Baby care segment online suyash tripathi

Author:SuyashTripathi
October2014
Analysis on Baby Care Market
and Online Retail Segment
Author : Suyash Tripathi
October 2014

October2014 Content
 India – Macroeconomic Factors
 Indian E-Commerce Sector Overview
 Indian Baby Care Products Market and Market Categorization
 Overview of Maternity Care and Baby Care Products Market by product type
 Indian Online Baby Care Products Market
 Sourcing (Online Portals)
 Market Analysis
 Known Names
 The Baby Care online market is growing
 But there is a long way to go
 Looking forward, while looking around, for all factors
 Observations & Suggestions

October2014 India – Macroeconomic Factors
• In the near future India will be the largest individual contributor to the global demographic transition
• India’s young and burgeoning working age population is a competitive edge that sets Asia’s third largest economy apart from other
countries across the world
• Its workforce, those between 15 and 64, is expected to rise from almost 64 percent of its population in 2009 to 67 percent in 2020.
Meanwhile, China's is expected to start declining from 2014 resulting in a labor shortfall by 2050
• India’s long term growth relies on two factors: demographics and rising wealth. Its population of 1.2billion will reach 1.7billion in
2050
India’s Demographic
Dividend

October2014 India – Macroeconomic Factors
• Its population of 1.2billion will reach 1.7billion in 2050India’s per capita income has risen to INR 5,729 per month in FY’2013 from
INR 2,200 per month in FY’2001, recording a CAGR of 8.3% during the period.
• There are 50 Million babies in the age group of 0-2 years and 304.8 Million children are in the age group of 0-12 years
• The spending power of Y generation who spend a considerable proportion of their income on discretionary items, constitute a large
part of maternity and baby care products’ consumer base in the country.
• The western countries are struggling to overcome from the declining birth rates and the baby care industry has reached a saturation
point in these countries.
• India has 25% more baby population when compared to China, thus highlighting the massive growth potential in baby care industry
in India
• Product innovation and development, deeper penetration in urban and rural areas and key focus on individual baby care product
segments shall remain focal point of growth for existing and potential new players in this industry in the coming few years
India’s Demographic
Dividend
GDP Growth Rate of India and other major economies

October2014
E-Commerce Industry
Segmentation
B2CC2C B2B
• Online Classifieds
• Online Retail
• Online Travel
• Online retail
15 24 38
58
91
139
224
334
504
2008 2009 2010 2011 2012 2013 2014 2015 2016
CAGR ~56%
Rs Billions
Online retail market size and growth (INR Billion)
Indian E-Commerce Sector Overview

October2014 Indian Baby Care Products Market
0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0
2008
2009
2010
2011
2012
2013P
Thousands
India Baby Care Products Industry Market Size on
Basis of revenue in percentage, 2008-2013
Market Overview
The market has grown from INR 34,564.8 Million
in 2008 to INR 60,333.9 Million in 2013
Registered a CAGR of 11.8% during 2008-2013
Including apparels, Baby and child-specific
products sees value growth of 13% to reach INR
8.8 billion in 2013
Average unit price of baby and child-specific
products continues to increase in 2013
Johnson & Johnson (India) Ltd continues to
dominate with 73% value share in 2013 among
the CG peers
Baby and child-specific products is expected to
grow by a value CAGR of 2% at constant 2013
prices over the forecast period to reach INR9.5
billion by 2018
Highest demand is for baby food & toiletries

October2014 Indian Baby Care Products Market
80.71% 79.90% 79.46% 78.65% 77.62% 76.73%
6.17%
6.38% 6.52%
7.03%
7.69%
7.92%
6.00% 6.17% 6.43% 6.69% 6.96% 7.33%
4.04% 4.39% 4.32% 4.24% 4.18% 4.24%
2.11% 2.25% 2.43% 2.60% 2.81% 3.06%
0.96% 0.91% 0.84% 0.78% 0.74% 0.72%
75.00%
80.00%
85.00%
90.00%
95.00%
100.00%
2008 2009 2010 2011 2012 2013P
Revenue Story - Indian Baby Care Product Segemention by Product Categories
Hair Care
Convenience
Products
Bath Care
Toiletries
Skin Care
Baby Food
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
2008 2009 2010 2011 2012 2013P
Hundreds
India Baby Care Products Industry Market Size Revenue (INR Hundred Millions)
Growth factors:
Changing attitude of working
mothers towards baby care drives
growth
Population of 0-4 years is growing,
providing tremendous opportunities
Demand driven by working couples ,
owing to their changing lifestyles
and convenience, and ‘no
compromise’ attitude towards
quality
Metropolitan cities see large
spending due to dynamic, time
pressured lifestyles and increasing
disposable incomes

