FROM BABY STEPS TO A GIANT LEAP

WITH the ever growing demand of designer apparels for kids, the garment sector in kidswear has become exceptionally competitive, as both established and novel brands are trying to carve out a niche in order to hold the pulse of the Indian middle class.

Specifying the facts, Anil Lakhani, Executive Director, Gini & Jony Ltd, says: “The total kidswear market in India is pegged at about Rs 3,800 crore in the current fiscal 2011-12 with a growth rate of 30% per annum. Kidswear as a whole contributes 15% of the overall apparel market in India.”

Market outlook

While the kids' apparel market was still at a nascent stage, big brands managed to achieve a breakthrough in the kidswear sector. Elaborating on it, Deepak Mehta, spokesperson, Catmoss, says: “We had entered the apparel market for kids when there were not many competitors and the market was emerging. Catmoss leaped into the kids garment market in the year 2004. The market has grown at a fast pace since then, owing to media exposure, rising per capita incomes and brand consciousness of people.”

Agreeing with him, Pawan Agarwal, CMD, PB Retail, promoter of My Mart, a kids apparel brand, says: “The Kidswear market is an organised retail market and is growing. In the last 15 years even accessories for kids have evolved and are expected to grow further. Our brand caters to the middle class and the lower middle class of the society, as big brands like Catmoss and Gini & Jony are experienced players and are expensive. Thus their consumers are mostly from the upper middle class and upper classes.”

My Mart had opened its first outlet in May 2011, and is presently successfully running nine outlets in New Delhi and has experienced a surge of customers to splurge on their kids' apparels.

Sharing the journey of Gini & Jony in the apparel industry, Anil says: “The brand was created and launched in 1994 as an international quality apparel brand. It's a brand kids adore and Gini & Jony has won admirers and accolades both in India and abroad throughout its 30 years of experience. We were the pioneers in the kids segment; hence, the consumers welcomed the brand whole-heartedly. The unorganised structure of the kidswear industry was and is a threat. Across India a large segment of consumers still prefer buying from open markets rather than chain stores and exclusive brand outlets (EBOs).”

Elaborating on the trends, Anil specifies: “But there is a trend we are seeing where parents need assurance of good quality which they get from branded products. Hence, they do not mind spending on branded merchandise. Also, parents are getting more conscious about their kids' dressing which is getting them to our stores.”

Roll out prospects

Most of the apparel brands are franchising presently as entrepreneurs advocate it to be the best business model owing to its role in the quick growth of brands.

On this aspect, Deepak says: “Definitely franchising is the best option as the brand grows and is successfully able to reach the interiors of the country. Presently, we have about 196 exclusive outlets, of which 75 per cent are company-owned and 25 per cent are franchisees. We also have approximately 370 multi-brand outlets. Franchising has proved to be a successful business model, whether it is the F&B industry or any other. Almost every brand is franchising presently.”

Disclosing the future plans of Catmoss, Deepak says: “We are presently targeting West India, East India and South India, along with tier II cities. Catmoss is a leader in its segment and will get bigger and stronger by every passing day.”

On the franchise-business model Gini & Jony's Anil Lakhani explains: “The franchise model allows the brand to reach to various parts of the country. We have been present in tier II and tier III cities through our other mode of operation and we have understood the fact that consumers in these cities aspire for quality products and brands. It was only obvious that we opted for the EBOs in these cities to fulfil the aspirations of consumers. Unlike other segments, kidswear is a game where options play a major role. Presently, we have about 260-plus stores pan-India and we are looking at more stores till the end of the financial year.”

Sharing his views on franchising, Pawan Agarwal says: “I have a simple belief that the more hands you have at work, the better output you will get which will help in building a better brand value. I cannot look after several company-owned outlets. As we all know that kidswear is the biggest retail market, I am keen on developing a franchise of my brand. The blueprint is ready and we would be acting soon. But most importantly, I would like my franchisee to own the area rather than taking it on rent, as the profit margin would fall in the latter case.”

Blossoming together

In an analysis carried out by ASSOCHAM on “Market of Indian kidswear”, it has been pointed out that kids fashion has percolated down to tier II and tier III cities like Dehradun, Chandigarh, Pune, Nashik, Indore, Varanasi, etc.

Even Gini & Jony has been aggressively promoting their product in the competitive industry. Says Anil: “Apart from the usual print and outdoor advertising, we do a lot of direct contact programmes at stores, schools and malls. We have fashion makeover events at stores where the kids are invited to try different clothes at stores suggested by our stylists and we also do a photo session for them. Both kids and mothers enjoy this activity. We even conduct budding designer and drawing competitions at our stores to keep the kids engaged with the brand.”

Likewise, popular brands, such as Catmoss, have been introducing fashionable and trendy apparels. Deepak Mehta agrees that the kids' apparel industry has evolved by leaps and bounds in the last few years and is expected to grow further. “The kidswear industry has become really competitive over the years. In order to cope with the excessively competitive market, we indulge in aggressive above the line (ATL) and below the line (BTL) activities, along with loyalty programmes and aggressive promotions for consumers. By ATL promotions we refer to all promotional activities done by companies through mass media. In common parlance, advertising is the major ATL activity and all other forms of promotions, except direct marketing, are termed as BTL activities,” says Deepak.

While brands like Levis, Lee and United Colours of Benetton already have separate sections for kidswear and eventually plan to start exclusive brand outlets, they pose a threat to the popularity of niche kids' apparel brands. However, Deepak has a completely different view on this issue. He says: “Catmoss has its own share of loyal customers and they prefer buying apparels manufactured by our brand only. Moreover, the USP of our brand is its ethnic wear for children, which makes us stand out from others.”

On the other hand, Pawan Agarwal has a different outlook towards brands like Levis Lee or Catmoss. He asserts: “My Mart's potential buyers are not high-end customers. We manufacture a pocket-friendly product, which is trendy. We have not priced highly the apparels and accessories for kids and these items are pretty affordable. Thus, apparels from big brands are very expensive and a person with limited income thinks twice before splurging on such expensive products.”

Accepting that the competition is definitely increasing with new international brands coming to India and the consumer also getting brand conscious, Gini& Jony's Anil says it doesn't affect their brand as such. “Major players like Levis, Lee, Allen Solly and Tommy kids are making their way into the Indian market but their presence will not really affect Gini & Jony because of its brand loyalty and its vast presence across all channels of operation like MBO, EBO, LFS, etc. We have three in-house brands with three different brand philosophies catering to the respective sets of consumers and these brand philosophies would remain, whereas the other brands would be catering to just one segment or two and so far have one channel of operation. We would continue with our philosophy and would rather wait and see what other major players are focusing on and then strategise to remain what we are, the number one kidswear brand in India,” he adds.

FRANCHISE FACTS

Gini & Jony

Investment: Rs 20-60 lakh

Area: 600 1,400 sq ft (GJ & FF STORES)

RoI: 18- 26 %

Break-even: Depends on rent to sale ratio

Profit-margin: 6-20% on investment.

Catmoss My Mart

Investment: Rs 20 -30 lakh Rs 1,500 per sq ft

Area: 750 sq ft 500-3,000 sq ft

RoI: 24% 30%

Break-even: First year 6 months to one year