Many parents today probably remember the days when they shared a bed with their grandmother, a wardrobe with their parents and toys with their siblings. There was never an exclusive children’s room, nor walls painted to suit their children’s tastes. Furniture and furnishing meant just for children? That just did not exist a couple of decades ago!
Then again, this is yet another area where the shrinking globe has opened up new avenues for starting up a business. Picking a leaf out of what is happening globally and seeing a growing demand for products, especially for children, many businesses have now begun to tap this market. Here, we speak not only of large retail networks, but even newcomers who have the opportunity to become big if they offer a service or a product much in demand, so long as the quality and pricing are right.
Catching them young
The opportunity that this sector offers is aplenty. Be it baby products, books, furniture or clothes, one just needs to be able to identify and fill the demand supply gap that is present in this space. Supam Maheshwari, chief-executive officer (CEO), Pune-based Firstcry.com, travelled frequently to the U.S. and Europe in the early 2000s, when he was running Brainvisa, an educational content provider to these markets. He used to bring back a lot of products for his daughter as they were not available locally. When he exited Brainvisa in 2007, despite continuing to be a part of the organisation, the need to do something on his own led him to address the demand-supply gap in the domestic market for children-focused brands, including some international brands. He along with Amitava Saha co-founded Firstcry.com, a company that offers baby products from diaper pins to strollers, in 2010.
At the other end of the spectrum is New Delhi-based Iandmystory.com. The company offers a niche solution that is an answer to every child’s deepest desire to be the hero of a book. Says Rajiv Aggarwal, founder, Iandmystory.com, “This concept is well-known in Europe and the U.S., but new to India. I wanted to import these to India, but the cost was forbidding.” Therefore, he set up the company Virtual Stores in 2009, in partnership with Vienna’s AIV Ventures to create stories that are set in the Indian ethos and enable Indian parents to order books with their children as the protagonists.
A sales and marketing person from the banking industry, Bengaluru-based Neelu Jain Trasanna found a vacuum in children’s furniture. After a year’s research, she started an outlet – Child Space – in 2005, specialising in children’s furniture. For Mumbai-based Vividha Fashions (Vividha), international demand for its products opened up new avenues to sell children’s furnishings locally. Veena Deepak, CEO, Vividha Fashions, started exporting fabrics to a U.K.-based company by chance, when she helped an English lady at a local fabric store shop for her new venture in 2002. “I kept growing Vividha to suit their needs and then started with orders for other clients abroad too,” she says. Vividha was into only exports till 2006, after which it started its first retail store in Hiranandani Gardens, Mumbai and launched its retail brand in its current format in June 2008.
One of the keys to the success of businesses like these is the range available. Firstcry.com, for instance, offers baby products from diaper pins to strollers, and in the last few months since inception, it offers 5,500 SKUs (stock keeping units) and has tied up with 150 brands, including several global brands. As a result, the portal has customers from across the country and has tied up with suppliers and logistics companies for quick turnarounds. “The supply side is a continuous battle and we get stocked out quickly,” says Maheshwari while commenting on the high demand in the market.
Iandmystory.com also has multiple story themes available. Written by established authors associated with Scholastic Books, it allows a parent, relative or friend to select from a number of stories, provide the names of the child and his or her friends to replace the characters in the book and place an order. Priced at Rs. 390, the book with the child and his friends as protagonists will be delivered at ones doorstep. Personalised DVDs, puzzles and learning packs are also available on the website.
At Vividha, the learning from exports – of safety and quality – is taken and the furnishing colours and themes changed to better suit the Indian palate. Images familiar from the India ethos – like an auto rickshaw instead of a dump truck, a Jataka story instead of a cartoon– are introduced in relevant places to give a closer sense of identity.
Vividha designs, manufactures and retails products and solutions in five categories: furniture, furnishings, play, education and décor for kids. And the fact that the market is ripe for growth is evident from the company’s plan to add apparels to its kitty this financial year and school activity and learning centres in fiscal year 2013-14.
Trasanna has tied up with five manufacturers in China and the years of nurturing this relationship now enables her to introduce variations based on individual requirements. Having also gained experience with clients from across the country, she now plans to expand and is oscillating between the franchise route and the shop-in-shop model. “Because a lot of it is personalised, the partner will also have to be able to provide our level of customer service to make this a success,” she points out. She believes that there is a great demand, and she would not like to miss the opportunity to expand to meet this demand.
Deepak found that while children’s spaces is a mature market in the western world, here, the concept is still in its infancy. While there are parents who are aware and willing to invest in products that are meant for children, there are parents who maybe willing, but are hesitant from the point of view of its life and relevance as the child grows up. To overcome this, Trasanna offers furniture in standard sizes so it can be used right into adulthood.
As Deepak rightly puts it, “Parents still believe that children will grow up in adult surroundings as they are too young to know the difference!” She, however, believes that children who have been given a space of their own, grow up to be much more confident and comfortable individuals.
That said, there is a market that is evolving and many entrepreneurs have already carved a niche through customising it to suit individual needs. Proof of this growth lies in the numbers – Iandmystory.com has seen a growth of 20-25 per cent in the last two years and Aggarwal is positive of higher market potential going forward. Apart from it being a good return gift option for parents, the company is also trying to spread awareness through social media, print and electronic media. It is also in the process of tying up with a radio station and a leading electronics products company for cross promotions.
Deepak says that selling within India is like selling to 100 different countries as apart from differing tastes, tax structures and requirements also vary from place to place. And as every business in this segment is unique, so are the challenges. For Deepak, it is explaining the products and concept to clients who are reluctant to spend due to the perceived notion of the value of the products meant for children, especially if it is made of fabric. For Maheshwari, the challenge is to stay focused on the variety of products, periodic stocking, good backend systems and robust, scalable technology.
While baby products themselves have been around – baby clothes, nappies, bottles, toys and the like, the accent is now changing to expand the range and offer innovative products and solutions. Clearly, with exposure to international trends and improved purchasing power – along with stress on keeping up with the times – this market is poised to grow.
Opportunity in brief
I recently read this book titled The Long Tail by Chris Anderson, the editor of Wired. The book proposes a very interesting theory: our economy and culture is shifting from mass markets to millions of niches. It talks about a new phenomenon in the retail industry where in addition to selling few products in extremely large quantities, the book argues that millions of niche products can be sold in small quantities. The online retail model coupled with reduced manufacturing and product costs allows this happen.
In the U.S. market, one area where this theory already seems to be working is the baby products space. In addition to selling large quantities of products like branded diapers, retailers, especially online ones, are selling niche baby products in sizable quantities. I believe there is potential for something similar to happen in India where several niche brands – across children’s furniture, books, pre-schools and toys – can co-exist and still be profitable for brand owners.