October2014 Baby Care Products Market Categorization
• Indian Maternity & Baby Care Market ~INR 710 Million (USD 11.12 Bn)
• India Toy Industry is estimated to be growing at a CAGR of ~20%, catering to about 40 million kids across the country
• 50 Million babies in the age group of 0-2 years
• 304.8 Million children are in the age group of 0-12 years
• Change in spending pattern of the parents due to high disposable income and change in lifestyle
• Increase in proportion of working women
• The major product categories include:
• Baby Food
• Skin Care
• Toiletries
• Bath Care
• Convenience Products
• Hair Care
• Maternity Products are overlaps with the Baby Care as well as Mother Care category.

October2014 Maternity Care Category
Maternity
Apparels
91%
Pillows &
Cushions
5%
Books & CDs
3%Others
1%
Segmentation by Product Category
5323.6
5943.5
7070.3
8451.9
9897
11,184.40
0.00
2,000.00
4,000.00
6,000.00
8,000.00
10,000.00
12,000.00
2008 2009 2010 2011 2012 2013
Matrnity Care Products Market Size on Basis of Revenue in INR
Million, 2008-2013Key Points
• Alongwith quality of life for the baby, the new generation is also
beginning to understand and spend on quality life for expecting
mother
• Preference of Indian consumers is from low quality–low price to
‘value for money’ and superior quality goods in the domestic
market
• New age maternity benefits from employers
• Grew from INR 5,328.6 million in 2008 to INR 11,184.4 million in
2013
• Recorded a CAGR of 16.0% from 2008-2013
• A tremendous growth of nearly 19.0% from 2009-2010
• Few prominent BM retailers are enjoying a major share -
Mothercare, Mom & Me, Nine etc
• Majorly divided into Maternity Apparels, Pillows and Cushions,
Books and CD’s, Creams &Lotions, Maternity Belts etc
Growth obstacles
• Unorganised sector working population has no access to
maternity benefits
• Concentrated in Tier-I Cities
• Low penetration in Tier – II Cities
Growth Drivers
• Expected to remain niche segment, but huge growth potential
• Market majorly driven by mothers/women between 24-49 years
• Women are becoming more fashion and quality conscious
• The products are now spreading through all channels – special
retail stores, MBOs, E-Commerce
12.9708
14.9493
17.498
20.759
24.7863
0
5
10
15
20
25
30
2014 2015 2016 2017 2018
Thousands
Indian Maternity Products Market Future Projections (INR
Millions)

October2014 Baby Food Category
27898.4
30699.4
33965.9
37759.8
42068.2
46291.9
25000
30000
35000
40000
45000
50000
2008 2009 2010 2011 2012 2013P
Indian Baby Food Market Size on Basis of
Revenue in INR Million
Dried baby
Food
61%Infant Milk
Formula
37%
Speciality
Food
2%
Percentage contribution of different segments to the Baby
Food Category
Key Points
• Market size reached INR 46,291.9 Million in
2013, compared to 27, 898.4 Million in 2008
• Baby food industry saw a CAGR of 10.7% from
2008 - 2013
• Slow growth rate in 2009 and 2010
• Parents do not compromise on the spending on
babies’ nutrition diet
• Sale of high-end baby food products continued
to appreciate during recessionary periods also
Segments
• Dried baby food segment contributes to 61.3% of
total baby food market,
• Infant milk formula contributes 36.8%
• Prepared baby food - slowly establishing. Eg
Puree and Snacks.

October2014 Baby Food Category
13,890.50
16,267.20
18,936.60
21,815.00
25,000.00
28,375.00
10,000.00
15,000.00
20,000.00
25,000.00
30,000.00
2008 2009 2010 2011 2012 2013P
Indian Dried Baby Food Market Size on Basis of
Revenue in INR Million, 2008-2013
9,375.00
10,475.60
11,747.30
13,227.50
15,000.00
17,055.00
5,000
10,000
15,000
20,000
2008 2009 2010 2011 2012 2013P
Indian Infant Milk Formula Market Size on Basis of
Revenue in INR Million, 2008-2013
Growth Drivers
• Increasing Baby Nutrition awareness combined with
rising personal disposable income
• Rising of Working Women population - from 9% in
2011 to 14% in 2012. Inadequate time to breastfeed
babies, hence substitutes are welcomed
• Aggressive baby food awareness campaigns in rural
areas by companies
Key Points
• Tier I and Tier II cities are preferred locations for
product launches
• Baby Food products are affordable by only 1/4th of
population, hence pricing is a growth deterrent
• Dried Baby Food CAGR – 15.4% (2008-2013)
• Infant Milk Formula CAGR – 12.7% (2008-2013)

