Kidswear, a new rage among retailers, has proven a lucrative vertical for organised retailing. The development has been fuelled by the entry of global brands, which are showing a keen interest to tap the Indian market.
Nitty-gritty of kidswear segment
Kidswear segment is undergoing a makeover with branded apparel houses alluring customers with a wide range of offers. With their foray into the segment, the organised retailing has actually set in, otherwise dominated by the unorganised segment. The market size of the segment is presently Rs 17,300 crore with an annual growth of 18 per cent. Out of this, branded apparel segment contributes Rs 3,500 crore. It is interesting to note that urban kidswear market constitutes 60 per cent of the total market.
The international fashion concept, too, has entered the arena of kidswear. This, clubbed with innovative store designs, has ingrained a lot of glitz and glamour quotient to the segment. To top it all, global exposure of the Indian consumers and their awareness about the latest trend has made a perfect ground for the international brands to start operating in the country.
Brands making a beeline
International sportswear brands like Adidas and Reebok have already made their mark in this segment. Apart from these two well-known names, German brand Kanz has also proved its credentials with its international quality product line at affordable price. Esprit brought out its kidswear line in India and Lee has kidswear line, Dainty Lee and Dribble Lee, for girls and boys respectively under the age group of 2 – 12 years. Mothercare, the UK-based child and maternity brand, has exclusive partnership with Shoppers` Stop and set up its exclusive stores across India. Swiss kidswear brand Milou is also now available in the Indian market. UK-based retail chain, Marks & Spencer, has already introduced its kidswear line at its retail outlets. Several international kidswear brands such as Walt Disney, Whoopi, Tommy Hilfiger, Adams Kids, Pepe, Benetton Kids and Barbie are also present in the country.
Soon, India would have two over-a-century-old American iconic brands, Carter`s and OshKosh B`Gosh. These two brands are going to take the plunge through licensing partnership with Planet Retail. Toutcomptefait and Orchestra are two other international brands from France that hold a strong desire to explore the vast untapped Indian market. Kappa, the Italian fashion sportswear brand introduced in India by LMG Brands, has launched its kidswear range, Kappa Under 14, in the country this year. Taking the cue, sportswear brand Nike and Puma are planning to introduce their kidswear ranges.
Entering Indian shores
The route through which most of these brands have entered the Indian shores is the licence agreement with Indian companies. After experiencing gradual growth, these companies formed their wholly-owned subsidiary, as Reebok and Adidas.
Reebok, through its wholly-owned subsidiary, opened its first exclusive outlet in 1995. This year, it launched its kidswear line under the brand name, Reebok Junior. The promotional campaign of the brand has the tagline, “Made to Play”.
Adidas entered India through a licence agreement with Bata in 1989, but presently operates through its wholly-owned subsidiary in India.
VF-Arvind Brands Pvt. Ltd, a JV between Arvind Brands of Arvind Mills and US-based VF Corporation, that owns the brand Lee, had introduced its kids collection in 2004. Lee earlier has a licensing agreement with Arvind Fashion, a part of Arvind Mills. Esprit, an international brand, has also entered India through a licence arrangement with Madura Garments. The European brand Kanz, comparatively a newcomer, also entered India through licensing agreement with Prateek Apparel of India last year. On the same lines, Swiss brand Milou made the Indian foray with a licence arrangement with Trichur-based Sreeja Hosieries in 2005.
Price, the key factor
Owing to huge middle-class customer base in the country, most of these brands have kept their price tags within the affordable bracket. The price range of kids product line from Adidas starts from Rs 399 up to Rs 1,899 for apparels and Rs 899 to Rs 2,699 for footwear. Adidas`s target consumers are 6-14-year-old.
Reebok`s kidswear line targets the children aged between 4-14 years and is priced in the premium range.
For Esprit, their kidswear line caters to individuals in the 3-10-year-age bracket, and is ranged between Rs 400 to 1,200 price points. For the German brand Kanz, the price range varies from Rs 249-1,300. Coming to a lower range, Milou offers its product line starting from Rs 200 to Rs 900 for 0-12 year-old-kids. Lee`s collection, too, falls in this category. The collection is for children between 2-12 years of age.
Benetton India`s kidswear range starts from Rs 299 and goes up to Rs 2,499 in apparel, while accessories range varies from Rs 149 to Rs 1,599.
