Industry Overview of Baby Care Product Industry

India is a lucrative market when it comes to baby care products. InvestXP provides to you a brief in this sector.

How many times did you notice small children and babies using sophisticated products? Apparently, these products are manufactured by industry which has shown trend that is different from other sectors.

What might seem as not a very lucrative sector in global cum Indian market – baby products, is gaining a lot of attention because of the unprecedented growth rate.

In 2016, India had around 73.3 million babies in the 0–2 year age group and 252.5 million children in the 0–12 year age group. This makes India an important world market for baby and child products. Increasing awareness among parents about baby care and wide availability of baby care products in India have changed the mind-set of people in the country and has transformed the demand scenario considerably. Furthermore, there is a significant demand for high-quality baby products, since most people are staying in nuclear families now-a-days and have a single child. Therefore, they are prepared to spend a substantial amount. In the baby food segment, there is rising awareness among parents to fulfill nutritional requirements of their babies adequately. Parents, primarily among the working class population, are looking to compensate for the little time spent with their child by giving them the best with respect to their nutritional, hygiene or lifestyle-related requirements. Furthermore, the increase in disposable income, double income is empowering Indian parents across middle and upper classes to spend more on baby care products.

Global Industry Overview

The baby products market comprises of baby and toddler wear, baby food, baby and child specific products and nappies/diapers.

Global baby food market by retail value (in US$ million) Source: Euromonitor

The global baby product market is estimated to be US$166 billion in 2016, it has grown at a CAGR of 3.7% during 2011-2016. Baby food holds the largest share 45.0% of baby products market, followed by diapers 25.5% and baby & toddler wear 20.2%.

Indian Industry Overview

The Indian baby products industry comprises of baby and toddler wear, baby food, baby and child specific products and nappies/diapers. It grew at CAGR of 14.9% to reach US$2.5 billion in 2016. Baby and toddler wear has the largest market share (35.3%) followed by nappies/diapers (27.6%) and baby food (25.1%).

Indian baby products market by retail value (in US$ million)
Source: Euromonitor
  • Baby and child-specific products industry was valued at US$204 million in 2016, growing at a CAGR of 8.3% during 2011–2016. Growth is driven by new consumers entering the market due to rising awareness and availability as well as the growing number of urban affluent consumers with nuclear families increasing spends on baby and child-specific products.
  • Baby and toddler wear has experienced growth over 2011-2016 at 19.5% CAGR to reach US$882.3 million in 2016.
  • Baby food market grew at 7.8% CAGR during 2011-2016 which is still slower mainly due to he increasing awareness of breast-feeding and food adulteration incidents in leading baby food brands.

Baby diapers is the fastest growing segment due to a number of factors including rising disposable incomes, the increasing number of nuclear families in urban centres, rising awareness of benefits of diaper in rural areas and the expected rapid growth of modern retailers. It grew at CAGR of 22.1% to reach US$689.6 million in 2011-2016.

Notable Brands

Some of the good baby care products in India

Prominent Indian brands in the infant and baby apparel sector include Lifestyle, Lilliput Kidswear, Toon Kidz, Gini & Jony, Lilstop, Zapp baby zap and Mom & me. Additionally, leading apparel brands such as Allen Solly, Arrow, Reebok, Puma, Woodland and Marks & Spencer have entered the branded kid apparel market. Brands such as Benetton, Pantaloons and Reebok have roped in popular characters like Pucca, Ben10 and Power Rangers for co-branding their products for publicity and marketing support. Sports goods major Reebok launched its kids-wear brand Reebok Junior mid last year.

Needless to mention, with the urbanisation of rural areas in a country like India, the demand of baby product shall apparently rise in future.

Author | Kshitij Chitransh