Childbirth in Indian hospitals was always a sterile experience, what with the depressing rooms, stern nurses, strict visiting hours and overpowering odour of disinfectants. In 1997, however, a visit by an Indian executive to the Batesville (Indiana) headquarters of Hill-Rom, a global provider of medical equipment to the health-care industry, would inspire a transformation. Ratan Jalan, then the President of hospital consultancy and architecture company Asian Health Services, saw Hill-Rom’s ‘labour delivery recovery beds’ and suites first-hand. The luxury of the suites was a revelation that would inspire a business idea.

A couple of years later, Jalan joined Apollo Hospitals. As chief executive of a group company, he spearheaded the plan to launch The Cradle, a boutique that allows mothers to give birth in five-star luxury. “A delivery is a natural and memorable thing and the experience should not be marred by a typical hospital or nursing-home environment,” says Jalan, who now heads Medium Healthcare Consulting. Today, the Cradle has grown into a Rs 75-crore business for Apollo Hospitals. Over the last nine years, the group has set up five such centres, with another 20 slated to come up in the next two to three years. “With the addition of 10 Cradles by this year end, the cumulative capacity value is expected to be around Rs 225 crore,” says Sudhir Diggikar, Director, Secondary Care, with Apollo Health and Lifestyle Ltd, promoter of The Cradle.

Mihir (name changed on request), a garment exporter based in the National Capital Region, has a different story to tell. He joined the family business, over three decades old, exporting women’s prêt-à-porter or ready-to-wear clothes. However, the intense competition made him switch to making and exporting clothes for kids. It was a wise decision, one that helped him weather the economic slowdown that began in 2008. Today, while other exporters are laying off workers, his company is running more shifts. Over the last decade, the number of machines at his factory has increased from less than 100 to about 1,000. The company employs about 1,500 people and clocked revenues of about Rs 40 crore in 2013. “Changing tack to make kids clothes, with 50 per cent being just babywear, has worked well for us,” he says

They are very different businesses, but The Cradle and the kidswear exporter, like many other companies, are tasting success by targeting the market for baby and child products, services and health-care. Today there is a plethora of such products and services on offer, promoted through sometimes subtle, and sometimes in-your-face efforts. They’re sold by a variety of retailers, in brick-and-mortar shops and online.

The products and services have moved beyond the traditional baby food, powders, books and toys. Today, companies have everything from baby perfumes, crockery, furniture and beverages to salons, birthing suites, cord blood banks and dance studios on offer.

The contenders for this growing pie include international brands such as UCB, Mothercare, Guess, JFK, Zara and Burberry, as well as domestic ones such as Lilliput, Littles, Ruff, and Giny and Jony. Big corporate houses are very much a part of the story. The Mahindra group’s retail arm runs a chain called Mom & Me while Reliance has brought the famous UK toy brand Hamley’s to India. The baby products category is largely dominated by multinationals such as Johnson & Johnson.

The craze for baby-centric products and services has spread to small towns, too, as marketers cash in on affordability. There is a very affluent and upper middle-class segment that can afford imported products. And, then, there is a middle class with aspirations, that is willing to stretch budgets, says Darshan Deora, Managing Director of Indvest Group, which owns the domestic brand Littles. “We are targeting this particular class, which constitutes about 65 per cent of the population.” Deora says Littles will launch affordable apparel and educational toys in over 500 small towns and cities, at Rs 500-600, making them cheaper than products from a host of multinational brands.

The attraction for this market is understandable when one looks at the numbers. According to a 2012 report by RNCOS, an industry research and consultancy, India is home to around 48 million babies in the 0-2 years age group and 304.8 million children in the 0-12 years segment. “Despite the worldwide economic crisis, sales soared to Rs 576.2 billion (Rs 57,620 crore) in 2011, owing to strong demand for baby and children apparel, footwear, toys and baby cosmetics,” says the report. The size of the highly fragmented market – unorganised retailers make up more than 90 per cent – is expected to nearly double to Rs 1,090.4 billion (Rs 1,09,040 crore) by 2015, adds the report.

The size of the baby market alone makes for a huge opportunity. A population of 1.2 billion and a birth rate of less than two per cent means about 20 million babies, equivalent to Australia’s population, are born every year. “The number is so, so, so, big,” says Jalan. “Whichever way you slice and dice it, it is still a very large number.” By any measure, there is a potential opportunity to tap 30 per cent of the market, or about six million babies, he adds.

