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Baby Care Industry In India

The baby care market in India is expected to grow at an annual rate of over 17% in terms of revenues during the 2014-2019 period to reach over $31 billion, from $14 billion.

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Definition / Scope

Baby care products industry comprises of segments which address various basic needs of a baby in day to day life. Any product that promises to meet the demand for taking care of an infant, generally between o-4 years of age, falls under this industry. Typical segments of this industry are skin-care, hair care, baby food, toiletries [diapers and its accessories and wipes], apparels & footwear, toys, baby convenience and safety products etc.

India, with 1.28 billion people, is the second most populous country in the world, just after China. More than 127 million children under 4 years, along with its nearly 27 million annual births and a fertility rate of 2.72 children per woman. The country has 20% of the 0-4 years' child population of the world. The number of live births in the country is estimated to be 27 million, which again constitutes 20% of the total number of live births in the world. Thus making India as an attractive market for the baby care industry.

Market Overview

The baby care products industry in India has experienced a tremendous growth in the recent years making India a worthwhile market for such products amongst the other emerging nations. Earlier, the baby care market was in nascent stage and was not given much attention.It was considered to be a niche industry from an Indian perspective but now is ready for its greatest metamorphism into a high potential and growing industry.

  • According to a report by TechNavio, the baby care market in India is expected to grow at an annual rate of over 17% in terms of revenues during the 2014-2019 period to reach over $31 billion, from $14 billion.
  • In 2014, the baby apparel segment accounted for more than 90% of the market, followed by toys at nearly 7%, the advisory company found. Segments such as baby cosmetics, food, accessories and diapers together constituted over 2%.
  • Johnson&Johnson, Nestle, Procter & Gamble, Dabur, Wipro, Pampers, Huggies, Walt Disney, Lilliput, Gini & Jony, Mom & Me and Archies are well-known brands in the Indian market.
  • In India, baby and child care products are available on e-commerce platforms such as Flipkart, Snapdeal and Amazon. Furthermore, some online retailers such as FirstCry.com cater exclusively to this booming segment.
  • Increase in livebirths, increase in disposable income, growth in online buyers, rising literacy, working mothers, growing awareness about buying quality products or increase in brand awareness are among the factors driving the baby care market in India.

Key Metrics

Metrics Value Explanation
Base Year 2017 Researched through internet


Top Market Opportunities

Increase in Live Births

In India Increase in live births and being a highly populous nation comprising of more than 127 million children under 4 years is one of the greatest contribution towards the rise in demand for baby care products.

Country-wise Population Table

Country 2000 (Millions) 2014 (Millions) 2025 (Millions)
China 1,262.60 1,364.30 1,411.20
France 60.9 66.2 69.5
India 1,042.30 1,267.40 1,418.70
Japan 126.8 127.1 123
Russian Federation 146.6 143.8 137.5
United States 282.2 318. 9 345.1

Population Age Composition (2014)

Country Ages 0-14 (%) Ages 15-64 (%) Ages 65+ (%)
China 18 73 9
France 18 64 18
India 29 66 5
Japan 13 61 26
Russian Federation 16 71 13
United States 19 66 14

So it is clear that India is highly populated and stands next to china, yet India has 29% of Population between 0-14 which is more than that of China’s 18%. Also the live births rates too notably high in India. So this opens up a huge potential for baby care products demand to acquire a rising trend in India. In India the growing trend of population in the age group of 0-4 has been providing extra ordinary opportunities as compared to any other baby product market worldwide.

Birthrates.png

Fewer child per household & increase in disposable income

Increase in disposable income has empowered Indian parents to spend more on baby care products. Rapid economic growth leads to raise in income levels of people and in turn the purchasing power too has increased remarkably. Earlier the number of Kids per family were high in India, and the disposable income levels too were low. Also In olden days Majority of the Indian families have never considered baby products as an essential item and prefer using home-made food and adult personal care products for their babies. But now every family has one or two kids, and with the increase in disposable income, people are willing to spend more on their newborns/Kids.

Increase in online baby care products

According to an article “Online shopping to boost baby care segment” in Business Standard, “The e-commerce market in India has already attracted $106.66 million in foreign direct investment so far. The market grew at a staggering 88% in 2013 to $16 billion, riding on booming online retail trends and defying slower economic growth, according to a survey by industry body Assocham.