Standing out from the rest
These international brands ensure that they offer products of premium qualities in wake of stiff competition in the field.
Adidas stands out for its wide range of SKU. It offers more than 300 SKU per season for apparel, more than 60 SKU per season in footwear and also a wide range of accessories, which include school bags, socks, caps, bottles, football, basket ball, etc. The brand introduces new products every month, reveals Andreas Gellner, Managing Director, Adidas India.
Sanjeev Mohanty, Managing Director, Benetton India, says, “Kidswear is a very important range for us and we manufacture about 4-5 lakh pieces of apparel every year. Benetton Group has over 100 collections a year with all his brands.”
Shamim Sajid, Executive Director, Marketing and Product, Reebok India Company, states, “Reebok has a wide range of collections like Sweets, Pulse, Dance Style for girls and Voltron, Metro Mobility, Edge for boys. It would also introduce an entire new footwear line, which will cater to various sports like football, cricket, basketball, etc.”
Commenting on the playfulness and sporting spirit of children, to which the company is committed, Sajid says, “We are all aware that kids have sports on their mind most of the time and they even aspire to be leading sportstars of the country one day. Thus, Reebok aims to support such kids in bringing them closer to their dreams. Through this initiative, we are taking a step ahead by introducing an entire sports gear range of both apparel and footwear for these young champs.”
Abhishek Chandra Saroj, Business Head, Kanz India, says that their brand has the look and feel of a premium brand but the price of a medium range brand. The brand uses pre-washed soft fabric for the product line and changes style every 45 days.
“Milou offers more than 500 styles and changes collection every three months. The brand Milou works on the “mix and match` concept, wherein customers get a freedom of choosing the desired number of top and bottom wear. The brand`s USP is value for money,” says MNS Nair, CEO of Milou India.
Adidas sources products both locally and from the Adidas global supply base. “We have a strong sourcing base both in India and abroad. We authorise suppliers to manufacture Adidas products, based on the manufacturing credentials. Our suppliers have to comply with Adidas`s code of conduct or SOE (standards of engagement), which requires core labour standards, health and safety of the workers,” divulges Gellner.
Esprit has a team of Indian buyers, who source garments for the Indian market on a monthly basis, keeping in mind the Indian trends and needs. These garments are of global designs that are designed by international designers in Germany. Esprit does not do any local designing or manufacturing.
The casual wear and fashion clothing line that Benetton sells in India is locally manufactured, though the designs are selected from the global collection, created by the product design and development team based in Italy. “Significant care is taken to look into individual markets and introduce styles that will suit the requirements of these markets, but a large percentage of the collection is core and uniform across most markets,” informs Mohanty.
Almost 30 per cent of Kanz`s products are manufactured at its Indian unit and the rest are imported. Milou in India has the state-of the-art factory with all modern machines to manufacture the garments in India.
Franchising forms the foundation
Franchising is the quickest way to reach out to customers. It has its feasibility in the local markets. This fact has been acknowledged by the franchisors like Adidas, Reebok and Kanz. Reebok has 700 retail stores across India and Adidas has 325. All of them are franchised. Gellner of Adidas says that they look for franchise partners, who have long-term business plans with a team to execute it, adequate financial fund and passion for the brand.
For Benetton India, franchising is an important component and currently, the company has 100 franchised stores in the country, informs Mohanty.
“Benetton`s endeavour has always been to develop strong partnerships. While finalising franchisee partners, the company looks at their experience and expertise in retail and the capacity to invest and share risks,” he says.
Commenting on the franchise business model, Mohanty says, “Franchising is a good option because it enables partnerships. It brings in investments and retail experience from the partners, who know their local market very well, so that we can satisfy customers` expectation.”
Kanz feels that property ownership is the paramount criterion for a prospective franchisee. “A franchisee has to be the owner of retail property at a good location, preferably on high street or in a mall,” reveals Saroj of Kanz. Milou looks for a franchise partner, who has experience in kids garment marketing with at least 600- 800 sq.ft of retail space in a prominent location.
Strengthening its foothold
Kids now-a-days are well aware of the latest trends and influence their parents in purchase decisions. The trend has send a positive signal to foreign brands, eying the Indian market. Apart from expansion plans, combined with innovative campaign, astounding store experience and world-class merchandise, these international brands have already crossed the threshold to make a deep impact on the Indian consumers preferences.