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Childrenswear in Europe

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Childrenswear and babywear are outperforming the overall apparel market in Europe, presenting exciting opportunities for exporters from developing countries. The childrenswear market is the fastest-growing and one of the most lucrative markets in the garment industry, with department stores and supermarkets giving it more and more floor space. The Nordic countries, the United Kingdom and eastern Europe offer the most potential, thanks to growing birth rates and/or increasing spending per child.

1. Product description

Childrenswear in Europe comprises clothing designed for children up to about 16 years old. The main segments are girls’ clothing (ages 2 to 16), boys’ clothing (ages 2 to 16) and clothing for infants (babies to under-2-year-olds).

Sizes in childrenswear vary across European countries, especially between southern and northern Europe. This is because northern Europeans tend to be a lot larger.

Sizing is usually based on the height of the child, although age is also a common determinant. The largest size is 176, intended for children around 16 years of age. Up to the age of two years, age-based sizes in European children’s clothes are expressed in months (for example, two years old is 24 months). Beginning at the age of three years, age-based sizes are expressed in years.

Figure 1: Childrenswear examples
childrenswear2017-figure1.jpg
Source: Google images

Quality

Apart from the general quality requirements for apparel, childrenswear has some special requirements that have gained importance over time.

  • washability: because children’s clothes can become quite dirty, consumers prefer items that can be washed at fairly high temperatures without the risk of shrinking or fading;
  • natural materials: consumers increasingly prefer childrenswear made of materials that are as natural and hypoallergenic as possible.

Labelling/Packaging

The following information is generally included on apparel labels (see also Figure 2):

  •  care symbols (see examples below);
  •  composition (fibre content by percentage);
  •  size;
  •  country of origin (“Made in”);
  •  further information (e.g. ecolabels), if applicable (see examples below).

Preferably, the product information on the label should be in the language of the country for which the clothing is destined. Labels in multiple languages can be an option for retailers or wholesalers who sell their products in different countries.

Figure 2: Examples of labelling
childrenswear2017-figure2.jpg

Textile-specific labelling requires the inclusion of fibre content.

Optional information includes origin, care, manufacturer and/or importer information, and size.

Care labelling

The care labelling system developed by GINETEX, the International Association for Textile Care Labelling, is widely used in Europe. The GINETEX symbols are also very common. You can only use them under contract with the association. GINETEX advocates that labels should cover the following topics:

  •  general care and warnings;
  •  washing;
  •  drying;
  •  ironing;
  •  professional textile care (dry-cleaning).

Tips:

Materials and design

Childrenswear sold in Europe is manufactured primarily with cotton, as cotton can be washed in hot water without much shrinking or fading of colours (“washability”).

Conventional cotton may contain toxic substances (such as pesticides) and chemicals from the dyes used. Organic cotton is increasingly popular in baby clothing: it is perceived as being better for both the child – as it prevents hypersensitivity and allergies – and the environment. Here are some examples of organic baby clothing brands.

Comfort, safety and convenience are the most important considerations for parents buying clothes and footwear for their babies and children. One-piece baby outfits are popular, as they are easy to put on and take off, while clothing with dangling strings or ribbons tends to be avoided.

Examples of comfortable child-specific outfits include leggings, wetsuits and pyjamas. Some fashion-minded parents look for cute, stylish designs.

2. Which European markets offer opportunities for childrenswear?

Fastest-growing segment in apparel worldwide

Childrenswear is the fastest-growing apparel segment worldwide. Global sales amounted to a total value of over € 135 billion in 2015, up from € 122 billion in 2010. In 2015, childrenswear sales grew by 6%, as compared to 4% for men’s and women’s wear (source: Business of Fashion, 2016). At least until 2019, childrenswear is expected to remain the fastest-growing in apparel worldwide.

In Europe, childrenswear is also a large segment. Total revenue on the European childrenswear market reached over US$ 66 billion in 2014, with a compound annual growth rate (CAGR) of 1.4% between 2010 and 2014 (source: Ken Research, 2015). Children’s clothing, footwear, sportswear and accessories took the largest share (US$ 44 billion, or approximately 66%).

Analysts expect further growth until at least 2019, with the European childrenswear market reaching a total value of around US$ 74 billion by the end of 2019.

Declining birth rates do place slight pressure on this segment. While Europe continues to be one of the largest markets for this segment, it has been overtaken by Asia-Pacific in terms of size. Nonetheless, kids’ fashion is booming. Zara’s new standalone Baby store in London, opened in 2017, and the expansion of Base Fashion childrenswear are just two examples.

The European market is expected to accelerate its growth by 2% to 3% between 2013 and 2018, driving the market to a value of € 67 billion by the end of 2018 and € 74 billion in 2019.

