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Baby care products: Formula for growth

New players in the Ayurveda segment of the baby care market are building up an omnichannel presence

Although customers are aware of the benefits of organic and Ayurveda-based products, market expansion will not be a cakewalk.
Although customers are aware of the benefits of organic and Ayurveda-based products, market expansion will not be a cakewalk.

The booming Ayurveda baby care industry has piqued the interest of major conglomerates. ITC has recently bought a 16% stake in Mother Sparsh; meanwhile, Wipro Consumer Care, together with other investors, has invested `23 crore in The Ayurveda Company—a brand that only recently forayed into the baby care segment.

Get the drift? Consider the potential: According to the recent report by Research and Markets, the Indian baby care products market is expected to grow at a CAGR of 15% in the forecast period of FY22-26 to attain '25,373 crore, of which, analysts say the Ayurveda segment would command over7,500 crore.

Many of the D2C (direct-to-consumer) startups in the industry including both The Ayurveda Company and Mother Sparsh are investing in building their omnichannel presence, while established players such as Dabur are vying to expand the offline retail base.

Simultaneously, these brands are also looking at price points that would appeal to a larger chunk of buyers, as well as expanding into tier-II and III cities. The gameplan is to take multinational players in the baby care industry—such as Johnson & Johnson, Procter & Gamble, and Kimberly-Clark —head on. Ankur Bisen, senior partner and head (consumer, food, and retail), Technopak Advisors, says to garner mass appeal, brands in the segment need to have a multi-channel approach and target the right price points.

Boosting revenue

The Ayurveda Company is expecting the newly-added segment to contribute at least 25-27% of the revenue, this fiscal. For Mother Sparsh, the baby care segment contributes over 80% to the total revenue.

Category expansion is the first challenge. “The target is to make baby care a ‘1,000 crore segment, in the next five years,” adds Param Bhargava, founder, The Ayurveda Company. Focussing on tier-II and III markets, the price range for its products is 99 to `499.

Dabur’s baby care range, launched in 2020, saw double-digit growth last year, contributing considerably to its overall revenue of `10,899 crore.

Omnichannel presence

Ajay Parihar, marketing head, healthcare, OTC, Dabur, says while the baby care range is largely present on e-commerce platforms, it plans to expand further into general and modern trade, by end of 2022. Meanwhile, The Ayurveda Company is set to open its first offline retail kiosk and plans to open 50 exclusive outlets pan-India by end-2022.

For Mother Sparsh, positioned as a premium baby care brand, metro cities have always been the major focus. It aims to increase its offline sales contribution to up to 20% by end-FY 23 from 10% currently by focussing on baby trade stores and markets. “As 40% of the sales come from our own website, we are focussing on acquiring more users through that channel,” says Himanshu Gandhi, co-founder and CEO, Mother Sparsh Baby Care.

Although customers are aware of the benefits of organic and Ayurveda-based products, market expansion will not be a cakewalk. Harminder Sahni, founder and MD of Wazir Advisors, says when it comes to baby care, consumers are hesitant to test new products/ brands and gravitate towards well-known brands (mainly non-Ayurveda).

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