October2014 Baby Skin Care Market
2134
2450
2789
3376
4167.9
4777.7
0
1000
2000
3000
4000
5000
6000
2008 2009 2010 2011 2012 2013P
Baby skin care market size on the basis of revenue in INR
million 2008-13
1,151.70
1,281.40
1,447.50
1,728.50
2,083.90
2,350.60
500.00
583.30
688.90
850.80
1,075.30
1,261.30
482.30
585.30
652.60
796.70
1,008.60
1,165.70
2008 2009 2010 2011 2012 2013P
India Baby Skin Care Market Segementation - Revenue in
INR million 2008-13
Massage Oil Cream and Moisturizer Baby Powder
Key Points
•Baby Skin is extremely delicate and fragile,
hence a big issue of concern among parents
and caretakers
•Parents’ product buying decisions depend on
peers, family members, marketing initiatives
by product makers
•One of the fastest growing segment in baby
care products
•Market valued at INR 4,777.7 million in 2013,
in contrast to INR 2,134 million in 2008
•Massage oils – approx 50%, creams and
moisturizers – 25%
•CG players with largest share – J&J, Dabur,
Emami, Wipro, Himalaya, Doux

October2014 Baby Diaper Market
2072.8
2371.9
2749.3
3210.1
3772.2
4425.2
0 1000 2000 3000 4000 5000
2008
2009
2010
2011
2012
2013P
India Baby Diaper Market Size on the Basis of Revenue
in INR million 2008-13
Key Points
• Largest contributory segment after Baby Food
• Low penetration rate ~ 3%, due to low consumption
• Growth potential of ~99.5 Billion Units/year, among highest in
the world
Growth Obstacles
• Current purchasing power prohibits a large consumer base
• Cultural resistance to accept disposable diapers
• Consumers have a harder time in getting rid of things and
putting them in waste
Growth Drivers
• Rising disposable incomes of the households
• Increasing attention to baby’s health
• Surging population of babies in India.
• Increase in median age of expecting women ,as higher aged
parents are viewed as financially more stable and can afford
premium baby utility brands
• Changing lifestyle brands
• Mother’s going back early to work after delivery
Therefore…
• The segment demands more marketing efforts by diaper
companies than other regions
• Lower diaper prices can act as a major driver, and market
acquirer in this segment
• Online retailers like babyoye and firstcry buy in bulk, and pass on
the margins to the end consumers (Mothers), keeping the prices
lower and thereby drawing traffic and sales
99.5
75.7
22.4
2.5
12.1
22.3
0
20
40
60
80
100
120
India China US
India Baby Diaper Market Size Potential
Billion units/year Present Market potential
Billion Units/year Maximum market potential

October2014 Baby Bath Care Market
1396.3
1686
1847.2
2034.5
2263.1
2556.4
0
500
1000
1500
2000
2500
3000
2008 2009 2010 2011 2012 2013P
Baby Bath Care Market Size on the Basis of Revenue in
INR million 2008-13
2008 2009 2010 2011 2012 2013P
1354.40 1625.30 1777.00 1953.10 2152.20 2408.20
41.90 60.70 70.20 81.40 110.90 148.30
India Baby Bath Care Products Segmentation by Soaps and
Other on Basis of their Revenue in INR Million, 2008-13
Soaps Others
Key Points
•Category includes soaps, shower gels,
body wash, bubble bath foams and other
bathing additives such as bath oil
•Baby bath products except soap is
relatively low in India
•Valued at INR 2,556.4 million in 2013
•Segment has witnessed CAGR of 12.9%
over the period 2008-2013
•Growth Obstacles and Drivers are akin to
other categories
•This segment is witnessing a good growth
rate, but due to lower starting figures,
the penetration in market will take time

