Children have suddenly grown into the biggest asset for entrepreneurs and investors to lay their bet on. The babycare-kids segment presents a huge gamut of potential right from the prenatal stage to newborn and babycare, toddlers and pre-schoolers, K-12 segment, and early and late teens; and includes products, services, innovative digital offerings and solutions, and parenting advice.

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Being welcoming of almost any and every product or service has provided entrepreneurs with a blank cheque to experiment and provide new solutions and re-shape existing offerings to suit the evolving needs of customers.

“Unlike other segments, babycare and the children’s sector accommodates countless startups that have either an online or offline thrust. The segment is so vast that any prospective entrepreneur with even a germ of an idea and capital support can contemplate putting together a venture,” say investors.

Says Prashant Mehta, partner, Lightbox, a venture capital firm, “The kid's investment segment presents a huge opportunity in India. There are over 200 million kids in the country and the number is growing by 25 million each year. From better early childhood education to healthier food options, this age segment is greatly underserved due to lack of investment and access to quality products.”

Experts state the growth in the number of smartphone users in India and the trend to shop and seek advice online is having a direct positive bearing on babycare and kids startups.

As per estimates by industry body Assocham and Deloitte, the digital commerce space in India is expected to zoom to over $50 billion by 2018, up from $38.5 billion in 2017. While simultaneously, the number of smartphone users is also on the increase. The US-based agency Zenith reports that India will have 530 million smartphone users by 2018. While the number of mobile users is much higher, estimates suggest two out of three will upgrade to smartphones by this year-end. And the increased usage of smart devices implies greater and more frequent contact between brands, marketers and consumers; and a channel through which entrepreneurs can also peddle their ware. “Startups in the kid's space can expand their offering of products and services and simultaneously tap into newer markets due to an increase in smartphone penetration,” say experts.

“The internet using generation has increased by leaps and bounds. This coupled with the e-commerce boom has helped kids startups tremendously,” says Arunprasad Durairaj, CEO and co-founder of Flintobox, which designs activity boxes for children that aid in child development through a fun and explorative way.

According to Naiyya Saggi, founder and CEO of parenting platform BabyChakra, mothers influence a majority of consumption decisions (especially related to children), and there are over 45 million mothers who are online today. “Mothers resort to the internet for finding answers for everything. And this segment further boosts prospects for startups.”

With Indian parents spending an average Rs 2.5 – 3 lakh over the first four to five years of their child’s life, the market is indeed lucrative enough for all types of startups who now seek to grow and expand.

Little Tags, which deals with luxury and designer wear for children, now plans on adding luxury watches and athleisure outfits to its portfolio. According to founder Chandni Agarwal, the aim is to provide consumers with maximum choice. “We want to be a one-stop shop for all designer kids wear. Be it apparel, accessories, shoes, jewellery, etc. We also plan on engaging with about 100 designers by next year.”

Momspresso, a multi-lingual content platform for mothers, plans to grow its revenues from about Rs 15 crore in FY18 to Rs150 crores by FY21, “on the back of growing online ad spends and the targeting of a larger pool of women-centric brands,” says co-founder and CEO Vishal Gupta. “We also aim to grow our user base from 7.5 million monthly visits to 75 million monthly visits in three years.”

Flintobox, which started with activity boxes for four-eight-year olds, has now expanded to provide activities to children from two years and up to 12 years. From revenue of Rs14 lakh in 2013, Flintobox registered Rs13 crore revenues in 2016-17, says Durairaj. “We now ship 40,000 activity boxes each month and cover hundreds of towns and cities. We are hoping to reach revenues of Rs 40 crore in the next fiscal and we will create appropriate tools for all the touchpoints that create an opportunity for fun learning such as the school, home, media and technology.

BabyChakra, on the other hand, has been witnessing over 35-40% growth month-on-month over both their website and the app. “With this strong growth rate, we are able to see healthy repeat users and a good retention and engagement rate as well. As 65% of our users come from smaller cities, we are launching a multi-lingual platform that is social, contextual and intelligent”, says Saggi.

CATCH ’EM YOUNG

  • Start-ups are now providing new solutions, to suit the evolving needs of customers  
  • The growing number of smartphone users has a direct bearing on babycare start-ups