Babies and Kidswear Market Sees Growth Curve

Babies are no more confined with mothers at home and so the presentability becomes important. Approximately it is in the last 20 years only that the baby’s garment market has developed as a niche category in retail in competition with the ladies’ and gents. The global baby apparel market size was valued at USD 135.5 billion in 2018.

Revenue in the Baby Clothes segment amounts to US$47,479m in 2019. The market is expected to grow annually by 5.4% (CAGR 2019-2023). In global comparison, most revenue by kidswear is generated in United States being US$8,405m in 2019. In addition, the global baby apparel market size is expected to reach USD 198.8 billion by 2025, according to a new report by Grand View Research, Inc., expanding at a CAGR of 5.6% over the forecast period.

The kids wear market is segmented on the basis of product type, end users, distribution channel, and geography. By product type, it is bifurcated into apparel and footwear. By end users, it is categorized into boys and girls. By distribution channel, it is classified into online stores, specialty stores, supermarkets & hypermarkets, and brand outlets. Based on geography, the market is analysed across North America (U.S., Canada, and Mexico), Europe (UK, France, Germany, Italy, and rest of Europe), Asia-Pacific (China, Japan and rest of Asia-Pacific), and LAMEA (Latin America, Middle East, and Africa).

The key players in the kids wear market : Benetton Group S.r.l. (Italy), Marks and Spencer plc (UK), The Walt Disney Company (U.S.), The Gap, Inc. (U.S.), Children’s Place Inc. (U.S.), American Apparel Inc. (U.S.), Diesel S.p.A. (Italy), Dolce & Gabbana (Italy), DKNY (U.S.), and Levi Strauss & Co. (U.S.).

The rising awareness regarding safety and comfort of the baby is projected to be a key factor for the market growth over the past few years. In kids wear the comfort of the baby is considered to be the ultimate criteria of the production and as a result it is an understandable reason that the Kids and babywear is a well-established market for organic fibers. Companies say that customers are attracted to its pesticide-free status. Mini Rodini, one of Scandinavia’s fastest growing children wear brands, is an example of success in this category, selling Organic Fair-Trade products in department stores and independent shops all around the world, including Harvey Nichols in Kuwait, Selfridges in London, and Barneys in New York.

In addition, parents are focusing not only on easy and convenient baby dressing but also on style in accordance with the latest fashion trends. With the growing population accessing the internet, parents are getting more updated in terms of the latest fashion from the social media websites such as Facebook, Instagram, Pinterest, and other media platforms. In addition, promotions and attractive discounts offered by the e-commerce websites like Amazon, and Alibaba are increasing the adoption of online shopping among the parents across the globe.

These consumer trends are anticipated to play a key role in expanding the market scope of various baby apparel variants over the next few years. Additionally, parents as well as baby sitters are more concerned over convenient baby dressing care. They are choosing clothes that do not have any adornments such as buttons or fancy laces that could rip off and lead to any choking hazard, tripping, or any strangling hazard.

Safety in Kidswear Production

Although most of the apparel products made from synthetic materials contain harmful chemical dyes the kidswear category is an exception as the unwanted chemicals can lead to cause skin irritation in infants. Government of various countries are regulating the textile industry and framing new policies in order to make baby’s wearing apparel safer.

The baby clothes should meet the flame-resistant requirements as prescribed by the government for their safety. For instance, according to the United States Consumer Product Safety Commission, the regulation is established in three different classes of flammability based on the time of flame spread.

Class 1 textiles have a flame spread time of more than 7 seconds, which makes them acceptable for use in apparel. Class 2 textiles have a flame spread time from 4 to 7 seconds and it is used to make gloves, footwear, and hats, where flame resistant factor is not required to meet this standard. Class 3 textiles have a flame spread time of less than 3.5 seconds, which makes them unfit for manufacturing baby apparel.

Insights of Baby Wear Categories

Outerwear baby apparel was the largest product segment, accounting for a share of more than 65.0% in 2018. Moreover, kids fashion shows are increasing across the globe as parents today are getting more aware through internet in order to update the latest fashion for the kids. Various exhibitions are held across the globe in order to promote the kids fashion and launch new fashion especially for kids.

For instance, ‘World of Childhood 2020’, a specialized exhibition to launch new products for infants, toddlers, and kids, is going to be held in June 2020 at Yerevan, Armenia.

Underwear baby apparel is expected to expand at the fastest CAGR of 5.8% from 2019 to 2025. Over the past few years, the parents are concerned over the adverse effects on the baby’s health due to presence of harmful chemicals present in the clothes.

Sometimes, these clothes lead to skin irritation and many types of health and hygienic problems including rashes. As a result, the parents are expected to increase the spending on those underwear variants, which would provide the protection against bacteria and virus.