United Kingdom, northern and eastern European countries growing fastest

Germany is the largest European childrenswear market, but most of the growth on the European market for childrenswear will be experienced in Nordic countries, the United Kingdom and eastern Europe. Most of these markets are still quite small when compared to the western European market. Within western and northern European countries, British markets are still growing.

Tips:

  • Focus on northern European countries and the United Kingdom as the most interesting markets. Denmark is often the bridge to the other Nordic countries, which makes it a good starting point.
  • Apply the highest levels of corporate social responsibility (CSR), quality of materials and finishing possible, as Nordic countries and the United Kingdom have high standards in these matters, especially in childrenswear.
  • When addressing the northern European market, make sure that you give a good first professional impression using social media, as Nordic consumers are very tech-savvy and make good use of social media. Social media platforms can make or break your reputation.
  • Explore the sub-segments of outerwear, such as jackets and woollen items, which provide protection against the harsh winter.
  • Explore eastern European countries as the highest-potential final markets for your future growth in Europe.

Today’s kids are fashion-conscious

One important reason why Europe is an interesting childrenswear market is that childrenswear here has become a fashion market. The influence of social media and celebrities on younger children – and their parents – has caused children’s clothing to evolve into a trend leader, with kids more aware than ever of trends. One example is the collaboration of Boots Mini Club with British television celebrity Fearne Cotton.

Fast fashion and premiumisation are growing in childrenswear

The fashionability of childrenswear has fuelled the growth of fast fashion in childrenswear – another factor that makes this segment interesting. Led by leading apparel brands such as H&M and Zara, even price-conscious western European parents are following this trend. As the lowest-priced of the three, Primark has seen the quickest growth, logging a 12% CAGR between 2011 and 2016.

At the higher end, premiumisation of childrenswear is creating opportunities, with luxury brands such as Burberry and Dolce & Gabbana investing heavily in this market. Consumers are increasingly willing to spend serious money on premium brand clothing for their kids.

Another factor tying into this trend is that parents are having children at a higher average age, which means that they have a higher disposable income.

Tips:

  • If you want to expand your exports, consider Europe as a highly fashion-conscious market and Asia-Pacific as a growth market in terms of volume.
  • Study the apparel trends for adults and you will have a good idea of childrenswear trends as well.
  • Focus on higher-end products for children, emphasising quality, design, fashionability, luxury and durability.

Polarisation

Demand for higher quality is driving European consumers to higher segments. While these segments are already popular among the “rich and famous”, now middle-income parents are accessing them as well. This development is putting pressure on the middle segments and helping low-end players – super- and hypermarkets – to increase their reach.

Upwardly mobile consumers are highly quality-conscious and many higher-end products have seen sales increases. This situation applies especially to childrenswear, with parents eager to give their children the best possible quality and appearance.

Tips:

  • Tap into the polarisation of the European childrenswear market by either focusing on low-cost, high-volume exports or on value addition for higher segments. Generally speaking, the latter option is a better way of securing a solid position on this market.

Licensing

Licensing is a large factor in childrenswear, as most television and film characters target children. For example, think of the large amounts of childrenswear featuring characters owned by Disney, the world’s largest licenser in this field. License Global also mentions Marvel, Mattel and Animaccord in its list of top licensers.

Nightwear is one of the largest licensing segments in childrenswear; outerwear – jackets and coats – is the least penetrated and therefore offers good opportunities.

Many regular retailers and online shops hold licences from leading children’s brands, and so do many large companies. As these companies develop and sell children’s collections, they are a very interesting potential customer for you as an exporter from a developing country.

Tips:

  • Ask your buyers whether they are interested in licensed childrenswear and how you can help them with fresh designs or products.
  • Encourage licensed buyers to tap into the pre-teen market with more mature, cooler designs.
  • Consider buying a license yourself as a good strategy to diversify and to create an exclusive position on the childrenswear market.
  • Check the License Global list of top licensers for ideas and information.

Organic clothing is becoming more important

A growing number of European parents are interested in buying organic clothes, especially those who can afford up-market prices.

Large retail chains are setting the trend in organic clothing for children, with smaller designers and retailers following. See, for example, H&M’s Conscious-Sustainable Style for kids or Zara’s 2017 Join Life sustainable collection.

Organic clothes are more expensive than non-organic clothes, which means that consumers also expect outstanding quality and design. If you can combine these characteristics, this segment is interesting for you.

Tips:

  • Use organic materials to create a distinctive collection for children, offering excellent quality and design.
  • Do not just focus on the fact that your garments are organic, but make sure that they are also fashionable.
  • Find out more about organic and sustainable fashion in our study of sustainable apparel in Europe.

Special occasion and traditional clothes will always be popular

While fashion trends come and go, young girls especially are still often expected to wear dresses or skirts on special occasions. To a lesser degree, boys will wear shirts and trousers or occasionally a jacket and tie. Classic seasonless clothes in neutral colours are very popular for this purpose. Dresswear is available in Europe at both the low and high ends of the market.

