Children’s wear market continues to grow
The top ten children's wear markets are growing at around 6-7% each year - and are expected to generate retail sales of US$131.5bn by 2012 according to new research from just-style. And in what will be good news for retailers and suppliers, opportunities still exist in several areas including designer wear, discount channels, licensed products and boy's wear.
The children's wear market is highly fragmented on a global scale, but its growth is being fuelled by two key trends according to a new report from just-style: retail development in emerging countries and increasing luxury sales in already-developed markets.
In emerging countries, not only do parents have more money to spend, but they also inherently want to spend money on their children. This gives retailers at all levels, from discount to luxury, the opportunity to expand into new geographical regions.
In already-developed markets, the luxury trend is also on the rise. This is a 'trickle-down' effect from growth in the luxury market for women's and men's wear, as well as other categories, like home décor.
According to the 'Global market review of children's wear - forecasts to 2012', the top ten global markets - the US, the UK, France, Germany, Spain, Italy, China, India, Russia and Japan - accounted for an estimated US$92.6bn in children's apparel retail sales.
By 2012, the same top ten markets are expected to account for an estimated US$131.5bn in children's apparel retail sales.
Few retailers and brands really dominate the industry in any one particular area says the report.
Specialty stores do well in the children's wear market, alongside global retailers, when they are focused on a particular niche within this apparel segment.
Global retailers, on the other hand, do not have the ability to serve smaller markets as easily and quickly as boutique retailers. Consumers expect boutique retailers to have more cutting-edge, exclusive offerings, while discounters will carry the basics, private label brands and low-end labels.
In the younger age categories of children's wear - the infant/toddler and preschool categories, in particular - general merchandise and supermarket chains dominate sales in nearly all markets.
Children grow quickly and are generally rough on clothing, so parents tend to look at apparel as being both disposable and functional, so stores offering a wide selection of fashionable offerings at low prices increasingly generate traffic.
And although style is important from the parents' perspective, higher-cost brands are generally reserved for special occasions.
Line extensions promise to succeed in the children's wear category, if well executed by the brand. This is due to the fact that parents tend to dress their children like themselves, and will seek to incorporate brands that fit with the family's lifestyle.
Often, the easiest choice for parents is to buy brands that they already know and love for themselves. For instance, Armani, Ralph Lauren, Gap, Diesel and many more popular labels are extending into this segment.
The biggest retail markets are those in which fashion for adults is most developed, such as France, the UK and the US. Emerging global powerhouse markets like China and India hold promise for children's wear, because of the sheer size of the retail industry, as well as the growing number of wealthy people.
Children's wear is also affected by seasonality. The highest sales come in August and September, just when school is beginning in most countries.
The US market currently spends a greater amount per capita on children's wear than any other market in the world. Per capita spending in the US is double that of Western Europe and 40 times greater than that of the Asia-Pacific region.
The European children's wear market is estimated to reach around US$146bn by year-end 2007, according to estimates. By 2012, the industry will have grown an estimated 15% to reach US$168bn.
Globally, the tweens market is ripe with opportunity. This group loves fashion and tends to have money to spend. In emerging markets, like India and China, tweens (from nine- to 14-years-old) love Western-inspired brands from Europe and the US, and they are willing to pay more for them.
The market for girl's wear is far greater than boy's wear throughout the world. Boy's apparel tends to centre on basics, with few designers capitalising on fashion-forward moms willing to spend money on their sons' clothing. Girl's wear, however, thrives in all channels from specialty stores to department stores to discounters.
There are also opportunities in several areas including designer wear, discount channels, licensed products, boy's wear and more. Brands can easily extend their lines into these arenas and, most importantly, many parents are eager for more style options in all of these categories.
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