Wednesday 30 March 2016

The next hot product category in online retail – Baby care products?

We all agree that selling online is a great opportunity for entrepreneurs. While apparel, groceries, books, electronic gadgets, jewellery, and personal care products are on top of the list of online sales, there are other lucrative areas as well.
One such is the sale of baby care products. A higher rate of disposable income added to increased exposure through different media has contributed to a growth in the purchase of baby care products. In some cases, companies are also ripping off new parents by selling them products their babies don’t need, including wigs and convertible changing tables.

High demand for baby care products

The population of the country is going up with the majority being under the age of 35. This invariably has resulted in a baby boom. Therefore, the market for selling baby products is huge and selling baby care products online has immense potential.
Most parents are increasingly turning to virtual stores for their regular purchases.
Rimpa Chakraborty Guha, mother of a two year old, says, “I have bought my daughter’s pram, diaper bag, and hot flask online. I buy her diapers and wipes online as I get them at reasonable rates.” Rimpa, who shops for baby products on Amazon adds, “I buy baby wash and books when there is a sale.”
She does not buy baby food online, as she doesn’t want to risk it.
Studies have also shown that the market is only set to grow. According to this ResearchMoz study, the baby care market in India is looking at a growth rate of 17% in the period between 2015 and 2019. Thanks to a growing rate of middle class, and greater income, Indians are more open to spending. The top categories of products are apparel, diapers, baby food, and toys.

Leading baby product brands

Some of the top names in the arena include:
  • Chicco – Pronounced as ‘kee-ko’, this brand has been around for nearly 50 years. It has a dedicated site for Indian shoppers. It is quite popular among parents. The company sells baby products, thermometers, needles and syringes. Their products include car strollers, high chairs, bottles, baby care products including body washes and creams, pacifiers, teethers, clothes and toys. Chicco appears to be a popular choice of the niche market.
  • Babyoye – An Indian online store for buying baby products, Babyoye stocks products from different brands including Fisher-Price, Nestle, Himalaya, Johnson and Johnson, Pampers, Pigeon and Mee Mee, Mom and Me, Oye and Snuggles. Babyoye offers COD, credit and debit card payments, and net banking. Free delivery is offered on orders over Rs. 500. Apart from baby products, the store also offers the things a mother to be would need including maternity clothes, pillows, dietary supplements and skin and hair care products.
The Mahindra subsidiary does not limit itself to babies, but moves on to books and nursery products as well. While there are a few parents who complain that the physical store charges much higher than the online store, shoppers at Babyoye seem to be a content lot.
  • FirstCry – This online store lives it up king size. With thespian Amitabh Bacchan as its brand ambassador, and Ratan Tata investing in the company,FirstCry has its path cut out. The online store stocks brands like Funskool, Pigeon, Huggies, Johnson and Johnson, Mee Mee, Hotwheels, Mattel, Barbie, Pampers and Nuby, among others.
Products include diapers, toys, clothes, footwear, skin care products, furniture and nursery items. The company provides free shipping and COD. It also has a mobile app. FirstCry has raised nearly $69 million from Vertex Ventures, IDG Ventures India, Valiant Capital, SAIF Partners, and NEA.
However, it appears as though the company needs to sort out its customer support and delivery. Many shoppers have complained about the lackadaisical attitude of the delivery and support. Delayed delivery, no response to either emails or Facebook posts, and multiple follow ups going nowhere are some of the complaints shoppers have. FirstCry clearly needs to relook its blind spots and deal with them.

Show stoppers

Selling child care products come with its share of worries; primarily the fact that the window is very brief. The time that a child spends in diapers and using sippy cups, teething toys and walkers is short as most children outgrow these needs in two to three years.
A Nielson study points out that despite these limitations, the possibilities are huge. Liz Buchanan director of Global Professional Services at Nielsen says, “Consumers are deeply invested in these categories, and they are highly discriminating about the products they buy for their children. However, to achieve a competitive advantage in a space dominated by only a few major brands, a deep understanding of what’s driving product choice is critical.”
The absence of a systematic regulation is also a road block. In some cases, traditional child care methods play spoilsport. Parents are content with tried and tested ideas like ragi for baby food, and homemade cloth diapers.
Janice Sharavana who heads the sales and delivery teams at HealthBazaar, a company that sells toys online feels that customers tend to order based on the pictures they see on the marketplaces, which may not always match with the original product.
“When buyers are unhappy with what they have got, they give negative ratings to sellers. We sell only top brands like Chicco and Mee Mee, and the negative comments affect our ratings. I would suggest that buyers check the image at the brand’s site to get a clearer idea of what the product looks like.”
Online shoppers also tend to steal or damage the product before they return it, making it of no value to the seller.
“Some buyers return only part of a package or it comes damaged. Flipkart does not allow sellers to reach buyers directly, so they contact the buyers who deny any misdemeanour.”
With only 50% of the amount returned, and the product rendered unsalable, the sellers are left with no options.
“We have a lot of happy customers, who keep us going,” says Janice on a hopeful note.

What are the products flying off virtual shelves?

Nielsen predicts good things for ecommerce in Asia for baby products. The reportshows that toys and clothes are the highest selling products online. 38% of respondents in the study’s survey have bought toys, and 34% have bought clothes, 23% have bought diapers, and 17% baby food.
In the APAC region, 31% have bought diapers, and one fourth of the respondents have bought baby food.

How to get your cash registers ringing

The following will help boost online sales:
  • Mobile – Nielsen suggests introducing apps and mobile friendly sites to keep pace with the increasing use of smartphones in India.
  • Simple process – Keep the shopping and checkout process minimal to prevent shoppers from getting fed up.
  • Increased payment options – Include COD and mobile wallets among payment options as the shopper need not always have a bank account.
  • Multiple delivery choices – The study quotes Amazon’s tie-ups with local stores. Flipkart has also tied up with Apollo Pharmacy to act as a pick-up point. Rather than stick to the usual logistics options, think out of the box to come up with quicker delivery options.
Selling baby care products online is doubtlessly a lucrative area. Sellers need to keep in mind the sensitivity of the market, and ensure that they are extremely careful about the products’ sources. While exercising due diligence is a given in selling anything, child care is a particularly sensitive area, and sellers cannot afford any lapse.

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