Kids’ retailing in India has seen enormous growth during the last decade. The scope of kids’ retailing is increasing as the industry expands phenomenally. Now it covers the entire gamut of apparel, sportswear, toys, eyewear, watches, stationery, footwear, perfumes and other accessories. However, the kids’ apparel market has been a major revenue generator, accounting for around 80 percent of the total sales in this segment. According to research carried out by KSA Technopak, the branded apparel segment comprises Rs 3,000 crore of the total kids’ apparel market, which is worth around Rs 13,000 crore.

Organised retailing is slowly and steadily making its presence conspicuous in India and increasing its share as opposed to the unorganised retailing. Several companies have been exposed to various platforms, such as departmental stores, hypermarkets, supermarkets, malls, gaming zones, etc, through which they sell kids’ products. This segment is expected to touch an annual growth of around 35 percent. Hence, there is definitely considerable opportunity in this sector. Compared to other retail segments such as luxury goods retailing, which are growing at 25 percent per annum, and Internet retailing, which is growing at around 30 percent per annum, this retail segment is growing at a much faster pace.

A close study of the evolution of the kids’ market shows that retailers dealing in juvenile products have an edge over their competitors, which eventually leads to a sustainable competitive advantage. The Indian retailers in this segment mainly target children up to 12 years of age. While parents are still finding it difficult to understand their child’s preferences, retailers are busy studying children’s psychology and providing a wide range of branded merchandise. This allows them to add a wide range of flexibility to kids’ products in this market. With continuous development in this segment, it is becoming more critical for retailers to understand changing consumer needs and respond faster and with greater efficiency.

Scope of kids’ retailingTechnology has evolved to a large extent in the last decade. Today, kids are involved in many activities during their daily routine. It is often said in jest that nowadays kids are busier than their parents.

They attend classes and tuitions, surf the net, chat on Facebook and other social networking websites, play with toys and computer games, wear trendy clothes, watch TV channels and celebrate birthdays and parties with their friends. From the retailers’ perspective, there is immense opportunity for them to explore this market.

A decade ago, when organised players entered the kids’ wear market in India, the biggest threat they faced was from the unorganised sector, which formed a major part of the kids’ segment. Thus, most retailers tend to operate on a low-cost basis in this market.

In kids’ retailing, like in other similar segments, there is a need for retailers to introduce innovative products. Retailers also need to manage intangible components by making stores a fun place to shop, providing kids with a wide range of choices, setting up a clean and neat ambience in the outlets, offering a liberal exchange policy, etc so that price ceases to be the primary issue for customers. Today, most parents within the age group of 25 to 35 years are working, and are willing to pay any price to keep their children happy.

In this segment, retailers have numerous options that include toys, apparels, sportswear, footwear, stationery, gaming zones, food, accessories (watches, eyewear, perfumes, etc) and, very recently, children’s banking has been added to the list.

Major players in various categoriesToys and gaming zonesThe present size of the toy market is estimated to be around Rs 450 crores. The biggest problem in estimating the size of such industries is the presence of a large number of very small players. Three major players in this segment include Mattel Toys, Funskool and Leo. Toys and games available in India include soft toys, computer games, dolls, electronic games and board games.

In India, there is considerable scope for educational toys and games, and it is so far an untapped territory. Indian children usually demand fun toys and games, while Indian parents usually prefer buying educational toys and games for children. Hence, the introduction of innovative products that can educate as well as entertain the child can lead to significant growth in the toys market. Lately, gaming zones are gaining popularity among Indian kids, and many organised players are entering this segment.

ApparelsUndoubtedly, kids’ wear stores are leading the revolution in kids’ retailing. The kids’ wear market comprises 80 percent of the total kids’ retailing market. Many organised players have entered this segment. A few organised players that are involved in kids’ wear include Gini and Jony, Zapp!, Cinderella, Lilliput Kidswear, Raymond Apparel and Trent. Various product categories in kids’ wear include kids’ readymade garments, apparels, baba suit, fashion wear, designer wear, boys’ wear, girls’ wear, infant trendy wear, infant wear, one piece trendy wear, baby rompers, infants rompers, baby suit set, infant body suit, printed baby clothes, etc.

FoodThis is one of the oldest sectors in this segment. The food products in this segment include baby foods, health drinks such as Junior Horlicks, which was a product launched by Horlicks to target the children’s segment. Other players in this sector include Complan, Boost and Milo.

Almost a decade ago, Nestle started its ad campaign of Maggi and positioned the product as ‘2-minute noodles’ mainly targeting young people. Baby food includes Farex, Cerelac and other such products offerings. Food retail chains such as McDonald’s have special menus especially for kids, and they also give away free toys, which attract a large number of kids.

They carry out promotional events on Children’s Day and provide a separate space for birthday parties. These initiatives attract children and their parents, and ultimately increase business profitability.

