Apetulant toddler stomps his foot before issuing an ultimatum: ?I?ll not have milk; I?ll not go to school; I?ll not play. First I want my Lilliput dress!? The tag line goes, ?Wear it; Love it!?
Talk of pester power. Marketers say it works. Ask any mother. She?s bound to nod her head in agreement. Take it that children in the age bracket of 0-12 years would change their outfits at least three times a day. They would also outgrow clothes faster than any other age segment. Clothes would also be the most gifted item. Last but not the least, with growing exposure to all sorts of media channels, children are also more fashion conscious than their moms or dads?reasons enough for Rs 3,000 crore domestic branded market to grow at a healthy 20% (2006-07) despite stiff competition posed by the unorganised market, which is estimated at Rs 14,000 crore.
And if you have failed to notice, even the brand display at kid?s section is different from that for the adults?. There is high ascent on colour, mood and playfulness even in a value format like Brand Factory. Indeed, the kids? section in any big store has undergone a massive transformation?from a small corner of the outlet to a huge area, often covering an entire floor when possible.
?We see parents willing to splurge Rs 800-900 on a little fella?s first pair of denims,? vouches Rajesh Seth, vice-president, marketing, Future Group?s value format Brand Factory that showcases a slew of kid?s brands.
Not that there are many. Just a handful at the moment?Lilliput, Li?l Tomatoes, Catmoss, Kids? Studio, Little Kangaroo and Mother?s Touch to name a few?contributing close to 22% to the total children?s apparel market. (Please note the accent on the brands? Western names; it?s mainly to drive home the fashion attribute.) Experts, however, contend it?s poised for a annual growth of 30-35%.
Good news is that one of the country?s largest textile brand, Raymond too has jumped into the fray with ZAPP!, a brand targeted at four to 14 year olds that?s currently distributed through its 12 flagship stores. There are also a slew of international brands like Tommy Hilfiger, Freelook Junior, Lee Kids, Adams kids, Benetton and Pepe that have tied up with various Indian companies. Top among these are Lee Kids, launched in 1995 in association with Arvind Fashions, and Tommy Hilfiger, a super-premium brand partnering with the Murjani Group that?s been present in the country since 2004. It currently runs 200 licensed outlets across India.
The newest kid on the block is Walt Disney Company (India). It tied up with Indus Clothing in November 2006 for the distribution of Disney jeans, its non-character based fashion brand. ?The Indian market is driven oth by character and non-character merchandise, but the latter still commands 85% share,? Roshini Bakshi, director, Disney Consumer Products (DCP) in India. ?Compared to the West, we have a long way to go,? she adds.
The reasons for the steady growth of this market are not difficult to guess. When Sonia Narang (28) sets out to clear her four-year old?s wardrobe every few months, she has to discard not one or two but probably the entire range of jeans, shirts and several pairs of shoes in one go. Don?t they grow up fast!
That?s not to say kids themselves are not conscious about brands. Sanjeev Narula of the Rs 182-crore Lilliput Kidswear remarks, ?Indian kids are brand aware. Till the age of two, it?s the mom who chooses; but after that the child is the mom and the mom the child.? And to spoil the child further, there are also matching accessories?footwear, belts, eyewear, innerwear, swimwear, ethnic wear, and of course, partywear, where the price starts at Rs 3,000 or more.
Incidentally, this predicament that mothers of kids between 0-12 years face everywhere around the world is what makes this a volume-driven market. Add to it the new fashion consciousness in today?s tweens and you will also find value, inspiring several erstwhile exporters to now play close attention to the domestic market.
?The biggest challenge we face,? says Narula, ?is maintaining huge inventories in every size, style and colour. The stock stays on the shelf for barely a month, before 70% of it is sold (normally). The rest is liquidated through sales or discount formats. This year, we are launching 2,000 colours and patterns, so at any given point of time we would be putting out 4,500 styles on the racks. That is, 600 pieces per style in all sizes,? declares Narula.
