Table of Contents

1.0 2.0 Introduction Indian Kidswear Market: 2.1 Industry Overview 2.2 Market size and Growth 2.3 Characteristics of Kidswear Markets Growth Drivers: 3.1 Demography 3.2 Untapped market potential 3.3 Media Proliferation Success Factors: 4.1 Fashion Innovations 4.2 Brand Building 4.3 Visual Merchandising 4.4 Pricing Major Players: 5.1 Gini & Jony 5.2 Lilliput 5.3 Allen Solly 5.4 ZAPP

3.0

4.0

5.0

6.0 Conclusion

1.0 Introduction: Scanning through the streets of any town or city, one can see a mind boggling array of kids apparels. Spaghetti tops, Crystal studded denims, Italian cuts, Capris, and exclusive party wears. Kids fashion is a diminutive version of adults wear. They have all the clothing as like that of adults, and even much more. Children of today are much more intelligent than their previous generation. They like to have their own choice of clothing. This metamorphosis of children; becoming independent buyers is enhancing the kidswear market. Double income, increase in the amount of disposable income, and one or two kids are the supporting factors to the growth of the kidswear market. Global kidswear market during 2006 was estimated to be around US$ 163.92 billion, which was a small contribution of 3.6% of the total clothing industry. Kidswear segment of the Asia-Pacific region is 35.1% of the global market, and is considered by industry analysts as one of the fastest growing segment, due to increase in child population, supported by many other factors. 2.0 Indian Kidswear Market: Good times for the Indian kids apparel market are in the offing. The evolution in the buying behavior of children, and their influence over their parents results in a big difference in purchase decisions. Media exposures and promotions also cause a significant influence in the market. Evolving dynamics in this market have made it necessary for the manufacturers and retailers to evolve their business strategies’ in order to sustain themselves in the market. Many manufacturers come up with their own brands, while some others enter into business through joint ventures. Today’s kids are more fashion conscious, and are ready to experiment with clothing. Increase in the amount of disposable income, and retail blitz has brought a sea change in the Indian kids apparel market. With kidswear being considered as a part of the lifestyle segment and a strong emphasis is being placed on brands, this segment proves to be a potential business. 2.1 Industry Overview: Market for kids apparel is the fastest growing industry in India. Manufacturers are coming up with fancy materials targeting kids who are more interested in the upcoming fashion trends. Children’s garments are available in various forms and designs. Kids apparel market is more unorganized than any other segment of apparels. The market is a proposition of the good, bad and the ugly. A huge volume of kids apparel in India is being dominated by local and unorganized players. This gives an excellent opportunity for the organized players to lay a strong foundation in this segment. Indian market is now moving towards an international look in terms of children’s apparel. Cotton plays a major role in the clothing of children. Approximately, 86% of the kidswear are of cotton. Branded kids apparel market is in its nascent stage in India with a handful of national and international brands. Industry analyst estimate that market size of branded kidswear in India including brands like Ruff Kids, Ruff Baby, Planet Kids, Gini & Jony, ZAPP, Li’l Tomatoes, and Weekender Kids is estimated to be around Rs 1,000 crore. They positively assert that branded market for kids is growing at 15% per annum. International brands including Barbie, Mothercare, Benetton Kids, Pepe, Lee Kids, Tommy Hilfiger, and Adams Kids have also entered the Indian market.

2.2 Market size and Growth: According to the India Apparel Report, 2008 (Images Year Book, Vol IV), the size of kidswear market is estimated to be at Rs. 30, 510 crore. Industry experts predict that the market will further grow to reach Rs. 45, 000 crore by 2013, with braded apparels contributing to a major share. The volume of market share of kids apparels in the total apparel market is at 24.9%, as against a 15% share in 2005. Urban kids apparel market comprises about 60% of the total kidswear market. A research states that more than 30% of the country’s population is below 15 years of age. The density of population makes kidswear to be one of the fastest growing segments in the Indian market scenario. Market share of the Major Apparel Segments (2007) Total size Rs. 122, 400 crore

Branded kidswear are well established in I tier cities, and are now experiencing a good growth in II & III tier cities as well. Wanting the best outfit for their children, parents are seeking a variety of garments offered by new brands, and are shopping in exclusive outlets dedicated for children’s apparel. Industry players further predict that the market is set to grow by 12% annually and reach its peak by 2010. 2.3 Characteristics of Kidswear Markets: The market for kidswear is classified as follows: Infants (0 - 6 months) Toddlers (7 months - 2 years) Kids (3 - 8 Years) Pre-teens (9 - 12 Years) Children’s wear is mainly on a seasonal basis. Highest sales figures are usually recorded during the months of August – September. The average annual expenditure on kidswear is approximately Rs. 3, 857. Average budget for kids apparel