TV ChannelsTelevision channels are the recent entry in kids’ retailing. Television channels for kids generate high revenues. A few popular international players are cashing in on the kids’ audience. For instance, major players involved in children’s programming include Astro

Measat, Cartoon Network, POGO and Jetix. Malaysian broadcaster Astro Measatwho bought 26 percent of UTV’s Hungama, a kids channel, for about US$ 7 million. There is a dearth of educational programmes on channels like Discovery, NatGeo, Animal Planet, etc. Retailers have an opportunity to explore this untapped territory.

BankingChildren’s banking is the recent entry into kids’ retailing. With tailor-made banking products, many private and public sector banks have ventured into this untapped sector of kids’ retail banking. A few players who have already marked their presence in this sector are ICICI Bank, HDFC Bank, IndusInd and so on. The products on offer include Child Future Plans, Education Plans, Health Care Plans and Life Insurance.

Footwear and accessoriesFootwear and other accessories such as perfumes, eyewear, watches, etc also contribute to the kids’ retailing sector, and their share in the kids’ market is growing with time. Adidas, Nike and Liberty are some of the major players in this segment. However, there is almost no player who concentrates solely on kids’ footwear.

Driving forces in the industryMobilityKids today are more mobile than before. They may have to attend classes and tuitions, celebrate birthdays and/or indulge in sports activities, art and craft and other creative activities. This provides them with formidable exposure to the outside world, thereby increasing their awareness of the latest trends, fashion, food and other sources of entertainment. These are various areas that a retailer should explore and build strategies in order to become a leader in its area of core competence.

Cosmic generationToday’s generation can be termed as the ‘cosmic generation’, as kids now mature at an early age and gain knowledge quickly within a short span. The rapid development of technology, easy availability of information and ease of travelling are some of the reasons supporting the brisk expansion of today’s cosmic generation. This can be considered to be a major driving force that is continuously boosting the kids’ retail segment.

CelebrationsThe idea of celebrations and parties creates a feeling of happiness, playfulness and the desire to spend time with the family. Today, kids enjoy considerable freedom, and hence they can interact and make friends with other kids in their surrounding environment and through social networking sites.

Kids tend to celebrate the most as they are largely engaged in birthday parties, treats, various occasions and festivals. This helps them gain knowledge about the latest trends from their friends and peers. A retailer can take advantage of this opportunity and promote its products either by sponsoring events or organising such events.

AutonomyToday, most urban kids are brought up in nuclear families. Thus, they have a lot of freedom at an early age. An increasing degree of autonomy prompts them to experiment and explore

Industry Driving Forces

the world to a larger extent. Nowadays, parents act merely as guides, helping children discriminate between what is right and wrong. Whatever a child explores using his/her freedom, if regarded as positive, will be welcomed by the parents. Hence, this is an important driving factor that every retailer should consider, and they should come up with innovative ways to project their products to kids while they are enjoying their leisure time.

Attractive retailingKids are always influenced by colourful, fancy and attractive products. Hence, these are features that every retailer must incorporate in its products. Store ambience, child-friendly staff and attractive visual merchandising are some of the aspects of retailing that could help retailers attract customers. These features should be augmented such that products are made appealing to kids.

Working parentsChanging lifestyles, nuclear families, increase in disposable income and the expanding working population are some of the other aspects that indirectly help in alleviating growth in the kids’ market.

Peer pressureKids are very sensitive and innocent, but they have a competitive mind. Their actions are related to what they see and perceive in the outside world. Hence, every child thrives to be the best, desires to possess the best products and tends to compare his/her belongings with that of his peers. One of the prominent features of the kids’ segment is that parents are the customers who end up paying the price, but children are the deciders. Hence, when a child sees that a friend possesses a PlayStation, he develops a desire for the same regardless of whether he likes it or not and, in turn, pressurises his parents to buy it for him.

The future of kids’ retailingBased on our discussion of the kids’ retailing sector in India in the preceding paragraphs, the future of this sector seems bright. The industry is growing at a rate of 35 percent, which is a fairly good indicator of the promising prospects of this segment.

The industry is in a growth phase and has not yet reached saturation, thereby facilitating new players to enter this market. With a steady market growth and an increase in market share, most companies would strategically see these products as ‘stars’. However, it is necessary to continuously nurture these products in order to sustain the competition in the long run since the existence of more players implies a higher degree of competition. The scope of this segment is widening day-by-day with the driving forces playing a dominant role. Hence, it is necessary for every retailer to understand the changing demands, trends and growing needs of the kids segment and accordingly revise their product strategies regularly.

Organised retail comprises only 5 percent of the total Indian retail industry. This figure is bound to increase with time. Thus, market researchers forecast that kids’ products would find greater shelf space in the coming years. Hence, for companies and children alike, the future is like that of a fairy tale—one that always has a happy ending.