The Distribution Channel

The offline distribution channel dominated the global baby apparel market in 2018, accounting for more than 75.0% share of the global revenue. “Major retailers including Carter’s, Inc.; Cotton On Group; Hennes & Mauritz AB; Gerber Childrenswear LLC; and Naartjie are increasing the penetration of retail stores in order to cater to increasing demand for baby apparel. For instance, as of 2018, Carter’s, Inc., one of the largest designers and marketers of kids apparel, had more than 1,000 official stores in North America and more than 17,000 wholesalers in U.S.”

The online channel is expected to expand at the fastest CAGR of 6.1% from 2019 to 2025. With the growing population accessing the internet, the parents are getting more updates of the latest fashion from the social media websites such as Facebook, Instagram, Pinterest, and other media platforms.

In addition, continuous promotions of the e-commerce websites such as Flipkart, Amazon, and Alibaba, coupled with great discounts offered by them, are increasing the adoption of online shopping among the parents across the globe. Moreover, this distribution channel provides a platform for the new entrants to the industry to promote and sell their products across the globe irrespective of their geographic boundaries.

Global Market

“North America dominated the global with exceeding 40.0% share of the global revenue in 2018. The region is expected to maintain its lead over the next few years as a result of increased awareness among the U.S.-based working class parents regarding providing safety and hygiene to their babies.“

Asia Pacific is expected to expand at the fastest CAGR of 6.7% from 2019 to 2025. Countries such as India and China accounted for the major share as the birth rates in these countries are high as compared to the rest of the world as a result of improved childcare facility in rural and urban areas. This trend is expected to play a crucial role in expanding the scope for baby apparel products.

“Middle East and Africa is expected to witness significant growth in the coming years. Urbanization and improvement in economic indicators in terms of rising disposable income and increase in birth rate in African countries including Nigeria, Ethiopia, and Kenya are expected to open new avenues for baby apparel over the next few years.“

With the continuous development of the economy in South Africa, the growth rate in recent years has declined to some extent, but the baby clothing market is relatively stable, it is expected in the next few years will continue this state. Although the baby clothing market in South Africa is very large, but in its domestic baby clothing business there is still much room for development.

Baby Boomers in the US Fuel Growth In Segment

While millennials have dominated headlines in recent years, baby boomers (those born between 1946 and 1964) have continued to dominate consumer spending in the U.S. In fact, consumers over 50 now account for more than half of all U.S. spending. They are also responsible for more spending growth over the past decade than any other generation, including the coveted millennials. 

As a group, this over-50 crowd should continue to be a major force in U.S. consumer spending, especially as those over 60 years old drive growth over the next five to 10 years, according to Visa Business and Economic Insights.  This is happening for two reasons: demographics—there are simply more consumers over 60 than there were 10 years ago—and behavior. Baby boomers, compared to generations that preceded them, are retiring later, holding on to more debt and maintaining budgets for travel and other discretionary treats.

By 2020, there will be about 11 million1 more consumers over age 60. While the share of spending among younger consumers is expected to decline over the next 10 years, older boomers should gradually spend more with those aged 60+ reaching a 33 percent share of aggregate spending by 2025. Industry forecasts show that Gen X and millennials will continue to be important consumer targets—as much for their current spending as for their longer-term loyalty but the strongest future growth potential in spending lies firmly with baby boomers.

As boomers stay in the workplace longer, their spending habits also appear to be changing. For one, they’re making more purchases online via computers, smartphones and other devices, suggesting they are visiting traditional stores and using a physical card less frequently. These card-not-present (CNP) transactions now represent 40 percent of credit spending on Visa for consumers aged 60 to 69, which is only slightly lower than the overall average CNP of 40.3 percent.

Global babies apparel market share.

China still holds the maximum share in babies wear market with exports worth USD604.305 mn as compared to USD 657.398 mn in September 18. However, it still enjoys maximum share in babies wear with 40.63% share in the period under review.

Cambodia is fast emerging as a major player in babies wear market in the US taking up second position in US market with 11.48% share and exported garments worth USD 941.356 mn as compared to USD937.407 mn. Vietnam secured third position in US market with 11.05% and exports worth USD 255.988MN as compared to 249.688 mn followed by India with 10.34% share and exports worth USD239.638mn.

Bangladesh has 8.87% share in US market as far as babies wear category is concerned. The country exported babies garments worth USD205.423 mn as compared to USD203.149mn.

Indian babies wear market

The Indian kids’ apparel market grew at a CAGR of around 11% during 2013-2018. India is one of the largest contributors in the apparel-retail sector globally and it is becoming a hub for kids’ apparel and fashion retailers as well. The kids apparel market caters to children between 0 to 14 years of age and has been segmented into boys-wear and girls-wear.

The Indian boys-wear segment currently accounts for the majority of the market share. The girls-wear segment, however, is also exhibiting strong growth characterized by a gradual shift in preferences due to the changing trends. Traditionally, the girls-wear segment was inclined towards ethnic and cultural clothing, but it is also shifting towards more contemporary and comfortable garments.

