Market for Baby-care Products

A whole new world of baby care products and services opened up for the family of AS, who did not think twice before purchasing such brands easily available off the-shelf, or take recourse in the services of well known pediatricians, as advised by other experienced parents.

From new type of vaccines (Hepatitis B and C vaccines) to branded clothes, toys and cereals, the AS did not hesitate in showering their love on the new born.

It doesn’t matter to parents what they spend on their babies. Clothes, toys, diapers, form a major part of the expenditure. Even in medicines, pediatricians recommend certain flavor suited for babies, which are at a slight premium to those consumed by adults. These were, of course, non-existent a few years back.

Most parents are budgeting comparatively higher expenditure for their babies. This is mainly because disposable incomes have gone up, most urban couples today have relatively fewer children compared to the earlier generations, and there is availability of more branded baby care products in the country.

Such expenses, according to industry experts, have nearly doubled over the last four-five years. Given that there is a ready market for baby care products, international brands like Mother-care have launched a range of products in India.

Earlier, a restricted range of baby care products were available through the grey market. These were expensive and catered to a select section of the consumer base. Today, we see a higher degree of spends by parents mainly because of the emergence of malls and expansion on retail space.

The categories covered under this market are Kids apparel, consumables, maternity products, playing material, sleeping products, bathing products, feeding / eating products and traveling products.

The overall CAGR (compound annual growth rate) for the market is 13%. The market is estimated at Rs 7,440 crore in 2006.

The fastest growing category is traveling products at CAGR of 25%. This category is the smallest in size and will nearly double in the next three years.

The infant market has outgrown its infancy. Given that people today prefer fewer children compared to the previous generations, they are more emotional and passionate about spending on them. During the last few years in which this market has seen a boom in growth, individual salary levels have also gone up and most households are blessed with double incomes.

In addition to the range of baby care products to choose from, health and safety of the baby is top-of-the mind. New-generation parents are no longer satisfied going to their family doctor or a general practitioner (GP) when it concerns child. They prefer a pediatric even when the baby suffers from the common cold. The market for pediatricians, who are essentially child specialists, has grown because of this demand.

Further, parents are making early decisions on investments in children’s financial products to take care of their education, and other future needs. The total monthly outgo on a baby could be anywhere between Rs 2,000 to Rs. 5,000.

Considering that the child birth rate is 25 per 1,000 Population every year, around 25 million babies are born in India. This opens a huge window of opportunity for baby care product makers.

The baby care product market is still premature in India as the country still does not have enough safety laws in place for new born babies and children vis-à-vis developed nations. For instance,
Car seats for babies up to a certain age group are mandatory in other developed markets. There are regulations on the type of dyes used in clothes babies wear, as also norms on avoiding taking babies out to high-pollution areas.

Consumers need to become more aware of these safety norms for babies. That’s when the Indian baby care market will really mature.