For children’s wear, cotton is the most preferred material due to its non-allergic, comfortable, and easy caring virtues. But with the advent of more and more fads emerging in the market, this fibre faces competition with other synthetic ones, which are preferred for its washability, and non-creasing abilities. 3.0 Growth Drivers: Children always keep growing. So, the possibility of this market being strong even in tough times is evident, as there is always a demand for kids apparel. 3.1 Demography: A survey states that, the maximum sales in children’s wear market comes from smaller towns. Patiala, Bhatinda, Coimbatore, Phagwara, and Sonepat are a few to name. Branded wears are well established in tier I cities and are now emerging into the II tier and III tier cities as well. In I tier cities, boutiques are emerging to be a popular trend. Consumers expect these retailers to have a cutting-edge of garments, and exclusive collection of clothes. Generally stores that offer a wide range of selection at discounts and low prices attract more traffic. As kids grow quickly, and are less attentive in keeping their clothes safe, parents consider kids apparel as functional and disposable as well. In case of infant, and toddler wears, general merchandise, and supermarkets dominate the sales. Specialty stores are successful in this segment as they are focused on a particular section in the apparel segment. Few retailers dominate the kids apparel market in any one particular area. 3.2 Untapped market potential: With a promising future for kids apparels, the market has attracted international brands into India. Global brands like Mothercare, Mona Lisa, Benetton, Espirit, Bossini, and Kans have entered the Indian kids apparel market. While international brands eye Indian kidswear market, domestic brands like Lilliput, Li’l Tomatoes, and Catmoss are gearing up to have a share in the global market. Representing Indian brands abroad, higher profit margins, and succulent opportunities are assumed to be the reasons behind their foreign march. India has a vast potential for export of kids apparel to foreign markets like US and EU. Brands like Lilliput and Koutons are exploring opportunities for joint venture options to tap the children’s apparel market in China. Indian players spot lucrative manufacturing capabilities in China, supported by strong purchasing power. Hence, Indian business units are planning to acquire manufacturing units in China to gain production scale for its operations in the ‘dragon nation’. 3.3 Media Proliferation: A brand; positioning itself in the market, depends on the level of differentiation it is able to establish. The manufacturer must also ascertain a sizable amount of promotional budget to gain eyeballs. There are no boundaries for the scope of merchandising activities for kidswear. With the effective publicity of mediums like TV channels, video games, blockbuster of superheroes, and peer influence, children are aware of the latest fashion in apparels, and other accessories. Generally parents like to dress their children like themselves. They further seek to buy brands they are already aware of, and have confidence in. Popular brands like Gap, Diesel, and many others plan to extend into this segment. With the emergence of many TV channels, promotional strategies of companies have become more intense. Innovative promotions which encourage the kids involvement, finds more acceptance. 4.0 Success Factors: Craving for a niche, new entrants as well as existing players follow distinct strategies to market their brand. Marketing task lies in capturing the imagination of the children with fashionable patterns, and of the parents with quality apparels supplemented by reasonable prices. All these determine the success of the manufacturer in this segment.

4.1 Fashion Innovations: The practice of dressing girls with a frock and boys with shorts are way beyond. New pattern of garments in par with the latest fad is being sought by parents. Fashion industry is boosting up the ‘well dressed child’ trend with their new collections on the runways frequently. Kids apparel manufacturers make optimum utilization of latest trends in the fashion world to entice the kids and increase their sales. With wishes and demands getting added in the list of kids, manufacturers and retailers are making the most of it. Factions of domestic and international players are seen in the arena, with each of them wanting a slice in the pie. Use of cartoon characters in kid’s garments: Apparel manufacturers are cashing on the popularity of cartoon characters. ‘Character inspired merchandising’ is emerging as one of the hottest market trends. Mickey Mouse, Powerpuff girls, Spiderman, Superman etc. have all found their way into the kidswear market and are currently selling like hot cakes in the market. The type of cartoon character used in the apparel depends mainly on the popularity of the toon, their age group, and sex of the children. Coordinated Accessories: This season’s style statement includes dressing up with accessories, where everything from dress, bag, and hair clip is color, and design coordinated. In the current trend, leather bags, caps, key chains, and hair bands are considered as ‘required’ with an ensemble. Especially in case of branded apparels, garments coordinated with proper accessories sell well in the market, than individual apparels. The price ranges for such apparels are extravagant. 4.2 Brand Building: As apparel markets are growing in size rapidly, kids of today have a vast range of options to choose from. So, it becomes necessary for the manufacturers, and retailers to woo the offspring’s and convince them to make the buying decision. Brands approach kids to market their product focusing on unique colors, silhouettes and prints just as for adults. Specialty shops are now an emerging trend for kidswear. Every brand tries to create a discrete brand identity through its merchandise and in-store arrangements. Raymond’s brand Zapp has an exclusive kids loyalty programme. Reebok has a ‘Made to Play’ campaign. They have specific sports wears like Cricket, Football, and Basketball collections. This is done keeping in mind that kids are more attracted towards playing. Peter England has set up a customized space for kids. 4.3 Visual Merchandising: Trends have changed, and it is quite visible. Children, who were taken to parks and zoos before, are now coming along with their parents for buying their own clothes. So, the retailers who want to take a pie of the cherry should focus on attracting the attention of children along with their parents. They can thereby ‘Capture the child’s mind and the parent’s wallet’. Kids exhibit considerable ‘pester power’ while shopping for their clothes. Good store presentation and product merchandising is like a good book that has an attractive cover, and an interesting first chapter that would lure the viewer. Big departmental stores have segregated their apparel categories like infant wear, ethnic wear, casual wear and preteen wear etc. They store a wide assortment of apparels and distinguish them with each other. 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. 4.4 Pricing: Kids apparel market is a price sensitive segment. Higher input costs add to the prices of the apparels. With the increase in the purchasing power of parents, it is expected that they will sustain the business in the long run. As kids have the tendency to grow up very quickly, new offerings are required. This raises two concerns one of range, and second of pricing. An effective combination of both determines the future of the brand.

