Regional Social Trends’ Contribution towards 10% Annual Growth Seen as Crucial as Dubai Retailers Aspire to US$ 8 Billion in Sales by 2009
According to a recent industry report, major international manufacturers and retailers of baby products for the European, Asian and the Middle Eastern markets, are witnessing a significant increase in turnover and profits whilst social trends vary between the regions. Retailers in Dubai alone, regard the contribution of sales from everything baby and child related, as a critical factor if they are to sustain the projected growth in retail space by 2009.
In Europe for example, retail sales of baby products are buoyant largely due to women choosing to have children later in life. In 1975 the average age of a British mother was 24 years old, in 2003 that figure had gone up to 27 and is set to rise further, meaning parents are more financially independent and have more money to spend on their newborn child. In addition grandparents too are living longer and are more affluent than ever before which contributes still further towards the US$ 2,700 it is estimated was spent on baby products for each newborn in 2005. That’s up US$ 385 on the 2000 figures and projections put that spend at US$ 3,085 in just three years’ time.
Shannon Norris, Exhibition Director of Mother Baby & Child Show 2006 said, “Much has been made of Europe’s ageing population, but despite the fact that fewer babies are being born, more is being spent on each newborn, boosting profits especially for retailers at the higher end of the price spectrum.”
In Asia, although the trend is slightly different to Europe, the bottom-line effect for retailers is the same. In China birth rates are slowing for the first time in 30 years, due to the introduction in the late 1980s of the single birth policy. However, China will face another upsurge of population growth in the coming five years as the first single-child generation is about to enter reproductive age and currently China has over 270 million children under the age of 14 years. Add to that a growing middle class with real buying power to match and it is easy to see why companies are eager to extend their geographical reach in to emerging markets, which are estimated to be growing at over ten per cent per annum.
India has a similar profile to China, 390 million children under the age of 14 and again a rapidly expanding middle class. With aspirational parents and an economy growing at seven per cent a year, British high street retailer Mothercare has already opened up five stores in India with plans for up to 35 more.
However, the Middle East is a unique market, growing in excess of ten per cent annually and has one of the highest per capita incomes in the world and a large middle class expatriate population. The wealthy indigenous population often succumbs to cultural pressure, which ensures that family issues hold precedent over careers and young mothers with large families are the norm rather than the exception.
In addition Asian expatriate mothers living in the Gulf have above average spending power when compared with their peers at home with the advantage of live-in maids and tax free salaries. These components combined are driving the growth in the regional baby and child goods sector and their retail sales will play an integral role in generating the US$ 8 billion required by 2009 to support an estimated two million square metres of retail space.
“With one of the fastest growing populations in the world, 50 per cent of which are under the age of 16 years, the natural growth in the market is assured. An unexpected knock-on effect of the freehold purchases available throughout the Gulf States has seen many expatriates looking at long-term residency and starting or indeed extending their families. In some ways the Middle East could be described as a ‘new’ demographic trend, with many of the global trends prevalent within a micro environment,” added Norris.
The Mother Baby & Child Show which is due to take place at the Dubai International Exhibition Centre (DIEC) from 14-16 December 2006 has ‘grown up fast’ since cutting its teeth at the inaugural event in 2004. From the moment pregnancy is confirmed people’s lives change dramatically. They re-evaluate their buying habits, from the food they eat to the brands and services they choose to buy. The Mother, Baby and Child Show brings brand values to life and key marketing messages are reinforced in a fun and stimulating environment, providing branded products and services with a platform to build new relationships as well as nurturing existing consumers in this dynamic and fast-growing marketplace.
For a show still in its infancy the number of exhibitors for 2006 is impressive with projections set to top160, an impressive 15 per cent increase over last year. Visitors this year will exceed 25,000 positioning the show as the definitive event for any company wishing to reach families throughout the region. The show also enjoys solid industry support, echoed by this year’s sponsors, which include Wyeth, Mothercare, Avent & Virgin Airways.
