Baby Care Market in India is highly fragmented and unorganised in the apparel, toys and accessories segment. But due to the ethical nature of the segments like food, skin and hair care these segments are dominated by organised players. The low penetration of the baby care sectors and less number of organised players in the baby retailing segment which contributes nearly 93% of the sector’s revenue it can be said that the sector is in a very nascent stage and it is likely to enter growth stage with the change in consumer habits of the Indian population. The industry is facing a myriad of problems like scarcity of raw materials and preference of people to cheaper substitutes. The industry is expectant of registering a remarkable growth on the account of increasing baby population in India, increase in disposable income of parents, change in consumer habits of parents and frugal innovation done to reduce the cost of various baby care products in the Indian market. The sector can further increase its growth rate by increasing the penetration of the baby care products in the rural market with better distribution network.
Indian baby care market is poised to grow at the rate of 13.66% CAGR over the coming years. Many of the leading players in this sector have made an ambitious projection of the sector growing faster than the 15% on the account of increased spending per child in India which is expected to increase from INR 6917 to INR 14079 at the rate of 12.57% CAGR even though the number of babies in the age group of 0-5 years is going to increase from 127 million to 135 million by 2020. This growth rate is also backed by the boom in the e commerce sector which is going to be a major shopping platform for the parents who do bulk shopping of baby care products and for those parents who are very busy with their work and consider baby care products to be a burden on their strict schedule. Many international players are entering the lucrative Indian baby care market but the companies are either entering through a JV or they are outsourcing their manufacturing to the local manufacturers to reduce the cost of manufacturing. The entry of foreign players will result in transfer of technology regarding the design of toys, apparel and accessories to the Indian companies.
However there are many key pain areas for the sector like scarcity of the raw materials for the companies in the baby toiletries market and baby food market. The baby toy market is facing the problem of lack of design institute which can provide them with innovative designs to compete with the international players. The Indian baby gear and apparel segment is also facing a threat from the flooding of the Chinese products in the Indian market. The government has no support system for the baby care industry. The earlier food parks which were run by state and central government are now defunct and government is trying to create an environment for the food industry which is going to affect the baby food market. The unorganised players are facing a problem of entering the market due to problem of procuring the license to manufacture and getting clearances from the standard associations
In spite of these difficulties and problems the sector is facing the sector looks stable and promising with a very high growth prospect in the near future with the change in habits of the consumer base.
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