The Hindu Business Line : Hey mom, it's here!

Spotting this opportunity in a fast growing market like India, UK-based Mothercare has launched five stores in the country in the last one month. As part of an exclusive franchise agreement with Shoppers' Stop in India, Mothercare products, which were hitherto available only in the grey market, are now seen at Shoppers' Stop outlets in Mumbai, Pune and Hyderabad and Bangalore.

Says Rajiv Nair, Business Head, Mothercare India, "The babycare market in India still largely falls in the unorganised segment. What is known is that demand is huge but there is no hard research determining the size." In his estimate, an average upper middle class Indian family spends around Rs 25,000-30,000 in the first 18 months of the child's life.

Nair says he has even seen couples spending close to Rs 1 lakh on babycare products. But compare the Indian consumer to the global one and the desi parents still are in the toddler stage. Therefore, a major development is required in maternity care, baby care, baby safety, baby furniture, toys and travel products, says Nair.

"This is because of a lack of awareness and the low penetration of the products as they are currently serviced by the grey market mom-and-pop stores which don't focus on customer education," he says.

And that's the reason Mothercare plans to make its products available in at least 40 stores in the next five years and definitely have 10 exclusive stores in the next one year. Nair, however, refuses to divulge details on sales expectations for the coming year, saying, "I am unable to spell out the sales plans."

He is, however, upbeat about sales as the `initial response has far exceeded our sales plans.' Nair is expecting sales far in excess of the current mall store sales per sq. ft. benchmark, which is around Rs 8,000-Rs 10,000 per sq. ft. per annum.

The Mothercare product range includes baby and kids' apparel, baby furniture, bathtime, feeding and travel products, toys and maternity wear for mums-to-be. Though it's still too early to say which category would prompt high consumer spending, KSA Technopak's industry-wise spending estimates could be an indicator of who's spending on what: the largest category is kids' apparel having a market size of Rs 1,714 crore (£214 million) followed by sleeping products, which is Rs 1,370 crore (£172 million). The fastest growing category, however, is travelling products at a CAGR of 25 per cent. This category is the smallest in size at Rs 49.2 crore (£6 million) and will nearly double in the next three years to Rs 90.2 crore (£11 million).

In the UK, Mothercare stores are located both out of town and on high streets. These stores provide a range of clothing for mums-to-be, babies and pre-school children, together with home and travel products and toys tailored to the local market, with almost 60 per cent of space being dedicated to clothing providing a deeper assortment level. On the Indian perspective, Nair says the size for the entire Mothercare range of products for SEC AB Urban India is estimated at Rs 5,156 crore (£645 million).

While SEC A population is 35 per cent of SEC AB, its consumption is about 50 per cent this segment's consumption. The SEC A urban India market for baby and mother care products is estimated at Rs 2,648 crore (£323 million).

Having identified its target consumer, what promotion strategies does the company have in store to lure these consumers into the Mothercare store? Nair says that the launch phase is aimed at expansion and brand visibility.

As almost 80 per cent of the current walk-ins into the Mothercare shops know the brand and at least 20 per cent have shopped in a Mothercare store or used the products, brand building is not based on high-pitch media spends, he says.

"Accessibility to a lot more consumers across the country is priority No. 1." This will be followed by value-added workshops for pre-natal customers at the stores and tap playschools and other kids play groups. Mothercare also does a lot of research on mother and babycare and the information is disseminated through leaflets in the store.

This includes information on baby feeding, sun protection, choosing the right toys, choosing the right car seat, maternity care and precautions. The company is also building a catalogue specific to the Indian market that would help customers make informed choices.

FDI in single brand retail notwithstanding, the brand would prefer to take the franchise route, says Nair. Reasons are the same as other MNC brands: locals know the market better and are willing to invest in the development of the brand. Moreover, Mothercare has a universal format for expansion only through franchisees and it will be the same in the country. Apart from shop-in-shops in Shoppers' Stop, the UK-based brand will also look at setting up standalone stores in high streets and malls. Globally, Mothercare has franchise businesses across 38 countries.

Russia, Greece, West Asia, Eastern Europe and Singapore contribute significantly to the sales revenues, which touched £446.7 million in 2004.With India poised to becoming the most-populated country in the world in the not too distant future, the country may soon join the high-revenue bracket for Mothercare.