswear retail chain Catmoss Retail Pvt Ltd for a significant minority stake. New Delhibased Catmoss, which caters to the 0-14 years segment, used these funds to expand its retail network and in setting up of a new production unit in Noida. The kidswear segment has also caught attention of other global PE majors. TPG Growth and Bain Capital invested

$86-million capital in Lilliput Kidswear earlier this year in a deal that also involved exit of early investor Everstone Capital. Gini & Jony, another major player in kidswear space, has been backed by Anil Ambani's Reliance Capital and also has an ad-for-equity deal with Times Private Treaties. Use of cartoon characters in kids garments like Character inspired merchandising is emerging as one of the hottest market trends. Mickey Mouse, Power puff girls, Spiderman, Superman etc. have all found their way into the kids wear market and are currently selling like hot cakes in the market. Coordinated Accessories such as styles statement includes dressing up with accessories, where everything from dress, bag, and hair clip is color, and design coordinated. Some retailers and department stores have taken the lead in creating an in-store arrangement with play areas, and kids oriented promotions within the store. Ex: Back to School promotion by Lifestyle.

FRANCHISE PERSPECTIVE IN KIDS WEAR MARKET IN INDIA Some years ago, the kids wear market in India was disorganized with local retailers serving the masses in back-alleys. After the entry of foreign players, family-owned stores, denim makers and casual apparel makers diversified into the kids wear to capture the market's share. In India, kids wear is largely retailed through multi-brand stores. The demand is increasing and so does the presence of global kid's wear brands in India. Even premium brands such as Tommy Hilfiger, Allen Solly, Puma and Nike, are now including more kids' product and accessories. Though growing but a large segment of the kids wear market is still untapped, which means brighter prospects for many new players to infiltrate into the industry. Franchising is playing a pivotal role in the kids wear segment. After brands like Catmoss, Mom & Me, Lilliput, Toonz Kids, Giny & Jony, Li'l Tomatoes and Ruff kids, other big brands also picked up franchising to rope in designated customer footfalls in their stores. Franchise as well as company owned outlets are the current model via which these brands are expanding such as Toonz Kids follows a COFO (company-owned, franchise operated) model with guaranteed annual returns. For this, it forges a three-year lock-in with its franchisees. Whereas, Tommy Hilfiger plans to open 100 shops in the childrens wear segment, which would be a mix of exclusive brand outlets and shop-in-shop across the top 24 cities in the next two years. The business strategy of Mom & Me is highly customercentric, from target identification to merchandising development to customer service in store to provision of allied services. Lilliput Kidswear Franchise, which has 225 exclusive brand outlets in India, is also present overseas across 30 stores in West Asia, Gulf, Egypt and China. The company is now eyeing the markets of Vietnam, Tunisia and Greece, and is already in talks to set up exclusive stores in the next six-seven months in these countries through the franchise route, the report added. The Lilliput Franchise will expand globally, one of them few brands embarking on a global expansion. TOONZ Retail India Private Ltd is a joint initiative of eminent professionals in the retail field and Crystal Phosphates Ltd, the agro giant having 30 years of rich experience in the Indian market. The company was started in the year 2009 and the initial stores were opened on COCO formats. The company deals in infant wear, baby basics, feeding accessories, bed & bath, infant furniture, apparel, sleep wear, winter wear, rain wear, inner wear, gifts & novelties, publishing, stationery, puzzles and games, activity kits, toys, footwear and many more. The merchandise at ToonZ stores will promote characters from many licensors. Toonz retail operates via two formats: kiosk format called Toonz Xpress with an investment of six lakh, and mid-sized format (1500-2500 sq. ft) with an investment of Rs 25 to 30 lakh. Catmoss Retail Ltd is also interested in investing Rs 400 crore in the next five years to open 500 stores in India. Also, Zudaas France is planning to open 200 more exclusive brand outlets in India by 2011-2012.

To begin your journey in the kids wear industry, the entrepreneur needs to look for a brand that is planning to expand through the franchise route. Franchise provides a platform to start a secure business. The kids wear industry is full of opportunities and has a dynamic future ahead. Like, Toon Kidz offers great franchise opportunities to its franchisees by offering minimum guarantee of 18 per cent on the set up investments along with monthly expenses. But location is the key factor that a franchisor must identify while offering franchise to an investor. Kids wear is a flourishing market with a great scope. Moreover, nothing can be more fulfilling than having a kids wear outlet. If this is the kind of business you always wanted to be in, then it is the right time for an entrepreneur to move a step forward and start looking for a franchisor, as this sector provides safe and secure business ground .

CHALLENGES Although, favorable demographics, growth in organized retail, rise in discretionary income, emergence of kids as an independent consumers and changing fashion trends is driving growth in kids apparel market in India, but like other sectors, there are few challenges which can pull back this market. Until the mid-1990s, department stores were the main competitors of children's and infants' wear specialty retailers. As this industry moved into the mid-2000s, however, the growing popularity of off-price and discount retailers presented new challenges. These low price retailers expected to expand by outselling both specialty children's wear stores and department stores. Changing demographics made the children's and infants' wear industry attractive to new entrants and, therefore, extremely competitive. Large retail chains began to penetrate the market. Marketing task lies in capturing the imagination of the children with fashionable patterns, and of the parents with quality apparels supplemented by reasonable prices which determine the success of the manufacturer in this segment. Few of the threats facing by this market are as follows:

1. One of the major challenge faced by kids wear brands is the proliferation of licensed
apparel, given as hot in the arm by the growing popularity of characters on kids television channels.

2. Also, for children wear, cotton is the most preferred material due to its non-allergic,
comfortable, and easy caring virtues. But it faces competition with other synthetic ones, which are preferred for its wash ability, and non-creasing abilities. 3. Generally stores that offer a wide range of selectionat discounts and low prices attract more traffic.

4. Although, franchise concept is a very emerging perspective but the major challenge
faced by the franchisee is in updating the knowledge with respect to the merchandise, inventory control and knowledge of sales pattern. 5. While the industry can count on the countrys burgeoning double-income households and increased purchasing power, to fuel its growth, businesses will however do well to allure the market with a prudent mix of product quality, value and sensible pricing. A lesson to be learnt is from international brands such as Zapp! that had tied up with apparel leader Raymond to market high-end kids apparel in the country. The high pricing of the brand, proved to be a considerable deterrent for the indulgent yet price-sensitive Indian parent who did not see any value in shelling out an average of Rs.2000 for a kids garment.