October2014 Baby Convenience Products Market
730.8
865.4
1036.6
1250.3
1523.2
1846.7
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2008 2009 2010 2011 2012 2013P
India Baby Convenience Product Market Size on the
Basis of Revenue in INR million 2008-13 SizeKey Points
•Another one of the fastest growing segments
•Grew in size from INR 730.8 million in 2008 to INR
1,846.7 million in 2013
•Witnessed a CAGR of 20.4% from 2008-2013
•Categories -
•Toys
•Baby Strollers
•Baby Cots
•Baby Furniture
•Car Seats
•Others (Baby Wipes, Feeding Bottles, Devices,
Health etc)
Growth Drivers
•Increasing population and consumerism
•Increasing count of dual income parents
•Increased spending on safe and branded
convenience products
•Easy accessibility to imported convenience
products
• Entry of international convenience product
manufacturers in the Indian market
• Increasing marketing spend of toy companies
Toys
43%
Baby Strollers
27%
Baby Cot
14%
Bay
Furniture
11%
Car Seat
3%
Others
2%
Percentage Contribution of Convenience category subsegments

October2014
Plush Toys
49%
Plastic Toys
39%
Electronic Toys
12%
India Toys Market Segmentation by Plush Toys, Plastic Toys and
Electronic Toys on Basis of their revenue Contribution %, 2012
Toys’ Sub-segment
• Convenience products is upheld by the baby toys segment
- toys’ contribution has increased from 25.7% in 2008 to
45.9% in 2013
• Toys’ market is pegged at INR 847.6 million in 2013,
recording a CAGR of approximately 24.9% during the
period, 2008-2013
• Caters to approximately 80 million babies in the age
group of 0-3
• 15% toys are made in India, rest imported
• Mostly unorganised and with no government support or
assistance
Hard Goods sub-segment
• Includes
• Baby stroller
• Baby cot
• Baby furniture
• Baby harness
• Baby car seats
• Baby stroller and baby cots - largest contributors with
market share of 26.4% and 13.8% respectively.
• Baby car seat and baby furniture are minuscule
contributors to this segment with a market share of 3.3%
and 11.1% respectively.
• Car seats are popular in Bangalore, as the IT crowd has
had exposure to the west
Toys
43%
Baby Strollers
27%
Baby Cot
14%
Bay
Furniture
11%
Car Seat
3%
Others
2%
Percentage Contribution of Convenience category subsegments
Baby Convenience Products Market

October2014 Baby Haircare Market
332.4
349
357
376.3
401.5
436
0
50
100
150
200
250
300
350
400
450
500
2008 2009 2010 2011 2012 2013P
India Baby Hair Care Market Size on the Basis of
Revenue in INR million 2008-13
Baby Shampoo
83%
Baby Hair Oil
12%
Baby
Conditioners
5%
India Baby Hair Care Products Sub-
segmentation by Revenue in INR Million,
2013
Key Points
•Smaller segment
•Low penetration in Rural and Urban areas
•Expected to grow at a CAGR of 11.8% from
2013-2018 as compared to moderate
growth of 5.6% during 2008-2013
Growth Drivers
•Marketing and advertising getting
aggressive
•Educated and vigilant parents
•Advent of shopping mall culture
•Increasing penetration of CG companies in
rural areas
Growth Obstacles
•Orthodox beliefs in traditional, homemade
oils
•Use of massage oil as hair oil
•Low sales of shampoo leads to lower sales
of other haircare products

October2014 Indian Online Baby Care Products Market
730.8
865.4
1036.6
1250.3
1523.2
1846.7
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2008 2009 2010 2011 2012 2013
India Online Baby Care Market Size, INR Million 2008-13
Excitement Ahead!
•Internet Penetration is rising
•Population growth is huge
•Ease of transactions is growing
•Last mile delivery methods are evolving are
improving
•Household incomes are rising
•Consumer attitude are changing
•The E-retail of baby Care in India is expected
to transpire as one of the world’s fastest
growing baby care markets
•Strategic product innovation and
development shall remain key focus areas
•Penetrating deep into urban areas, especially
rural areas shall remain the focal growth
point of these companies
•The online baby care products market was
valued at INR 605 million in 2008, growing to
INR 1,879.0 million in 2013
•CAGR of 25.4% for the review period, 2008-
2013!
•Toiletries – highest contribution (33.5%)
•Baby Apparels – second largest (32.3%)
Toiletries
33%
Baby Apparels
32%
Convenience
Products
21%Baby Food
4%
Skin
Care
4%
Bath
Care
2%
Hair Care
2%
Other
2%
Product Categories - Contribution Percentage to Online Retail of Baby
Care Products

