A few years back the baby care industry was limited to skin care which was dominated by Johnson & Johnson having the lion’s share of the market at 85 per cent. However, this has undergone change over time. With highest number of babies in the world, India becomes one of the most lucrative destinations to invest and reap the fruits. The opening Indian economy and breaking of cultural myths, Indian customers, especially mothers have been the trend changer and setter for many in this country.
If we analyse the trends which have exposed a huge untapped potential for the baby care industry in India, Indian women play a significant role. Commenting on the same Kanchan Lall, Associate Vice President, Tecnova said, “Since the socio- economic status of women has remarkably changed, it has shown a noticeable difference in the attitude towards baby care”. If we talk about marriages, this generation is entering the wed lock only after they are financially stable and well off; this is another reason why family’s disposable income has increased. The phase where one family used one soap and tooth paste is now a thing of the past. Babies get a special treatment today. Sales of baby toiletries, in particular, are also being boosted by female consumers increasingly opting to buy baby care products instead of adult products because they are seen as being milder.
Players and Market
To tap this huge potential, action has been heating up in the Indian baby care market with international brands such as Avent, Nuby and Tenderils deciding to introduce specialised premium products in a bid to grab market share from well-entrenched players like Johnson & Johnson.
The organised domestic baby-care market was limited to personal care products which was dominated by Johnson & Johnson followed by Wipro (Consumer Care), which has a limited number of products. However, given the rise in organised retail and growing number of pharma retail chains, Sunil Choudhary, Senior Consultant, Tecnova expressed,”The time is right to expand in the country with premium offerings, the industry which was dominated by skin care segment has seen recent developments in juvenile and nursing category. We get around two to three queries every 15 days and very soon we will get a few announcements as well. 20 per cent of the world’s babies are in India”. Products like feeding bottles, nipples, baby-apparel and baby accessories have been seen catching up customers at great pace.
Global players targeting Indian babies
India has 65 percent young population and becomes home to 20 million babies every year is the most favoured destination for most of the brands. Though majority of the Indians are still not well aware of the baby care methodologies, but it’s the numbers which make India their favourite destination. When asked about the reason why India is such a hot destination for more and more companies, Lall said, “Disposable income that goes towards spending on kids is higher than the western countries. And even one per cent increase in the sales converts into big figures in India”. In India, the baby care Industry has seen a growth of 20-25 per cent whereas in the western countries it is around five to seven per cent. Indian baby care market which was organised only six years back has grown to become a 10,000 Crore industry today.
Talking about which all cities are their target, Choudhary said, ”They are focusing on the top 20 cities in India which include metros and Tier-1 cities like Chandigarh, Pune and Amritsar. These are the places where the mothers are aware of the usage of child care products”.
Caring babies via .COM
In the recent times, the Indian market has seen a lot of online players. Babyoye, Firstcry and Hoopos have been doing a relatively good business as compared to online players in other countries. Interesting element of this business is unlike any other retail-online story; in baby care industry instead of giving a competition to each other they are complimenting each other. Commenting on the same, Lall said, “People usually do not buy baby products before they are born. Retail outlets distribute Marketing campaign catalogue to pregnant women, mothers take it away and after pregnancy when they can’t come to the stores, they can order online. So it is helping the sales”.
But Vijay Jumani, Co-Founder & CEO, hoopos.com has a different take, he said, “Online and offline are obviously competitors, but in the future these retail outlets will be the experiential zones whereas the online will be more about access and convenience, so each retailer will have to make an online presence, if you check the sales, on weekdays it is more online and on weekends it is more in the stores”.
These online portals are the only tool till date to penetrate the tier-2 and tier-3 markets but when asked about the challenges they are facing, Choudhary said, “Though they are the best possible option to reach out to the interested tier-2 and tier-3 customers, but the delivery charges is what makes it difficult for the business to make profit, but there definitely is a lot of demand showing up in the tier-2 market as well”.
Talking about the online growth story Jumani said, “We have been growing at a rate of 25 per cent per month and the online baby care market is expected to grow at 100 per cent per annum.”
Another challenge faced by such companies is the ban on advertisements. Just like alcohol is banned, Indian government has banned any advertisement which shows the benefit of any product over mother’s milk.
The industry does posses a lot of potential with enough room for everyone.