A key factor driving the Indian kids’ apparel market is the country’s huge population. Currently around 375 million individuals are below the age of 15 years in the country. This represents a huge consumer base for the kids’ apparel market.  Moreover, catalysed by the strong economic growth in recent years, disposable incomes in India have been witnessing a continuous growth.

This has resulted in an increasing spending on kids-wear by parents. Urban India majorly constitutes nuclear families with working parents willing to spend more for their child’s comfort and convenience. Moreover, Indian kids in both urban and semi-urban regions are increasingly being exposed to media and are therefore more aware about brands which cater to them. This has resulted in children’s active participation in their apparel purchase decisions as much as their parents.

Additionally, organised retailers and foreign investors are establishing brands which target the requirements of both parents and their children. They have attracted consumers through better visual merchandising, right product assortment, promotional strategies and focused advertising. Moreover, both Indian and foreign brands that previously catered to adults, have now stretched their product lines to include children clothing as well.

Comments:

There has been a slowdown and every aspect of the garment industry is suffering from it. In August I was in a garment show in Las Vegas that had all garment categories but there also buyers were not coming. Basically the online business has caused a lot of trouble. Retailers, suppliers and  exporters all are suffering due to growing online platforms as you see it is way more convenient for the end customers. The economy is bad.  Everyday some shops are shutting down.

Having said that it is also to remember that challenges come in business and it is all about competition so we just have to keep up the fight and come up with new strategies. In International market, India has always been in the back street as the infrastructure of Indian manufacturing units are not up to the mark even as compared to the less developed countries such as Bangladesh. Prices are also a huge issue in India. Bangladesh is doing very well.  Even many Indian manufacturers and fabric sourcing agents are going to Bangladesh and establishing themselves there.

Basically in India as per my experience there has never been a niche of volume business. Big retailers such as KMart, Walmart, Costco are also going to Bangladesh and not coming India to source due to the lack of infrastructure here. China has been the biggest player and now other countries such as Vietnam, Cambodia are also coming up.

Speaking from my experience as I do business mostly with the US and Canada, the sweaters and long coats have good demand and ethnic embroideries also add more values to it. Mothers today are buying similar designs for themselves and babies as it is a trend to dress up the babies the same way.  India is lacking in delivery, quality and there is no end to it.

Mukta Malhotra, Saar India, Delhi.

Usually we do light colours only like off-white and for the infants we do onesies and rompers. We prefer 100% organic cotton and also do in BCI cotton. The organic cotton demand is growing as everybody is concerned about sustainability. The organic cotton though may cost more in some cases, there is the BCI cottons for lower range garments.

The global slowdown has not hit the kidswear much as the market has a stable demand. Yes, the quantities have dropped but the categories, styles are the same. It neither has florished nor has decreased over the past couple of years. We have our European standards that has to be followed and all the buying countries have their own parameters as well. The market is constant. India, I would say have a 30-40% share in global kidswear market.

Europe offers the most market for the kidswear. China is leading in case of manufacturing in terms of premium products, Bangladesh on the other hand is for volumes and only for the value-added products the buyers are coming to India. Morocco and Turkey are coming in limelight and are growing really well.

The girl’s garments fetch the most market share. I would say the French group of companies are doing well for kidswear. In the coming years the kidswear segment can flourish if the government support improves towards the exporters. Online market is there but for the kidswear I still see the parents are more interested in physically experience the products before buying.

Sonia Muttreja Sharma, El Corte Igles, Gurgaon.

Kidswear is facing the global slowdown just like other categories. The market has not picked up yet. We are hoping for the market to open by the end of this November. For the kidswear segment the fabric matters the most and the testing parameters that the international market follows. South America and Brazil are emerging as lucrative market at present. In India the exporters hardly have any orders, the market is not looking good. Among the segments, the girl’s segment is the best market. Companies of the European countries are doing well.

Manjaiah, I.I.I.E. PVT. LTD., Delhi

“I think the market is good and growing as we can see it is growing by 10-15% every year. Even though there is a global slowdown, the kids’wear market is not affected much. American companies are giving good orders followed by Middle East countries like Saudi Arabia, UAE.

The basic products earlier used to be sourced from China and Bangladesh, but now the scenario is changing and many buyers are coming to India for buying basic products also because India can provide better quality in cotton and hosiery products. Kids’ wear is growing due to the fact that the parents are more concerned about what their kids wear and as they are more educated and emotionally inclined to kids’ needs. 

This opens up the market and the chances to grow are quite good. We are growing every year by around 15-20% and if the market is supportive, we are expecting to grow around 25% in FY 2019-20. Like other segments fashion is fast even in kids wear segment”

Alok More, Denimatic India Pvt ltd, Kolkata