Prominent League
•Firstcry.com
•Babyoye.com
•Hopscotch.com
•Redlily.com
•Flipkart.com
•Snapdeal.com
•Amazon.com
•Momandmeshop.in
•Healthkart.com
•Ebay.in
•Shopclues.com
•Sunbabyindia.com
•Kidloo.com
•Myntra.com (apparels)
•Littlesindia.com (Only
listing)
•In.pamper.com (Only
listing)
•Huggies.co.in (Only
listing)

Popular Brands in India
New Entrants in India

October2014 Sourcing (Online Portals)
Players Best Sellers Average Order Size/day
# of
Orders/day
Sourcing Methods
Babyoye.com Diapers, Clothes, Toys INR 2000-3000 500-5220
Sourcing from vendor
contracts and own
warehouse
Firstcry.com
Diapers - Huggies, Pampers,
Mamy Poko Pants
INR 500-1000 120-150
contracts and own
warehouse
Jabong.com Baby Apparels INR 1500-3000 50-100
contracts and jabong
partners
Momandmeshop.com
Baby rockers, Car Seats,
Baby Cots, Baby Swings
INR 3000 - 5000 100-110
contracts and Mom&Me
warehouse
LittlePipal
Baby Bed Sheets, Diaper
Bags, baby Bath Towels
INR 2000-3000
30-40 bulk
orders
contracts and own
warehouse

October2014 Market Analysis
What's Good
• Large scale of operations
• Product Innovations
• High standard quality
products at competitive
prices
• Increase in personal
disposable income
• Increase in dual income
parents
• 3
• Increased expenditure
on baby care products
• Expansive portfolio of
products
• Growing market
• Increasing awareness
towards baby care and
maternity products
quality
• Few online retailers in
this space
What’s Bad
• Low customer
concentration
especially in Tier III
cities such as Trichy
and rural areas.
• Low Research and
Development
investment
• Local manufactures
produce low quality
duplicate products
• Low awareness about
baby care products
• Short shelf life of baby
care products
• Low government
regulations on safety
and security
regulations on
products
• Low trust of
consumers in online
space
Optimistic view
• Preference of branded
baby care products
over local products
• Lack of domestic
players in the Indian
baby care industry
• Low competition from
cheaper substitutes
• Having strong brand
image and customer
loyalty helps
• Increasing internet and
ecommerce
penetration
• Population, internet
penetration and
conversion rates of
online purchase are
steadily increasing
• Working women have
less time, more
concern about their
babies and access to
technology - all factors
together
Deterrents
• Monopoly of CG players
such as J&J, P&G
• Highly unorganized
market with local players
• Strategic joint ventures
between big players such
as the partnership deal
between Kimberly Clark
and HUL
• Regulations by Govt IMS
Act 1992, prohibiting the
advertisement of baby
food products
• Rigid Societal norms
which is acting as a
deterrent to changing
consumer behavior
• s
• Customers in online
Baby Care are not loyal,
and repeat purchases
are seen in few
consumer goods only eg
Diapers, Shampoos etc

October2014 Known Names
• Founded in 2010, part of Pune based BrainBees Solution Pvt. Ltd.
• Round A+B funding of $18 Million;
• Round C of $15 Million by Vertex Venture Holdings and existing investors SAIF Partners and IDG Ventures
• 70000+ Items, 400+ Brands, 150+ Vendors
• Hybrid Model – Online+Offline presence : 70 stores in 21 States from 26 stores in 11 states in Aug 2013.
• Plan to reach 100 stores by end of 2014, 400 stores by end of 2017
• Ships 6000-10000 orders per day, Avg Ticket Size of Rs 1000.
• 30% viewers from Mobile, 25% Sales from Mobile
• Free of Cost ‘Next Day Delivery’ in 10-12 cities
• ‘Subscribe and Save’ – an unconventional Subscription model added in Aug 2013
• Target $250 Mn in 2015
• Positives -
o Early mover
o Big assortment range
o Hybrid model – scope for efficient operations
o The offline stores give way for easier omnichannel access , the current buzz in retail
o Healthy order size and ticket size
o Operations and Subscription model
o Innovative marketing ideas like ‘First Cry Boxes’ for the ‘Happiest Cry Ever’
• Negatives –
o Lack of marketing and sales initiatives
o The company seems to be in slow growth mode in online space

