Costs and benefits of a new entry in the Kidswear

industry
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The streets of the metro and non-metro cities present an amazing display of apparel for the kids. No
longer is the kidswear industry a childs play. It has come to assume a competitive position among the
mens and womens apparel industries. It is almost a quarter of the whole apparel industry in India.
Newer styles take no time to rush to the kid customers. Yes the kid customers. Now the kids have their
own preferences and shopping favourites and this means no kidding for the parents. Kids are
becoming more aware of the fashion sense through active promotional measures by the apparel
companies. Kidswear fashion market is now viewed as an equal to adults fashion market. They are
getting to choose from an apparel range which is even more exhaustive than the adults. Indian kids are
pioneering this phenomenon and they are choosing their own clothing and fashion styles.
This can be described as a sort of evolution of todays children because now they dont just buy what is
selected by their parents. They have become their own masters and have become independent
customers of apparel companies. Most significant reasons for growth in the kidswear market are the
increase in disposable income of parents, double income of both the parents and less number of kids
in a family compared to earlier.
Also, the popularity of any fashion concept no longer remains within the fringes of a particular sector or
region. Fashion in kidswear is becoming universal. This can be attributed to the growth and penetration
of cable television, internet advertising, outdoor advertising and other media propagated promotions.
No fashion can be contained only to the bigger cities in these times, it flows rapidly and adapts to the
smaller cities and towns as well. A prominent reason for such a growth in kidswear market is the
increased expectations of young children as apparel customers as they demand the products that
represent their own style statement.
In the following sections of this report, I will reflect on the feasibility of our new kidswear clothing store
named- PLAY. In the business concept statement I will test the projects viability as a potential
business idea that will serve as a one-stop shop exclusively for our little customers (aged between 0-14
years) in the city of Gurgaon, India. PLAY will offer its young customers the youth-oriented
fashionable apparel that is popular in larger urban areas such as Delhi, Kolkata, Mumbai, etc. PLAY
will be a clothing store exclusively for the young customers (0-14 years of age).

Why PLAY?
My new business venture is a clothing store exclusively dedicated to the kids fashion. The idea comes
from the growth of Indian kidswear market. The young generation kids have undergone a
metamorphosis from passive to active decision makers in cloth purchasing and the parents have been
influenced by the kids thus there has occurred a shift of purchasing decision choice from parents to the
children. However I do not wish to compete along with national and international apparel brands,
instead generating a new market of kidswear that is stylish yet affordable. PLAY will hire local
talented designers and utilize their skills to develop excellent fashion concepts for kids. Indian apparel
industry in the kidswear segment offers a potential opportunity for the business where untapped
potential can be harnessed by formulating effective market penetration strategies. By targeting the right
young and fashion conscious customers the business can derive value. Kidswear market has become
a component of lifestyle that todays kids are open to. Though a lot of emphasis is already been placed
on the renowned brands, PLAY will serve a market in an affordable manner but still maintaining quality
of products and develop its market slowly but surely.

Objective of PLAYs Feasibility study

To study the potential of the prospective kidswear store and to judge the acceptance levels of kids and
their parents towards our store.
To assess the viability of the idea of involving local designers into the manufacturing chain of PLAY in
order to keep the direct costs low.
To conduct a research to analyse the costs and benefits of PLAY.
To thoroughly and intensively research the kidswear industry/market conditions and find out what is
favourable and unfavourable for the kidswear store.
To gain initial pre-launch feedback from the target market in order to ascertain stores chances of
success in the backdrop of competition from bigger but expensive kidswear brands.

PLAYs range of kidswear products

The following list is a reflection of PLAYs product offerings for young kids in the fashionable apparel
sector.
T-shirts
Sleeveless t-shirts
Half sleeve and Full sleeve Shirts
Skirts
Tops
Minis
Blouses
Capris
Spaghetti tops
Trousers
Chinos
Jeans
Shorts
Pyjamas
Jumpers
Sweaters
Cardigans
Coats
Jackets
Shoes

Sandals
Bags
Belts
Caps
Hats

Characteristics of Kidswear Markets

PLAYs range of fashion clothing for kids will be classified under the following categories:
Infants (0 - 6 months)
Toddlers (7 months - 2 years)
Kids (3 - 8 Years)
Pre-teens (9 - 14 Years)
It is worthy to notice that in India childrens wear market is affected on a seasonal basis. Sales for
kidswear are recorded to be highest in the period of August and September each year. In India, the
average expenditure of a middle class and upper middle class family on kidswear is roughly Rs. 4,000
per year. Most number of purchases are made in the range of Rs. 1001 and Rs. 2000 and also Rs.
2001 and Rs. 5000 with the respective figures of 33% and 39%. Beyond the range of Rs. 10,000, there
are only 4% of recorded purchases.
According to Cygnus Consulting report on Indias kidswear industry, it is among the top ten growing
markets in India, recording a growth of 6-7% on an annual basis. By 2012, Indian kidswear market is
expected to touch 131.5 billion US dollars. This has been facilitated by the increased exposure of kids
apparel market to international brands including Adams Kids, Benetton, Pepe, Lee Kids and Tommy
Hilfiger. The market is huge and the opportunities are not scarce. With our genuine attempt to deliver
quality fashion apparel at affordable prices, we will be on our way to becoming a valued business within
3-4 years of operation.