Lilliput, founded by Narula in 1991, clocked Rs 71 crore in domestic sales besides Rs 111 crore in exports last year it. The brand has been posting a year-on-year growth of 80%-plus. Narula is quick to point out that the domestic market component is growing at double the pace of the export market. ?In 1991, we had 30 machines, today we have 3,500 in eight factories with the capacity of producing 6 lakh units every month,? he adds. As an exporter turned manufacturer, Narula has come to identify a few key trends in the kids? market?almost 90% of kid?s clothing is made in cotton, and given that 30% of the country?s population is below 15 years of age, the existing market leaves much to be desired.
Lilliput?s exclusive brand outlets now count 107. The brand also has presence in 150 multi brand stores and 450 other points of sale in 65 cities, including tier two and three cities. The maximum sales in the kidswear market, according to Narula, is coming from smaller towns?Patiala, Bhatinda, Phagwara, Coimbatore, Sonepat, to name a few. The brand won the Images Fashion Brand of the Year award for the kid?s category in 2007.
Earlier, for the past six years consecutively, another 25-year-old wonder, Mumbai-based apparels brand Giny & Jony (sales: Rs 110 crore in 2006-2007) was the winner in this category. Promoted by Lakhani brothers, this brand built itself from scratch after experimenting with the first shop in shop at Shoppers? Stop in 1994. The first brand outlet was floated in 1995 in Hyderabad and today, nearly 14 years later, Giny & Jony has 19 franchisees, 40 shop-in-shops, 11 factory outlets and is present in 180 multi-brand outlets (MBO), such as Shoppers? Stop, Piramyd, Lifestyle, Ebony, Pantaloons, etc.
Lately, the company has even begun promotional campaigns such as Giny & Jony Children?s Film Festival and plans to come out with an IPO to raise capital to increase its footprint. Last year, Giny & Jony also entered the lucrative school uniform (know-ledge wear) segment, estimated at Rs 10,000 crore.
The growth in value in the total kid?s segment is high in almost all ranges?over 37% in the super premium category, 35% in premium, 22% in the mid-price segment and over 13% in economy. ?Spending on kids? apparel is definitely going up,? says Seth of Brand Factory. Since there is a lot of aspiration-fashion attached to this segment, these brands have to bring value to the table.?
No doubt maintaining adequate inventory for every size is the most taxing aspect of this business. If in adults, there are four to five standard sizes, in kidswear these brands have to maintain a minimum range for every age group, implying bigger display areas. Complicating or rather colouring the picture further are all kind of embellishments that children or their parents demand.
?It?s easier designing a trouser for an adult than for a toddler, which must necessarily have six display pockets, embroidery, a cartoon character embossed on one of the shirt pockets and, above all, be comfortable to wear so the child doesn?t throw a tantrum,? explains Narula, whose company has licence for Power Puff, Bob the Builder, Thomas the Tank from Cartoon Network, besides Iron Man, Hulk and Spiderman from Marvel Publications. The licensing fee is usually 5% of the sales and is renewed every two to three years.
?There is so much value-add in this category that after doing all that we can price our trousers at Rs 300- 400 a pair.? With a media budget of Rs 7 crore, Lilliput is planning an in-film branding exercise in Amitabh Bachchan-starrer Bhootnath this year.
At present, high rentals prevent most kid?s brands to launch their own stores; so they work mostly on the franchisee model. Bangalore-based Weekender (manufactured by Personality Ltd, a division of Gokaldas Images) and DS Corporation-owned Ruff Kids fall in this class, and they, like Lilliput and Giny & Jony export to the US, the UK, West Asia and some other Asia-Pacific markets.
The biggest threat to the branded segment, however, is posed by the overwhelmingly supply of non-branded clothing?one reason why the volume and value shares of kidswear segment remain a small part of the total branded apparel market in India.