Baby care products industry to see a significant growth in India by 2014

17 August, 2012

Despite slowdown, baby care products in India would continue to grow at a compound annual growth rate (CAGR) of over 20% and are expected to reach Rs. 4,200 crore by 2014 as against the current size of Rs. 3,000 crore including baby food, skin care, toiletries/ diapers, baby soap, oils, shampoo and creams.

FACTORS THAT have fueled the industry’s growth are rising income levels, fewer children per household and increasing aspiration levels among parents to provide the best to their children, says an industry specific analysis titled “Rising Demand of Baby Care products in India” carried out by Industry body Associated Chambers of Commerce and Industry of India (Assocham).

“Baby care market in India has experienced stupendous growth over the past few years due to changing consumer mindset and increasing penetration of baby care products. Others reasons are rising income level, better product availability and increasing awareness have significantly transformed the baby care products industry,” said DS Rawat, Assocham's Secretary General.

The report says that India has emerged as the most preferred market for the companies involved in baby care product manufacturing and marketing. The growing segment of population in the age group of 0-4 years has been providing tremendous opportunities as compared to any other baby product market worldwide.

“The market consists of baby hair and skin care products, toiletries and diapers. The hair care market for babies is valued at Rs 40 crore for 2012, and is growing at a CAGR of 5 per cent. The skin care market is valued at Rs 400 crore for 2012 and is growing at a CAGR of 15 per cent. The baby toiletries market is estimated at Rs 380 crore for 2012 and is also growing at 20 per cent annually”, mentioned the paper.

The report further mentioned that the estimated online market for baby products around Rs 200-250 crore range and tends to double within a year. It also said that around 30 million babies are born every year in India. Considering that even if 10-15 percent of babies are born to parents who would spend annually a conservative figure of Rs. 6,000 to 8,000 on baby products, the potential is huge.

The survey is based on responses from 2,000 representatives from joint and nuclear families because many consumers in metros lead time-pressured lifestyles and have less time available as a result of which demand remains high for these products.

The survey shows that over 82% working couples prefer these products as changing lifestyle, comfort factor and quality standards are becoming priority while deciding for the baby care products in cities like Delhi, Mumbai, Kolkata, Ahmedabad, Chennai, Bangalore, Hyderabad etc.

The survey highlights that baby foods are preferred mainly by nuclear families where both husband and wife are working who do not have time, patience or the expertise to prepare the food in traditional way.

As per the ASSOCHAM findings, India has the highest birth rate among the BRIC nations and countries such as the US and the UK. The per capita expenditure on baby personal care products is the lowest and the projected growth rate the highest.