It’s not a new phenomenon. India has been adding millions to its population every year for decades. The difference now is that incomes have shot up. The size of the middle class has grown and many more can afford to pay for better products.

All this has led to an upsurge in the number of businesses centred around babies and children — a trend that has even given rise to fears of cradle consumerism. Whether these fledgling businesses live up to their promise is something that will be clear only in due course.

Wooing the Womb

It starts even before the baby is born, in a birthing suite. Unlike the grim hospital environment, where pregnant women are often wheeled from one room to another for tests and scans, birthing centres offer integrated facilities in five-star comfort. The experience is personalised and luxurious. For example, at The Birthplace, a boutique in Hyderabad’s upmarket Banjara Hills, expectant mothers are treated like guests. They have a personal executive at their command and a 24-hour food and beverage service. After delivery, the mother is driven home in a Mercedes, says Jalan, whose company helped conceptualise the centre .

Apollo Hospitals proved that the birthing-in-luxury concept can be a winner. The Cradle’s first facility was inaugurated in New Delhi’s Greater Kailash (II) locality. Within months of its launch, the wife of Shivinder Singh, Executive Vice-Chairman of the Fortis Hospitals group, gave birth at the centre. The experience made a lasting impression on the couple. Soon, recounts Jalan, the Delhi franchise of The Cradle was bought by Fortis. It now operates as La Femme. In Bangalore, another former franchise of The Cradle has been taken over and rebranded as Cloudnine.

However, the service does not come cheap. At The Birthplace, a delivery costs a little over Rs 1 lakh. In return, parents-to-be get a happy ambience for their pre-natal, birth and post-natal needs. “The idea is to allay the anxiety and fear associated with a delivery and to pamper the mother without compromising on the safety of the delivery,” explains Tarun Siripurapu, 28, promoter of The Birthplace. The boutique has had a soft launch and will be formally launched later this week. To begin with, Siripurapu, an IIM-Calcutta alumnus and engineer from Purdue University in the US, plans to create a network in South India.

Software engineers Vanya (28) and Apoorv (30) had their baby, Vihaanya, at The Birthplace. She was the first child to be delivered at the boutique, early last month. “They promised to make it a memorable experience for a lifetime, and they did,” says Vanya, recounting how her husband was by her side all through, “without having to run around for tests or other such things”.

Cord blood banking is another new service involving infants. It involves collecting blood from the baby’s umbilical cord to treat ailments later in life. Mayur Abhaya, President and Executive Director of LifeCell International, which provides this service, says parents are willing to invest in this service to safeguard the health of their children as they grow.

E-tail ventures

If it’s happening in brick-and-mortar shops, the virtual world can’t be far behind. Unlike earlier, parents have more information at their command and can shop according to their needs.

Websites with products and services catering to this market have proliferated over the years, riding the consumption story and growing mobile and Internet penetration. They include toygully.com, allschoolstuff.com, storyrevolution.in and hushbabies.com .

Online companies are doing reasonably well, says Vijay Jumani, founder of Bangalore-based hoopos.com . The company recently merged with rival babyoye.com . It sells diapers, prams, apparel and cribs, among other products. The company commenced operations in 2011 and gets about 4,000 orders a day, averaging Rs 1,200 each. About 40 per cent of the orders come from non-metros and about 50 per cent of the customers are repeat ones, says Jumani.

Some straddle both the real and the virtual world. Just Born Baby, a 24-year-old store with a retail network across South India, also has a presence online. It sells products for infants and children up to five years of age. The company has created a ‘Just Born’ range of hygienic eco-friendly baby products, from nappies, clothes and toys to mild detergents, toiletries and baby-specific washing machines. Kunal Gwalani, product development head of JustBornBaby.com , says parents are particular about what they buy. They are brand-loyal, and, if satisfied, persist with the brand for the second baby, he observes.

Online stores are also able to reach to a wider market. “People in remote places such as the Andamans and the far North-East buy branded products online as they don't get them in shops there,” says Arunima Singhdeo, founder of babyoye.com , which offers over 8,000 products online for kids, from infants to those in their early teens.

