Baby care market in India to grow at more than 10% until 2024

Indian baby care products market size is estimated to grow at a CAGR of 10.1 per cent during the period 2018-24.

Definition / Scope
Market Overview
Key Metrics
Market Risks
Top Market Opportunities
Market Drivers
Industry Challenges
Technology Trends
Regulatory Trends
Other Key Market Trends
Market Size and Forecast
Market Outlook
Distribution Chain Analysis
Competitive Landscape
Competitive Factors
Key Market Players
Strategic Conclusion
References
Appendix

Definition / Scope

Baby care products refer to the products that are essential for taking care of the infants between 0 to 4 years of age. The products mainly include hair care, skin care, diapers, baby food, toys, apparels, footwear, etc. The different segments of baby care products are as follows:

Baby Skin Care

Baby Massage Oil, Talcum Powder, Cream, Body Lotions

Baby Hair Products

Baby Hair Oil, Baby Shampoo

Bathing Products

Soaps, Bath gel

Baby Toiletries

Diapers, Huggies, Wipes, Baby Perfumes

Baby Food & Beverages

Baby Food Cereals, Baby Milk Product, Bottled Baby Food, Pureed Baby Food and Other Baby Foods

Market Overview

The growing baby population is leading to higher demand for baby products in the country. India has a high birth rate of 19.3 births per 1000 in a year.
15 baby care products are sold every minute in India as per industry estimates.
India has about 20 per cent of the 0 to 4 years child population of the world.
Out of the total population, India has about 9 per cent of the population in the age group of 0 to 4 years of age.
Working mothers, aggressive marketing, increasing disposable income, and urbanization is causing shift in consumer behavior allowing mothers to use baby care products.

Market Risks

Baby care industry is fiercely competitive with new entrants including large FMCG companies like Hindustan Unilever Ltd., Dabur and Patanjali in the segment. The industry is expected to be highly competitive for existing top players like Johnson & Johnson. Johnson & Johnson dominates the market with 80 per cent share.
Baby care product such as diapers, walkers, teething toys are used for very short span, usually only till the age of two or three. The window for baby care products is very small, after which product is no longer required.
Indian households are used to traditional and homemade methods for rearing children. For example, home-made baby food like Ragi instead of Cerelac and homemade cloth diapers instead of ready-made diapers. It is a big challenge for baby care industry to make cultural shift and fight this traditional perceptions.

Top Market Opportunities

There is opportunity for organic products in baby care industry. Parents prefer to use baby products with as much less chemicals and preservatives. The quality of ingredients is one of factors mother prefer to buy products from overseas.
There is opportunity for baby care companies and online services to work together. Baby care brands can partner or collaborate with online forums and portals to understand the preference of parents for their children and cater their demands accordingly. Few start up companies like Tinystep, Babychakra and Parentune have launched online portals that provides information to parents on birth and early childhood.

Market Drivers

Increasing Birth Rate: India has the largest number of children in the world surpassing even China. India is home to close to 100 million of babies (0-4 years old).There is 27 million annual births and fertility rate of 2.72 children per woman in India. The increasing live births in India is driving the baby care market.
Increased Urbanization: Earlier Indian families used to live in joint family along with grandparents. In such families, using home-made food and products was common. But with rising urbanization and nuclear families, parents prefer to use ready to eat infant food and baby care products.
Working mother: Large numbers of women are entering into workforce in India. Women have started moving from only household works to managing jobs. Globally, the female labor participation rate has increased by 4.1 per cent over the last three decades. The joining of office has led women to give less time for caring their babies with their traditional methods. They look for instant baby care products.
Increased concern for Baby Care: Parents always want to give best to their babies, regardless of their wealth. These parents put quality ahead of price. This has created scope for popular brand in baby care market.

Industry Challenges

Indian baby care market is concentrated majorly in urban areas only. Even large cities like Mumbai, New Delhi, Bangalore, Kolkata are not fully penetrated when compared with other western countries.
If the baby care products are not used properly it may cause irritation, cuts, choking or even lead to death of babies. The quality and safety of baby care products is the most important for mothers and earning their trust is a big challenge for any company.
Baby products like wipes result in an annual waste of 1,200 tonnes of plastic, which is not bio-degradable completely.