One of the attractions of this segment for you as a supplier is that it is seasonal and fairly predictable. If you gain a standing here, you will know what to expect in terms of orders each year. In order to ensure year-round sales, of course, you will have to expand your collections to include more casual garments. Another option is to aim for high-end buyers specialised in year-round dresswear for children.

Tips:

  • Explore the special occasion and traditional dresswear market segments as a means of securing regular, predictable orders.
  • Consider carefully whether you should focus on lower-end or higher-end dresswear, basing your decision on your pricing and quality levels, for instance.

“Mini-me” and kids as “accessories”

These days, children in Europe are “the new accessory”. Large brands focus on millennials – young adults born just before 2000 – while they use childrenswear to strengthen their brand power by offering miniatures of adult clothes. See, for example, this Vogue article on Mini-me fashion trends in 2017.

The Mini-me trend is an interesting way of moving from adult fashion segments into childrenswear, as it involves using similar fabrics, designs and channels. It is also technically challenging, as baby- and childrenswear production tends to require more efficiency. It comes in lower volumes and sizes are smaller as well, which means that waste can be higher.

Tips:

  • Consider Mini-me garments as a means of moving from adult fashion to childrenswear.
  • Contact buyers who operate in both segments to explore the possibilities.
  • Make sure that you have the focus and the high efficiency needed to manufacture baby- and childrenswear. Although sizes are smaller, and prices and consumption are lower, labour intensity is higher. This fact means that you need to have a strong business model with outstanding efficiency levels.

E-commerce and unified commerce

Online shopping and e-commerce are becoming very popular among European parents, who are usually both very busy and tech-savvy. E-commerce gives them the possibility to escape going to busy shopping streets during weekends with their kids.

Kids, even more than millennials, are growing up in an environment in which the lines between on- and offline no longer exist. They will be the first to encourage the further merging of various forms of business into one: “hybrid commerce”, “digital commerce” or “unified commerce”.

Brands targeting teens are especially fusing physical and digital stores, integrating all their activities in a centralised IT infrastructure. The challenge is to make sure that their young, tech-savvy customers receive the same information and have a similar experience at every so-called touchpoint with a brand. Touchpoints can include a brand’s mobile or regular website, social media activities, advertising and brick-and-mortar stores.

Tips:

  • If you are active in adult clothing, extend your collection to include childrenswear if you can. Not only will this generate some economies of scale, but the ‘mini-me’ effect will also appeal to young parents.
  • Consider targeting a special niche to escape market saturation, such as special occasion childrenswear, a niche with lasting potential.
  • Avoid “more-of-the-same” childrenswear; rather, try to develop unique, distinctive products, adding to the high diversity on this market and capturing the interest of buyers seeking something special.
  • Offer quality organic products for affordable prices to the middle segment or a special collection to the upper-middle segment.
  • Look at the collections of popular brands to get ideas; for example, IKKS, Desigual, Stella McCartney Kids, Petit Bateau, Kenzo Kids, Jottum, Junior Gaultier, Boss, Burberry, Chloe, The Little White Company, Dolce & Gabbana, Fendi, Scotch Shrunk, Kiddy’s Class, Zara Kids (Inditex group), H&M, Mayoral.
  • Explore online shopping and e-commerce. Among the most complete online shopping platforms for children’s wear in Europe are the following examples: Kleertjes, Babyccino, Name It.
  • Learn more about important trends and developments in our study of trends in European apparel.

4. Which requirements must childrenswear comply with to be allowed on the European market?

The requirements for the accessories market can be divided into (1) musts, or legal requirements; (2) common requirements, the ones that you need to comply with in order to keep up with your competitors; and (3) niche market requirements for this segment.

Legal requirements

There are many requirements that your products have to comply with by law in order to be sold in Europe. The main areas which they cover are:

  •  product safety (all products);
  •  use of chemicals (in textiles, leather and accessories);
  •  labelling (there are specific rules for textiles);
  •  use of materials derived from wild plants and animals.

Tips:

Common, non-legislative requirements

One of the main non-legislative requirements common in Europe is care labelling, which we discussed in the first section of this study.

Another requirement is sizing. The European apparel industry is pushing for standard sizing legislation, as sizing systems currently vary across Europe. An upcoming trend in sizing is the consumer demand for more personalised sizing.

Tip:

  • As long as there is no EU-wide legislation on sizing, use a recognised standard for your products.

Niche requirements

Different niches in European apparel have different requirements. Many of these requirements are related to specific certification schemes. An example of a scheme used in organic cotton garments for babies is the GOTS standard.

The Business Social Compliance Initiative (BSCI) is an auditing system for monitoring the social performance of suppliers. It was developed by European retailers in order to improve social conditions in sourcing countries.