• Founded in 2012, brainchild of ex Diaper.com executives Rahul Anand and Lisa Kennedy
• Model – Flash Boutique Sales, International Brands, Pre-booking on flash sales
• Raised seed investment from unknown investors; received $2Million in Feb 2014 from Lionrock, Nisa Godrej, Skype co-founder Toivo Annus and
Diapers CTO Wei Yan
• 400 odd niche brands – domestic and international
• Premise – Access to modern Indian mom to international brands and products
• Store everything in Mumbai warehouse, ship and deliver within 2-5 business days
• Acquired school supplies e-tailer SkoolShop, in a stock and cash deal in May 2014
• Target revenue goal for 2014 is $3.5-4 million (Rs 25 crore)
• Price range – Rs 79 to Rs 15000.
• Average Ticket Size – Rs 1500 – Rs 2000.
• Positives –
o Flash Sales model – attractive for high ticket value customers
o Flash Sales models help in keeping inventory low, hence low carrying cost
o Chirpy UI on the website
o Pre-order – plus point in inventory and order management
o Big names associated with the venture
o Imported brands attract high value customers
• Negatives –
o Flash Sales – Missing a sale may spoil customer experience
o Category and product assortment is not streamlined
o Low marketing and sales initiatives
o Low funding

• Founded in 2010, by husband-wife duo of Sanjay Nadkarni and Arunima Singhdeo under Nest Childcare Services Pvt Ltd.
• Range of 4,000 products including Pampers diapers, Chicco food, Johnson’s skin care range and cycle-maker BSA’s prams and walkers. Babyoye.com
delivers to 20,000 cities and towns in India.
• Targeting about Rs 250 crore in revenue in two years – CY 2013 and 2014
• Undisclosed funding by actress Karishma Kapoor in Dec 2011; $2.5 Million from Accel Partners and Tiger Global in April 2011;
• Acquired hoopos in an all stock deal in Apr 2013,; merged entity has raised $12 Million from Helion , Accel and Tiger Global.
• Has joined hands with Umang Foundation who will help them to donate clothes to needy babies and children
• TVC Campaign - http://www.adforum.com/creative-work/ad/player/34481051
• Positives –
o Huge product assortment
o Easy and simple to use category assortment on website
o Lesser clicks to reach the product page
• Negatives -
o Reportedly running low on funding
o Poor customer reviews on products, delivery as well as returns
o Zero marketing after initial TVC
Firstcry.com Momandmeshop.in Hopscotch.in Babyoye.com Amazon.in Flipkart.com Snapdeal.com
Brands 550+ 70+ 400+ 400+ 500+ 400+ ~400
Shops/ Stores Yes No No Yes No Yes Yes
USP
•Offline
Stores
•Offline Stores
•Established Name
•Online Chat for help
•Flash Sales
•Imported
Products
•Large
Assortment
•Global
Brandname
•Indian E-Retail
Giant
•Indian E-Retail
Giant
Categories* 10 8 10 12 8 14 12
*Categories taken by the count of categories on the website serving babycare/babywear produts, subject to individual opinion
Feature Comparison

October2014 The Baby Care online market is growing
11.80%
15.30% 16.40%
12.90%
20.40%
11.80%
16%
25.40% 24.90%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
Baby Food Skin Care Toiletries/Diaper Bath Care Convenience
Products
Hair Care Maternity Care Online Baby Care
Market
Toys
CAGR
• The online baby care products market was grew to INR 1,879.0 million in 2013 with a CAGR of 25.4% from 2008-2013.
• Accel estimates predict that the Annualized GMV of online shopping in India (including all categories) will reach $8.52 Bn in 2016!
816
1983
8519
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
CY 2012 CY 2013 CY 2016P
Annualised Online Shopping GMV (USD Mn)

October2014 … but there is a long way to go
Fashion,
Footwear &
Accessories
28%
Books
7%
Home Décor
3%
BabyCare
3%
Computers,
Cameras,
Electronics &
Appliances
18%
Health & Personal
Care
2%
Mobile, Tablets &
Accessories
35%
Jewellery
2% Others
2%Fashion,
Footwear &
Accessories
35%
Books
21%
Home Décor
8%BabyCare
8%
Computers,
Cameras,
Electronics &
Appliances
10%
Health &
Personal
Care
4%
Mobile, Tablets
& Accessories
9%
Jewellery
1%
Others
4%
Current estimates
suggest that
although Baby Care
contributes to 8%
online retail
transactions
But the category
accounts to only 3%
of the GMV

