Market for baby and childcare products in Sri Lanka growing

Tuesday, 7 January 2014 00:28 - - {{hitsCtrl.values.hits}}

There is tremendous growth and potential in the market for mother, baby and child care products in Sri Lanka, says Kiddies & Toys International (KTI) MD Nabhan Akeel. KTI should know – they represent some of the world’s best known brands in childcare and toys and have been engaged actively in the market for over 20 years. “Sri Lankan consumers are becoming more and more brand conscious and are making a specific decision to choose branded products over the unbranded ones,” he says, pointing out that although the market is flooded with unbranded products, most parents choose to buy brands. “We see this reflected in consumer perceptions, attitudes and of course sales.” “It also means that people are becoming more quality conscious because buying branded items mean quality. Sri Lankan consumers are also

aware of changing global trends. For an example, we see a huge growth in the diaper market. It seems that the Sri Lankan market for mother, baby and child care products has matured into one of tremendous opportunity.” Market dynamics As the sole agents in Sri Lanka for one of the world’s best known brands of child and baby care products, Farlin, KTI is well aware of the market dynamics. The company also represents Mattel, world’s best known brand of toys, Barbie, Hot Wheels and LEGO. In fact, the baby and mother care market in Sri Lanka is experiencing an upward annual growth rate of 1% average when compared to countries such as Japan which actually has a minus growth rate. “This means that there is tremendous potential for the industry,” adds Akeel. “There is a trend towards making smart choices by customers – based on key aspects that define excellent child and baby care brands – safety, reliability, flexibility and accountability. We see the future of baby and child care brands growing as per capita income increases alongside. It is a global trend that is reflected here as well. The world is connected and can relate to and understand the same trends, whether in music, movies or toys,” he adds. Akeel reaffirms that the market is also growing into new channels such as on line marketing. Their website www.Happiness.lk which markets everything a mother and her baby or child needs, provides an excellent channel that builds intense customer activity and provides a platform of wide choice and availability for customers. “Globally, 30% of all sales are made on line. In Sri Lanka, it is currently at 1% which means once again, there is so much room for expansion.” “There are interesting dynamics at work here. For an example, in Europe, the market is 90% branded and the balance non-branded but here in Sri Lanka, only around 15-20% are branded while the rest are non-branded. While price does matter, it is becoming apparent that with access to internet and what is happening in the world in terms of trends and brand consciousness, consumers are also choosing to buy brands rather than go for non-branded items.” Building strategic leverage KTI believes in building strategic leverage in the mother, baby and childcare segment which is recognised globally as a key market. The company supports CSR activities such as sponsoring pre-natal clinics and plans to engage actively in the diversifying of specialised child care product ranges. “The future will always be shaped by dynamic markets such as the one we are engaged in. The nature of the business can only point in the direction of growth. There will always be a need for mother, baby and child care products.” Akeel is of the opinion that there will be more brand awareness, fuelling a presence of bigger and better brands, resulting in an explosion of growth as the toy industry matures and stabilises in Sri Lanka. “The children are very focused on brands and products they want. There are trends that develop and children pick up those trends via the web, friends or TV and often, they will ask the parents to buy those brands or products. It is a global phenomenon that has always grown despite economic setbacks,” he adds. In fact, he reiterates, the more brands there are, the consumers get the benefit of a bigger selection and quality. There are drawbacks though that hinder the growth of brands – high landing cost and duty components result in higher prices. Akeel believes that as a country, we have established systems and retail networks that are accepted as very good in the industry. He mentions the occasions when international brand representatives have been impressed with Sri Lanka – Denmark based Lego was full of admiration for our retail network. Mattel India was also impressed with it. KTI plans to enter exports as well; Akeel believes in value addition to products such as the Plex brand of metal toys that can be easily value added locally. “At KTI, we believe that Sri Lankan companies have the potential to grow beyond the region. We have the vision and the talent – we need to harness it all together.”