GOTS is a textile processing standard for organic fibres. You can obtain this quality mark by complying with standards of social responsibility and making sure that your childrenswear contains a minimum of 70% organic fibres.

The Oeko-Tex Standard is the world’s leading ecolabel for testing textiles on the presence of harmful substances. It consists of three certification levels, which address the effects of textile production processes on humans and the environment, as well as the effects of the textiles themselves (including the chemicals) on the health and well-being of consumers.

The European Ecolabel is a voluntary label for products and services with reduced environmental impact. It is awarded only to products with the lowest environmental impact in a particular product range.

Tips:

5. What competition do you face on the European childrenswear market?

Company/product competition is moderate to high

The European childrenswear market is becoming more concentrated, with supermarkets, hypermarkets and clothing chains increasing their market share.

Some retailers on this market have a diversified offer, but many players retain a strong emphasis on childrenswear, which intensifies rivalry as they are very reliant on this market.

6. Through which channels can you get childrenswear on the European market?

The middle segment is losing out

Childrenswear in Europe has become increasingly polarised, pushing the market in opposite directions. Cautious spending by consumers has provided a boost for the low and middle-low segment. Notwithstanding the continuous growth of the low segment, margins in this segment are incredibly low and competition is fierce.

Consumers seeking higher quality and better design are moving to the stable higher end, leaving mid-market segments struggling. While price is the decisive factor at the low end, quality and design are crucial at the high end.

Supermarkets are gaining share

The bulk buying power of supermarkets and hypermarkets is allowing them to capture an increasing share of the market with the increased demand for budget items. Retail tactics aimed at positioning supermarkets as a source not only of food but also of good clothing, especially childrenswear, have strengthened this development.

Tips:

  • Sell to hyper- and supermarkets if you can produce high volumes at low cost.
  • Develop different sales channels alongside hyper- and supermarkets, as their purchasing behaviour can be unpredictable.

Segmentation by age

In addition to looking at conventional market segments, another helpful perspective on childrenswear is to divide it into segments on the basis of age groups, each with its specific characteristics:

  • Baby and toddler garments require soft, natural materials. Safety is essential, as many of these products are in direct contact with the skin. Chemicals are a no go.
  • The 4–11 age group likes colour, prints and licensed comics with playful designs.
  • The 12–16 age group, teens to young adults, prefer more mature designs similar to those in the adult market but with a higher “cool” factor.

Tips:

  • Avoid the overcrowded, low-margin low end unless you have higher volumes and very low prices that will appeal to supermarkets or private labels.
  • Try to reach for higher market segments – and higher margins – by adding value; for instance, by focusing on design, unique or sustainable materials or techniques, innovative packaging, fashionability, and so on.
  • Look at the market in terms of age groups to find out which one best suits your possibilities. For example, if you have access to good natural materials, target the baby and toddler segment or a niche for older groups.

7. What are the end-market prices for European childrenswear?

Typically, the retail price for general apparel is 4.5 to 6 times the Free on Board (FOB) price. FOB means that the cost of delivering the goods to the nearest port is included, but that the buyer is responsible for the shipping from there and for all additional shipping fees.

Figure 3 below offers a general overview of childrenswear price segments, along with segment criteria and brand examples.

Figure 3: Price segments for childrenswear in Europe with examples of brand names

  Product criteria Brand names Fashion criteria

High-price luxury segment

Limited collections made with special care; sometimes handmade, high-quality materials

Designer/brand name stands for exclusivity and fashionable clothes

Burberry, Baby Dior,

Ralph Lauren, Stella

McCartney Kids, Gucci Kids, Fendi Kids, Dolce & Gabbana, Blossom

Highly fashionable

collections

Exclusively designed materials and artworks Trendsetting in fashion

Upper-middle price segment

Collections are produced after pre-sale; extra attention to fitting and accessories

Branded products, good-quality materials, broad range of designs
Modström, Baby & Taylor, Oeuf, Petit Bateau, Bonpoint, Cacharel, Catimini

Large variety of styles and materials

Styles and fitting are vitally important

Product in line with the latest fashion trends

Middle price segment

Collections are produced after pre-sale; good- to medium-quality materials

Trend-following or classical assortment; branded products
IC Companies: Inwear, Matinique, Jackpot, Part Two, Indiska, Gina Tricot, Derhy Kids, Jacadi, Elle Girl, IKKS, Benetton Kids, Desigual, Marks & Spencer Good fitting is important Recognisable by brand name, visible on outside
Low to middle price segment (including discount segment)

Produced in larger quantities to lower the price; basic styles, fewer changes to patterns, basic fitting

Medium-quality materials, less fashionable
H&M, Vero Moda, Only, Jack & Jones, Carrefour, Auchan, Tesco

Collections that reflect the current fashions

Less fashionable, close to trends

Source: CBI

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