Kids retail Aug, 11 2010

Tots Offering Lucrative Franchise Prospects

Baby product market in India is still largely dominated by the unorganised players. However, the potential of this untapped market has encouraged the national and international players to venture into this industry and explore various opportunities via fr

By Ramanjit Kaur
Feature Writer
Tots Offering Lucrative Franchise Prospects

The baby product market in India is emerging as a lucrative franchise opportunity. Factors like increasing awareness among Indian parents for branded baby care products and surging income level of the middle class have given much required boost to the industry. The entry of large number of national and international players in the industry through franchise route, is offering abundant franchise opportunities to the aspiring entrepreneurs. The article gives you an insight of this mammoth sized baby products industry, which is gaining prominence through the franchise route.

Industry growth

The Indian baby product market offers business prospects in various segments like baby food, baby care products, accessories, gifts, clothing, toys, games and so on through franchise route. As per Rakesh Dhawan, Proprietor, Aardee Specials, “India has a very young population with more than 50 per cent below the age of 25 years. Moreover, it has an ever growing middle class with large disposable incomes. Hence there is tremendous potential in businesses connected with babies and children.”

According to the Indian baby care market analysis, the Indian baby products market is gradually growing over the past few years. The impressive performance of the industry during the year 2009 and the rising preferences for branded baby products will help the industry to witness a CAGR of more than 11 per cent during 2010-2013 and reach INR 28 billion by 2012. The successive growth of the industry is alluring more number of international brands to enter the Indian market with their diversified product lines through the franchise business route to enjoy a fair share of the pie.

Prominent players offering franchise

Though the baby product market of the nation is at its nascent stage, but few international brands with their wide range of products (such as baby food, skin care, toiletries and diapers, hair care, toys and baby accessories) are already dominating the sphere. Here is the list of the brands that are not only established but has spread their wings across the nation through franchising.

  • Destination Maternity: Destination maternity retailer entered India through an international franchise agreement with Mahindra Retail, part of the Mahindra Group. The company has introduced brands like Motherhood Maternity, Destination Maternity and A Pea in the Pod and their products are available at Mahindra Retail's new Mom & Me stores in India. These stores offer products such as maternity wear, kids’ fashion wear, educational toys, games, wellness products for mothers and babies, nursery, furnishings, travel and safety products.
  • Mothercare: Mothercare marked its presence in India though a JV with DLF, one of the largest real estate company in India. Mothercare will own 30 per cent of the new joint venture company and DLF will own the remaining 70 per cent. The company also has arrangements with Shopper’s Stop to expand the presence of the brand across the nation. Presently, the company is operating through 23 franchised outlets and is planning to open around 200 stores in the coming few years.
  • Chicco India: A baby care brand of an Italian health and wellness products major Artsana SPA. According to the Business Standard report, the company has plans to open around 10 exclusive outlets by the end of 2011 in major metros and tier-I cities, besides hundreds of points of sales throughout the country in the multi-branded format.
  • Hauck: Hauck a Germany based multi-national company, came into existence in 1920. It has marked its presence in more than 50 countries worldwide. The company entered India in 2009 through Aardee Specials on an exclusive distribution license to develop its channel pan-India through distribution and franchising model. Hauck Group has been manufacturing baby prams, strollers, car seats, high chairs, playpens and many more such items.

Baby product franchising

Franchising is considered as the most lucrative way to start or expand a business and is exercised by most of the foreign brands. Thus, it is always considered as a better way to take up a franchise business rather than going it all alone. Commenting on the company’s expansion through franchising, Dhawan says, “We have adopted the distribution/franchise business route to cover the whole country under our brand umbrella. We are appointing sub distributors in every state in India. To begin with we would like to cover all the metros and state capitals, and then move on to other cities.” To initiate a business in this emerging industry, an entrepreneur needs to have good business acumen and selling skills, own set-up and network of retailers in order to successfully operate the franchise business. As Dhawan informs, “The sub distributors / franchisees should be financially sound and initially need to invest Rs eight to 10 lakh.”

Handholding and support offerings

Most of the franchisors provide every possible support to its franchisees in order to ensure smooth and profitable franchise operations. They support them in suggesting the layout of the outlet and marketing the brand at the local level. Besides these supports, the franchisors also cover all their respective sub distributors and retailers on the official websites, and print media.

Thus, to conclude, baby product industry has immense potential for growth. Though, maximum share of the market is still dominated by the unorganised players but the emergence of a large number of franchised players is slowly turning it into organised one. Moreover, the industry being nascent, scope for growth and success is huge.

Related: 'Identify the right business opportunity'

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