October2014 Looking Forward – Take 1
The online baby care products market grew to INR 1,879.0 million in 2013 with a CAGR of 25.4% from 2008-2013
Considering 2 growth rates – 10% (conservative) and 20% (aggressive), within which Snapdeal’s share to be assumed 5% (conservative), 25%
(aggressive) to 40% (overpowering)
Conservative Growth Aggressive Growth
Baby Care in 2013 Baby Care in 2014 @ 10% Growth Baby Care in 2014 @ 20% Growth
E-tail Category Size – INR Bn. 1.89 2.08 2.08 2.08 2.27 2.27 2.27
E-tail Category share in
Market
5% 5% 25% 40% 5% 25% 40%
Market Share – INR Bn 94,500,000 103,950,000 520,000,000 832,000,000 113,400,000 567,000,000 907,200,000
USD Mn (@60 INR /USD) 1.89 2.079 10.4 16.640 2,268 11,340 18,144
• Under the assumption of Conservative or Aggressive growth of the market, Snapdeal can look towards its future steps and determine
the extent of involvement in this category using promotions, sales, category and product catalogue expansion , strategic tie-ups and
new avenues to target a Conservative, Aggressive or Overpowering share in the online baby care industry market
• Revenue targets can be anywhere between INR 100 Million to INR 500 Million, with superpowered growth coming from Aggressive
estimates pointing to INR 900 Million
• This converts to ~$2 million to $10 Million in moderate estimates and 2.25 to 18.14 Mn in superpowered growth
Opportunity for Snapdeal

October2014 Looking Forward – Take 2
Taking the market estimates from Accel reports, the current E-Retail industry revenues were estimated to be $1.983 Bn in 2013
The predicted E-Retail revenue in 2014 is ~$2.5 Bn, and for 2016 the revenues are predicted to be $8.519 Bn, owing to growing internet
penetration, increasing adoption of technology by Generation Y , higher conversion rates for online shoppers and increase in the organised
retail sector in India
• Under the assumptions of this alternate methodology, the market to target in 2014 is approx 75 Million, and at 5% to 40% share of
market in 2014, the revenues can touch the tune of ~$3.8 Mn to ~$30 Mn.
• For a future outlook, the same methodology gives an estimated revenue of ~$12 Mn to ~ $102 Mn , for 5% to 40% market share
when the predicted Market Size is $8.5 Billion
• If we consider the category to grow at 5%, there is a potential of growing the revenues from this category to the tune of 3-10 times
the current revenues (taking estimation of 5% Market Share currently).
All Figures in USD Mn
E Retail - 2013 Predicted E Retail - 2014 Predicted E Retail - 2016
E-Retail Industry Size 1,983 2,500 8,519
Baby care category size (@3%) 59.490 75.000 255.570
Snapdeal’s share @5% of Category Size 2.975 3.750 12.779
Baby care category size (@5%) 75 425.95
Snapdeal’s share @5% of Category Size 3.8 21.30

October2014
Attractiveness for Entrants and
Existing Players
.... while looking around
• With the modern day access to corporate funding, the entry barriers (in financial context) are low
• Capital requirements are moderate
• However, more than the expertise in website, technology, and financial management, the online baby care segment needs expertise
in product knowledge and strategic sourcing
• Government policies prohibit foreign retailers to start e-shops, however this rule is easily circumvented by using a marketplace model
• Cost disadvantages are independent of size, and in the long run only the horse with large feed can keep on running
• A new competitor might not achieve the economies of scale and scope, both of which are important to have in this segment
• Product, delivery and service levels differentiation matters a lot, and its difficult to achieve all these at the entry level
• A sensitive category, hence the brand equity matters. A new mother will trust a known brand over a new one, and same goes for the
online seller.
• The category has lesser players, and hence there is usually no threat of retaliation to a new entrant
• Access to distribution and operational efficiency is important, and it grows with experience
• The customers tend to switch between websites for their requirements, hence there is low loyalty and easy switching, making the
category attractive to enter
• Industry profitability is moderate to low, esp. since ticket sizes are smaller, there are more CG products involved (which usually have
lower margins) and fixed delivery costs per product are higher than other bigger products

October2014 .... for all factors
• The Indian Baby care products market is still in nascent stage, with low points of sale of good
quality, reliable products
• The population still considers some primitive products (cloth nappy, home made oils) to be better
for baby care
• The major web players are not big enough. Competing is relatively easier as compared to categories
like Books, Mobiles etc
• It is easy for consumers to switch to another website if they have a bad experience
• There is a high propensity of the customer to substitute and switch, with almost no switching cost
• Product differentiation matters, since its easy to substitute between lower end, easily available
products
• Long tail of the category can serve as a profitable business, esp. with rare items like bassinets, baby
care devices, training materials for mothers etc
• Customers have more buying power, esp. in the Indian e-retail scenario, where all players are
focused towards improving the service level and outpacing the competition at any cost
Competition and available sources of
access to end customers