Deciding the price of the apparel mainly depends on defining the target group and identifying buyer behavior. The price of garments in I tier cities, and exclusive outlets will have a vast difference than that of the clothes sold in normal retail outlets and II & III tier cities. 5.0 Major Players: Indian kids apparel brands are creating a niche by themselves by changing the face of Indian kids wear in India. Fibre2Fashion had exclusive one on one interview with prominent kidswear brands. These brands dominate the kidwear market in India and have earned consumer confidence trust and loyalty towards the brand, thus earning laurels from its consumers. 5.1 Gini & Jony: Gini & Jony has a range of brands like GJ Jeans, Palm Tree, Levi’s Sykes Junior, Red River, UCB, Rocky S, and GJ Knowledgewear for kids. They offer a wide range of apparels for children including T-shirts, shirts, jackets, cargos, jeans and trousers for boys, and capris, dungarees, skirts, Jamaicans, and co-ordinate tops for girls. In an exclusive one on one interview with Fibre2Fashion, Mr. Anil Lakani, Executive Director, Jini & Jony, shares his thoughts about the kidswear segment. How does the Kidswear segment differ from Menswear and Womenswear? For a kids wear brand like ours, we clearly differentiate our buyers into Consumers (Kids) & Customers (Parents). The styling, trend and acceptability of the merchandise is not as Subjective in the Men’s & Womenwear as in the Kids segment. Kids segment is highly dynamic as kids get inspired from Men`s wear & women’s wear, celebrities, sportsmen, bollywood and others. As the buying process involves more than one person’s decision, the variance in the purchase patterns are higher as compared to the other two segments. How do you think has the Kids-wear market has evolved during the past decade? Looking at the past, there were not events/ activities in a kid`s daily schedule. But the new age kid today goes for dance class , tuition ,guitar classes, camping’s , etc. and they like to have dressing for each event / activity , therefore the demand in the kids segment has risen over the decade with significant change in the lifestyle of the kids . Such an opportunity has attracted many brands and our customers today have a range of products and brands in their offering. Where do you see the market, 3 to 5 years from now? The Longer term horizon of the Indian market is still promising and with increase in consumer awareness, better exposure to world fashion, need for a better retail experience has given rise to the number of organized retailers. Also with the change in the lifestyle and consumption pattern, the Organized kid`s wear market looks promising. 5.2 Lilliput: When conversing about the Kidswear segment, Ms. Sapna Gupta, Brand Promotion-Marketing, Lilliput kidswear Limited, focused on the unique characteristics of children’s apparel, and addressed about its evolution. She also predicts the market scenario in the years to come. What features distinguish Kids wear segment from Menswear, and Womenswear? “Designing for kids is very different from designing for adults. Kids are a very sensitive target audience that needs to be pampered every now and then. For kids, brand names are not the only factor; kids talk about the style, physical attributes of the product, colors, look etc. It is the whole package that works for the kids – they need to be pulled at all levels to get them to try a brand and stick to it. Dungarees, shorts and shirts are the evergreen fashions in kids' apparel. Short skirts, tops with puffed volume, halter tops, lace trims and cropped trousers are the in things in the world of children's apparel in today's times. Moreover, designing for kids is probably one of the toughest jobs, as they are in this transient phase and their psyche at every age has to be mapped and their

wardrobe designed accordingly. Boys and girls of the same age have a very different orientation towards fashion. Designing for 7-8 year olds is very different from designing for 11-12 year olds. The latter being at a stage where they identify themselves the most with sportspersons, celebrities and superheroes. So attitude and individualistic style is an essential component of the clothing. Further, one cannot compromise on the quality of the fabric; in fact one has to be even more stringent when it comes to kids – non-abrasive, easy iron clothing, low formaldehyde content are a few basic benchmarks one has to adhere to.”