As the internet user base grows in India, the consumer comfort to shop online has shown consistent increase with over 20 million internet users transacting online and over 60 million users going online to check for products.

The article also points out the “Apart from electronics and apparel, baby-care product segment is really taking off online. The online baby-care market mainly consists of segments such as baby food, skin care, toiletries/ diapers, toys, gears and baby nursery.

The market share for baby care products is $5 billion of which baby clothing constituents 65%, baby gear and outdoor is about 18% and baby FMCG is about 17%. It is good to hear that the share for baby care products online is $100 million in 2014 and is expected to grow to $ 500 million by 2017.” As per the players dominating this niche, the market size for baby products in India is about Rs 15-25 billion, out of which, the estimated online market for baby product hovers around Rs 100-120 crore and experts opine that it tends to double every 6 to 8 months.

It is a well-known fact the Indian market offers immense opportunities to the players in this segment as India is home to around 50 million children in the age group of 0-2 years and 304.8 million children in the age group of 0-12 years. Major E-retailers such Amazon, Flipkart, Firstcry, Babyoye, Hopscotch.in, hoopos and Snapdeal have taken the lead in babycare segment and are offering great deals.

Rising literacy, growing working mothers, brand consciousness

In India the literacy rate is growing and less than half of Indians in their twenties have completed secondary education. In 2011, 77% of men and 55% of women were literate. There is a variation between Literacy rates between urban and rural populations. In 2011, 80% of urban women were literate compared to 59% of rural women. Also the number of working women is growing, in 2009-2010, women were 26.1% of all rural workers, and 13.8% of all urban workers. Women earn 62% of men’s salary for equal work. In the next 40 years, India is projected to add 424 million working-age adults. Taking all these factors like literacy rate, higher number of working women, adds in more income levels to the family. As the working mothers are spending more on baby care products there is a steady rise in the baby care industry. People are educated now a days and they want to give the best for their kids. They become more brand conscious and try to pick products best in the industry.

Parents are very wise in picking products for their kids, It is amazing that Baby-care product category is seeing phenomenal growth in search queries - queries originating from desktops have grown 45% year on year while that from mobile phones have grown at 93% year on year. This growth is a reflection of how parents are using the internet to find information online before finalizing their purchase decisions.

According to an article “Online shopping to boost baby care segment” in Business Standard, “We are also seeing growth in brands related search queries. The most searched brands for baby clothing are Mothercare, Carter, Snuggles and Mom and Me. Chicco, FisherPrice and MeeMee are the most searched brands for Baby Gear and Strollers. Huggies, Mammy Poko Pants and Johnson & Johnson are the preferred choice when it comes to diapers and pampers”

Market Drivers

According to a report by “researchmoz”, Baby care products market is comprised of baby skin care products, baby hair care products, baby bath care products, baby diapers, baby perfumes / fragrances, and baby convenience and safety products. These products are broadly categorized under baby cosmetics and toiletries products and baby safety and convenience products. The baby cosmetics and toiletries market was the larger market segment with a revenue share of 92.2% in 2011. The segment will further consolidate its position with 93.2% market share in 2017. The global baby care cosmetics and toiletries market was worth USD 41.3 billion in 2011 and is expected to reach USD 62.3 billion in 2017 with a CAGR of 7.1% from 2011 to 2017.

As per the report conducted by RNCOS Indian baby care market is expected to grow further into 2015. Driving factors include increasing spending power and increasing awareness about baby health and nourishment. The report was presented at South Asia's first Child, Baby and Maternity Expo (CBME), India 2013, an event organized by UBM India. The report states that the Indian baby and child care market has substantially grown during the past few years and caught the attention of many international players. Estimated to be INR 647.6 billion (US $11.91 billion) in 2012, it is forecasted to register a CAGR of around 17% from 2011-2015.

The child and baby care market comprises baby cosmetics, food, diaper, baby and children apparel, footwear, toys and accessories/merchandise market. The majority of the market is children and baby apparel at INR 586.1 billion (US $10.78 billion); however, the cosmetics market is valued at INR 7.9 billion for 2013 (US $140 million), which is growing at a CAGR of 12%.

The baby food and diapers market are also expected to grow from 2011-2015, at 10% during 18%, respectively. The toys and accessories markets are also forecasted to grow.