Still, parents shop online because of the convenience, says Gwalani, adding that they order products they are familiar with. “For things like baby clothes, furniture and strollers, I think parents are keen on the touch-and-feel factor,” he adds.

The segment is still at a nascent stage. Only a handful of the 200 or so such e-tailers in the country are making money, says Ankur Bisen, Vice-President, TechnoPak Advisory. Their business models are still to be proven.

The Downside

Not everyone is upbeat about the potential of this market. N. Krishna Mohan, Emami’s Chief Executive (sales and supply chain), says that the kids-care market suffers from a lack of differentiation. “There is a big vacuum in the market in terms of the products and solutions offered,” he says.

The FMCG major, which had earlier planned to enter the kids-care market with baby talc, put its plans on hold after getting a poor response from its test marketing. The company has gone back to the drawing board. “We are trying to do more research; trying to understand the likes and dislikes of this particular category of customers,” says Mohan. “Once you have the right products then advertising or marketing will not be very difficult”.

In developed countries, safety is a big concern and exporters of baby and child products have to ensure that they comply with exacting quality standards. “It’s no child’s play,” says Mihir, the NCR-based exporter of kids’ apparel. “You could get sued if there are needle tips in your baby denims.”

Such norms aren’t enforced as stringently in India. And so, it falls on consumers to be aware of what goes into baby products, and that isn’t easy. However, a few years ago, the regulatory mechanism did work. The Maharashtra Food and Drug Administration pulled up a number of companies, including Johnson & Johnson, Wipro, Himalaya Drug Company and Emami, for misbranding and mislabelling baby oils. It also found the base of some products to be liquid paraffin oil, a mineral oil believed to be unfit for human beings.

The issue was sorted out, but it revealed the hidden persuasion that attracts a parent to a baby product, says Dr R.K. Anand, a senior paediatrician with Mumbai’s Jaslok Hospital. Whether it is vaccines, baby food or products for kids, parents should watch out for the subtle, yet persuasive marketing he says.

Some have argued that marketers are making it more tempting for parents to spend on their child. But that is true of all products, counters health-care veteran Jalan. Beauty products, for instance, could be seen to be making a killing by playing on people’s insecurities, he points out.

Parents want the best, but they need to be protected as consumers, as the product or service is for the baby, adds Akila Sivadas of the Centre for Advocacy and Research.

Ultimately, it is about both parents and children. “We have seen a lot of happy parents in our stores, taking time to shop for babies and kids. It brings them a lot of joy,” says Gwalani of JustBornBaby.com . And if the customers are happy, the retailers will be happier. A win-win situation if ever there was one.

A lifeline

India has the dubious distinction of recording the highest number of first-day deaths among newborns globally. According to a study by Save the Children, a child rights organisation, 300,000 newborns in India die on the day of their birth.

While many do not make it past their first day, advances in medical science are reducing child mortality. LifeCell International’s BabyShield, for instance, is a screening service that tests the newborn’s cord blood and urine for 118 conditions that indicate the possibility of sudden death or delayed development. The company charges customers Rs 4,990 for the service.

Cord blood banking is another service that is gradually finding more takers. It involves collecting blood from the baby’s umbilical cord to treat ailments later in life. Cord blood is rich in young stem cells, which can be introduced in an organ during adulthood and coaxed to multiply, treating blood and brain disorders.

The cord blood is stored for 21 years. LifeCell International charges Rs 75,000 for the service for a lumpsum payment. It also allows customers to pay through 24 instalments of Rs 3,500 each.

Nanny's Day In

Bringing up a baby is not easy and parents need the occasional break. Working couples in nuclear families, in particular, find it difficult to balance work timings and raise their kids. Many are willing to fork out a good deal of money for that break and this has given rise to nanny services, or “babysitting” services, as they are often advertised.

Portals such as sulekha.com , olx.com and justdial.com provide information on such professionals. In cities, nannies charge anywhere between Rs 3,000 and Rs 25,000 for an eight to 12-hour shift. Pritha Dasgupta, a media professional in Mumbai, hired a caregiver for Rs 15,000 per month for her two-year-old son.

The nannies are usually educated women, who speak English. The job involves feeding the baby, bathing it, changing diapers, taking the child for a stroll, and helping with early-stage learning.

Inputs from Anil Urs in Bangalore; Shobha Roy in Kolkata.

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