Industry/Market Feasibility
Kids fashion apparel is one of the fastest growing segments in the apparel retailing market. More and
more manufacturers and retailers are coming up with innovative ideas in designing, merchandizing and
retailing the kidswear products to attract the target market effectively. The garments industry in India is
largely unorganized and scattered. In fact kidswear segment is most heavily fragmented compared to
men and women apparel segment. The kidswear market is made up of small and large manufacturers
and retailers. There is a scope for PLAY to introduce itself as an exclusive apparel store for the kids
and get established in the market. It attempts to function as an organized business with plans to
expand under the same brand name in future. Since there is no pattern in the large part of kidswear
segment, it presents the store with an attractive opportunity to position itself as a one-stop shop for kids
fashion apparel at reasonable prices. With customers preferences becoming more distinct and stylish,
PLAY will serve those demands. An interesting feature of kids clothing is that around 86% kidswear is
made up of cotton.
The branded kidswear market in India is still in its initial stages with just few national and international
manufacturers and retailers operating in the industry. The industry analysis assumes the branded
kidswear market size to be valued at approximately 1,000 Crore. The major national kids fashion wear
brands include Gini & Jony, Allen Solly, Lil Tomatoes, Weekender Kids, Ruff Kids, Ruff Baby, Planet
Kids and Zapp. Reports from India Apparel Industry assume that kids wear market in the branded

segment is growing at staggering 15% annual rate. International brands such as Adams Kids,
Benetton, Pepe, Lee Kids and Tommy Hilfiger have also eyes the growing Indian kidswear market.
According to the India Apparel Report (2008), the size of kidswear market is projected at Rs. 30, 510
Crore. The apparel industry experts forecast this figure to further grow and by the end of 2013, it will
reach Rs. 45,000 Crore. Majority of this growth will be due to the branded apparels. In the year 2005,
kidswear market share was 15%, which reached to 24.9% by 2008. This has been made possible due
to a large proportion of young kids in the Indian population. More than 30% of the total population is
below 15 years of age and the kidswear fashion is more highlighted in the urban India. Urban section of
kidswear market comprises approximately 60% of the total kidswear market. The growth experienced
in kidswear market is remarkably affected by this young population.
The presence of branded retailers in kidswear market is quite strong in the Tier I metro cities of India
where people are more affluent with high disposable incomes and are thus willing to spend higher
amounts on their childrens clothing. However the branded clothing for kids is also becoming famous in
the Tier-II and Tier-III cities as well. High incomes are leading customers towards branded kidswear.
PLAY will step in to derive advantage from this characteristic of kidswear market and extract benefits
by opening an exclusive kidswear shopping store.

Market segmentation
PLAY segments its target markets in the following categories:
Infants (0 - 6 months)
Toddlers (7 months - 2 years)
Kids (3 - 8 Years)
Pre-teens (9 - 14 Years)
Another important aspect of kidswear includes the uniform segment which is Rs. 1,14,500 million which
increased by 22.5% in 2007 over 2006. The kidswear has experienced a growth rate of around 35% in
the premium clothing, 21.5% in medium segment and 6.7% in mass clothing. There is also a need gap
in the kidswear market in the context of making available branded quality apparel merchandise for kids
in India.

Market share of the Major Apparel Segments (2007)

Total size Rs. 122, 400 Crore
Determinants of feasibility of our business venture
Market- The kids apparel market includes clothing for kids between 0 and 14 years of age. As of now,
the kidswear market is largely fragmented and unorganized with mostly local retailers. Kids wear
market comprises almost 25% of the total apparel retailing market.

Drivers of growthFavourable demographic pattern

Rise in discretionary income
Growth in organized retail
Changing fashion trends

Kids emerging as independent buyers

ChallengesRising prices of raw materials

Competition from the unorganized players
Import of cheaper machinery
Absence of global export subsidies

TrendsEntry of international players

Adult branded apparel makers entering the segment
Players tying up with the entertainment fraternity
Increase in private equity investments
Fashion designers focusing on kidswear
Competition- Most of the branded players present in the market are engaged in both manufacturing
and retailing.

Financial Analysis