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According to Rahul Anand, co-founder and chief executive officer of Hopscotch, when he started his company in 2012, there were six other players in the market. Of these, four have perished and the other two are BabyOye and FirstCry.
BabyOye reported a net loss of Rs 15.14 crore in the previous financial year, according to media reports. Sources also said BabyOye’s acquisition by the Mahindra group was a rescue operation. Among the many reasons experts cite for the poor showing by these companies, the most significant one is the Indian online retail market is not ripe for single-category e-commerce sites. Multi-category websites, such as Flipkart and Jabong, which attract huge investments and can spend on marketing significantly are the biggest threat for children’s product websites.
“The recent interest in kids online merchandise segment is not a major trend,” said Gaurav Gupta, an e-commerce analyst with Deloitte. “Though the kids segment is evergreen, there have been some categories that are doing well. But then, single-category players do not usually do very well online. Individual category websites in India is an idea ahead of time,” he added.
Experts also believe children’s products websites are merely copying western formats, which may not go down well with Indian consumers. According to Anand of Hopscotch, most companies were Indian replicas of US-based Diapers.com. “Mothers in India already have convenience facilities. Hence, this business idea might not be really viable here,” he said.
Thus, like most retail segments, the key to success in this niche category also is recognising the specific requirements of Indian parents.
Additionally, catering to the need of branded products is another important aspect in the segment. Online retailers in the children’s segment have always had an upper hand in selling branded products, compared to offline sellers.
However, though India is a big market, on the supply-side, the offerings are narrow and limited. The gap in the market for quality products at affordable prices still remains wide.
Unique business models are the only way one can remain in the field, experts say. For instance, Chennai-based start-up Flintobox claims it is growing at 40-45 per cent a month. The year-old company sells toys conceptualised by educators.
“The monthly discovery box for kids aged 3-7 years have something to create, something to read, something to play, something to explore, with a bonus fun activity thrown in," says co-founder Arunprasad Durairaj. According to Flintobox, parents do not mind shelling out Rs 900 per month for development of their children’s minds.