Technology Trends

The internet accessibility is supporting the growth of baby products market as the penetration of 4G services is getting better every day. The urban internet penetration is over 65 per cent and rural internet penetration is over 20 per cent and growing. There are altogether 560 million internet users in India.
Baby care products are available on e-commerce platforms such as Amazon, Snapdeal and Flipkart. FirstCry.com is an online retailer that offers around 90,000 products and over 1,200 Indian and international brands such as Ben 10, Mattel, Funskool, Disney, Barbie, Medela, etc.

Regulatory Trends

Policies related to baby care market includes Infant Milk Substitutes, Infant Milk Substitutes Act (1992 & 2003), Feeding Bottles & Infant Foods Act, 1992 & 2003 and Bureau of Indian Standards.
The governing bodies related to baby care market includes Food Safety and Standards Authority of India, Association of Consumer Action on Safety and Health, Indian Council for Child Welfare, Indian Academy of Pediatrics and Indian Medical Association.

Other Key Market Trends

Patanjali has launched wide range of Ayurvedic baby care products under the brand name Shishu.
Himalaya Drug Company entered the personal grooming space with focus on baby care.
HUL launched Baby Dove range of baby products such as soap bars, lotions, wipes and diaper rash cream.
Dabur forayed into premium baby products with Dabur Baby massage oils.

Market Size and Forecast

The baby and toddler wear segment is worth US$ 882.3 million, baby and child specific products is US$ 302.1 million, baby food is US$ 627.3 million and nappies/diapers is US$ 689.6 million.
The baby care industry is worth US$ 2.5 billion.
Baby apparel accounts for the largest market share (35.3 per cent), followed by nappies/diapers (27.6 per cent), and baby food (25.1 per cent).

Market Outlook

Indian baby care products market size is estimated to grow at a CAGR of 10.1 per cent during the period 2018-24.
Baby hair care market is expected to grow at CAGR of 11.8 per cent, skin care by 15.3 per cent, bath care by 12.9 per cent, toiletries by 16.4 per cent, skin care by 15.3 per cent and toys by 24.9 per cent.

Distribution Chain Analysis

The different types of distribution channels are supermarket/hypermarket, retailers, online retailers, pharmacy stores, exclusive baby product outlets, etc. Supermarket/hypermarket accounts for the largest revenue share while online retailing is gaining momentum due to digitization and internet connectivity.

The share for baby care products online is about US$ 500 million. Major E-retailers such as Amazon, Flipkart, Babyoye, etc. have taken lead in the baby care segment.

Competitive Landscape

Baby care market in India is highly fragmented and unorganized in segments like apparel, toys and accessories. However, segments like food, skin and hair care are dominated by organized players.

Johnson and Johnson accounts for around 80 per cent of the share in terms of value while Nestle accounts for 85 per cent of the baby care food segment. P&G accounts for 90 per cent in diapers segment.

Competitive Factors

Customization, innovation, affordable pricing and quality are the product differentiators in baby care market in India. Quality of ingredients (65%), production function/effect (55%), value for money (50%) and no additives (50%) are the main reasons for mothers buying baby care products overseas.

Key Market Players

The key players of Indian baby care market are Johnson & Johnson, Kimberly Clark and P&G.

Johnson & Johnson leads in the skin/hair segment while Kimberly Clark and P&G leads in toiletries and diapers.
Baby food market is led by Nestle’s Cerelac, Nestum and Workhardt’s Farex.
Other players are Aditya Birla Group, Amul, Dabur, Emami, Himalaya, Marico, Mothercare, Wipro, etc.

The infant and baby apparel segment includes brands like Lifestyle, Lilliput, Kidswear, Toon Kidz, Gini & Jony, Lilstop, Mom & me. Top brands like Allen Solly, Arrow, Puma, Marks & Spencer, Woodland have also entered the branded kid apparel market.

Strategic Conclusion

Increase in birth rates, disposable income, working mothers, growth in online buyers and growing awareness about buying quality products are driving the baby care market in India.

There is huge scope for India’s baby care market. Retailers and manufacturers are constantly involved in product innovation in order to gain competitive advantage.

Appendix

CAGR – Compound Annual Growth Rate
CBR – Crude Birth Rate
FMCG – Fast Moving Consumer Goods
P&G – Procter & Gamble
TFR – Total Fertility Rate
US – US Dollar