According to the recent study by research and consultancy firm RNCOS, the domestic baby and children care products market which includes apparel, footwear, toys and baby cosmetics is growing in sync with the retail industry growth, and is estimated to grow at a CAGR of around 17 per cent during 2012-2017 to $ 26.2 billion from $ 11.8 billion in 2012. Despite worldwide economic crisis, the sales risen to $ 11.8 billion in 2012, owing to strong demand for baby and children apparel, footwear, toys and baby cosmetics, RNCOS said in the report.

Market Outlook

India has a young workforce and population. In the next ten years, with both younger people and women entering the workforce, India expects to add an additional 110 million people to its labour force. Also the nation is experiencing three major population trends which will have impact economic growth, they are 1) the population of working age people is growing, 2)people are moving from rural areas to the cities, 3) rising middle class is increasing overall wealth. These trends will bring in an enormous growth in baby care industry. Also since Indian people are more educated, more brand conscious, more variety as well as quality seekers, in the coming years, innovation in products and marketing strategies will be the key focus areas for most of the companies operating in the Indian baby care market. Also there is no doubt that the penetration of baby care industry will get deepen in both rural and urban areas of the nation. Unlike other categories, baby-care segment has seen higher number of repeat purchases, with over 50% of shoppers being repeat buyers. Among which 60% are women buyers. As per industry estimates, 15 baby care products sold online every minute in India.

India continues to add over 5 million new mobile internet users every month, and there are high conversion rate on mobile app than the websites. So if the e-commerce players continue to keep their online store up to date in line with technology improvements, then definitely they could capture lots of online buyers. Also innovation in products, marketing offers, and wide range of products too can boost the customer’s usage and paves way to drive more sales. So the market, hitherto considered as a niche segment in the Indian perspective, got it’s time for the metamorphism into a highly potential & fully fledged industry. India will also attract many leading international companies, diversifying their product portfolios.

Key Market Players

The top companies in Baby care products market are, Johnson & Johnson, Kimberly Clark, Procter & Gamble, Unilever. Other popular vendors are Aditya Birla Group, Amul, Brevi, Chicco, Combi, Dabur, Dorel Industries, Emami, Fisher-Price, Hasbro, Himalaya Drug Company, Infantino, Krauter Healthcare, Kiwi Baby, Lilliput, Mom and Me, Marico, Mothercare, Nestle, Newell Rubbermaid, Peg Perego, Pristine Organics, Wipro, Wockhardt etc.

Baby care market is dominated by Johnson & Johnson with about 80% of market share. Kimberly Clark (Huggies) and P&G(Pampers) leads in toiletries and diapers segment while Johnson & Johnson dominates the skin/hair care segment. Other major players in this Baby skin care are Wipro, Dabur India, JL Morrison India, Himalaya etc. Baby food market is dominated by Nestle’s Cerelac and Nestum followed by Workhardt’s Farex.

References

  1. http://asia.nikkei.com/magazine/20150521-GENERAL-MALAISE/Business/Indian-baby-care-market-heats-up-as-Dabur-marches-in
  2. http://blogs.wsj.com/chinarealtime/2014/09/02/baby-boom-or-economy-bust-stern-warnings-about-chinas-falling-fertility-rate/
  3. http://www.worldbank.org/
  4. http://www.gcimagazine.com/marketstrends/regions/bric/Indian-Baby-Care-Market-Expected-to-Grow-into-2015-204878871.html?mobi=y
  5. http://www.catalyst.org/knowledge/women-labour-force-india#footnote20_wxmh0nt
  6. http://wap.business-standard.com/article/management/online-shopping-to-boost-baby-care-segment-114110200597_1.html
  7. http://www.slideshare.net/ResearchOnIndia/market-research-india-baby-care-market-in-india-2009
  8. http://www.indianretailer.com/article/sector-watch/specialty/Booming-Baby-Care-Market.a316/
  9. http://www.nextbigwhat.com/online-baby-product-business-in-india-analysis-297/
  10. https://en.wikipedia.org/wiki/Demographics_of_India
  11. http://www.technavio.com/report/baby-care-products-market-in-india-2015-2019
  12. http://www.dnaindia.com/press-releases/press-release-indian-baby-care-industry-to-touch-inr-10904-billion-by-2015-rncos-study-1821763


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