Next, Fibre2Fashion asked about the market evolution during the past decade and the growth drivers that manipulate the kids apparel market. “Initially, in India, the trend was that many people preferred buying functional kids' apparel rather than branded ones. Children's garments were usually purchased from small stores and from street shops, while branded garments were only bought by the elite section of the society. This trend has been gradually changing and the market for branded kids' clothing is growing. According to industry estimates, the Kids apparel market is divided into organized and unorganized segment which exceeds Rs. 17,000 crores, of which Rs.3000 - 4000 crores is constituted by branded Kidswear. It's growing @ 25% p.a. which makes it one of the fastest growing markets. Further, both in India and abroad, with the development in technology, the world is becoming increasingly smaller by the day. Kids of today belong to the screenage (TV, internet, mobile etc.) and thus are more aware of the latest trends and fashion. These factors are the major drivers in the growth of the Kidswear segment, be it in India, or abroad. No wonder, so many men / women apparel brands off late have started seeking Kidswear as the next big thing and streaming their business in the Kidswear as well.” How do you foresee the market scenario, 3 to 5 years from now? “As the branded Kidswear market in India is still in its promising stage thus it provides immense business opportunities both for the existing as well as new players. The industry will witness the entry of many international players thus making the segment more lucrative. Moreover, seeing the huge potential that the industry offers; many apparel brands have started diverting their revenues to the Kidswear segment. Thus, in the coming years, the Kidswear segment will see an upward graph of profitability, opportunities and employment.” 5.3 Allen Solly: Wanting a bigger slice in the market share, Allen Solly has announced the launch of kidswear, a funky, cool, fun and stylish collection. While commenting about the market, Mr, R. Satyajit, COO, Allen Solly says, “The organized kidswear market, excluding school uniforms, is estimated at around 2,000 crores, growing at 30% every year. The kidswear market is among the fastest growing segments in the apparel industry and Allen Solly aims at playing a key role in the branded Kidswear segment.”

Allen Solly has launched its apparels in four collections namely: ‘Colour My World, Urban Holiday, Sports Academy and Enchanted’ being built around the numerous occasions in a child's life. While taking about the quality of apparels, Mr Satyajit states that, “90 % of the merchandise is made of 100 % cotton fabric, which is most comfortable for Children. Strict quality parameters have been followed while designing these clothes including testing for saliva and perspiration color fastness. An attempt has been made at making the merchandise child safe for e.g. care has been taken to not provide any drawstring around the neck and wherever it is included - it confirms to specified length.” 5.4 ZAPP: While international players are entering into the Indian market, and many others, waiting at their wings; seeking entry, domestic apparel brands are extending products for kids. Raymonds, which offer exclusive menswear, launched its kidswear collection in the name ‘Zapp’. It is an integral section bringing fashion to kidswear. Their target customers are kids in the age group of 4 -12 years. Zapp also has a tie up with Warner Brothers to treat the kids with Superman apparels. 6.0 Conclusion: Clothing signifies an individual state of mind and the wearer’s economic status. This is visible ‘crystal clear’ in the kidswear market. Parents crave that their children should dress as well as themselves, and even in a better way. With new players entering the kidswear segment, and heating up the market, old players are pepping up their merchandise, and providing attractive offers and services to charm the customers. Based on the analysis and interpretation, this report draws the following conclusions: There is a high potential for children’s apparel in India both in terms of branding and specialty retailing. However, their success depends on the extent of their product differentiation and retailer experience. Branded apparel is in its nascent stage in India. Industry experts positively assert that branded market for kids is growing at 15% per annum. Along with domestic brands, many international brands are also entering into the Indian market. Marketing of kidswear brands in India is still in the budding stage in India, as very few brands exist, and there is lack of brand orientation amongst customers. Majority of the kids apparel advertising is being targeted mainly on women. Manufacturers and retailers follow appealing marketing strategies to charm the kids as well as their parents. Much focus is placed on in-store arrangements, keeping pace with the interest of kids. Toon inspired merchandise and having special kids oriented promotions are a few to name.

Media plays a major role in influencing the purchase decisions of kids. Effective publicity of mediums like TV channels, video games, blockbuster of superheroes help to boost the kids apparel market. References: 1) 2) 3) 4) 5) 6) 7) “Pester, Power, Ahoy!”, Richa Bansal, Images Business of Fashion, Vol IX, No X, October 2008. http://www.drapersonline.com/ http://www.deccanherald.com http://retailia.blogspot.com http://www.financialexpress.com http://economictimes.indiatimes.com http://www.babyshopmagazine.com/

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