October2014
Observations/Suggestions

October2014
• Put the marketing spend on TV and Digital, but also reach out to customers through traditional channels
• Employ sales force to set up app and website demo camps in malls, RWA Society campus, Fairs, Events
• Pamphlets/Brochures help retrieve information when needed
• Easier to target tier-II and III cities with traditional methods
• Market Snapdeal to Analysts by more frequent interactions and highlight the baby care category
• Traffic increases with app install count increase, so educate the customers and let the sales force do it for them through
outdoor interactions in malls, fairs etc
• Content marketing will be the new SEO, grab on to it – Snapdeal should work more on Content Marketing.
• More content for the new and expecting mothers
• Make Snapdeal their trusted destination for baby care tips
• Learn from global Retailers like Williams Sonoma, and Woolworths’ websites
• Helps in increasing traffic, conversion of viewers into customers and retention/repeat visit to website
• Contests like ‘Smart SD Kid ‘should have more Social Media buzz and Home page presence on the website
• Personalize the delivery boxes to appeal to the customer
Marketing
Strategies

October2014
• Localize the merchandise displayed on the home page and landing page
• Survey the users, reward them for completion, use the data
• Make/Offer weekly/monthly baskets for them to fill in, and send mail/SMS reminders – helps in retention/loyalty
• More emphasis on predictive analysis for to give out tailored deals and alerts to customers
• Pre-order is the buzz word – ask the users to register and then pre-order exclusive merchandise
• Bundle the pre delivery and post delivery products, either as a combo, on in a phased sale/discount (a part of the discount can be
availed on products before child delivery and a part to be availed for post delivery products). This will increase reach, repeated
purchase and retention
• Add a dedicated ‘Services ‘catalogue – Nannies on call, Exercise trainers and Yoga teachers, Caretakers etc
• Make ‘Baby Gifting’ a more prominent category – Gifts for Baby Showers, Post delivery celebrations, 1st birthdays - potentially big market
for online gifting.
• Customers should be able to see on the website how the gift will look in packed condition
• Products missing from the catalog –Devices for Baby lights n music, CDs n Media (mostly longtail products)
• Make the UI more colorful and use rich content – 85% product decisions are made at the visual appearance and colours are the best way
for brand recognition
Category &
Website
Specific

October2014
• Strategic tie ups lead to increased traffic and increased customer conversion, loyalty transfer and higher market attention
• Tie ups with Yoga practitioners – Yoga and exercises for expecting mothers and new mothers to keep them healthy.
• This can also be sold as content on CDs etc.
• Tie ups with Hospitals, Fertility Clinics –
• To connect straight with the customers
• To be a helping hand and guide when they might be looking for advice
• To market specialty products and give them a bundle of products+services (for pre delivery or post delivery care)
• Tie-ups for exclusive merchandise and pre-ordering them will lead to increased traffic and sales
Strategic
Tie-Ups
• Strategic Tie Ups for exclusive offers and products (with emphasis on a long term relationship)
• More imported brands and goods
• Market is expanding and hence its advised to keep a foresight into the consolidation that should happen after a boom
• Improving the catalog seen
• More visibility to sales on the home page
Growth
Planning

October2014
• Should pay heed when comparing or mapping the growth of this category to China's Baby Care growth and observations, the stark
difference being 'One Child' policy
• Important to remember that end customer doesn't look at only the product, price or delivery, but also looks at the facts like
product quality, usage and convenience related to it. Hence product landing page should have more informational features
• In strategic partnerships with trainers/maternity and infant care advisors, it is important to have a thorough background and
eligibility check. Same goes for domestic baby care products suppliers, esp. for non-branded items
Pitfalls
• Alt texts important for features like 'Register your baby' - The customer has to know about the feature and what to expect from it
• Use ‘Gamification’ to help attract the customer and keep their interest in the product profile
• Use of mobile technology in portable kiosks, pop-up stores etc should be incorporated
• Use clickable videos on kiosks and pop-up stores
• Adopt SMAC for competitive advantage over peers
• Bring in shopping assistance. For a category like Baby Care, customers welcome suggestions and help
• Look for niche social networks in India
• Overcome SEO difficulties and costs with Content Marketing
Technology

October2014
Thanks

Baby care segment online suyash tripathi

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Baby care segment online suyash tripathi