The baby clothing market - Portugal

1.1 Presentation and definition of the market

The market for baby clothing includes clothing and accessories for children from 0 to 3 years old. The sector is therefore a sub-segment of the apparel market, referring to a specific age group and consequently target consumer.

Growth is mainly sustained by high fertility rates in developing countries and by a growing interest in branded clothing. With the internet becoming each time more popular among parents, they are also starting to be exposed to the latest fashion from social media websites which are influencing their decision-making process. In addition, online shopping among the parents across the globe is also experiencing a boost, as more attractive discounts offered by the e-commerce websites such as Flipkart, Amazon, and Alibaba are gaining ground. Nevertheless, the key baby apparel manufacturers include Carter's, Inc.; Cotton On Group; Hennes & Mauritz AB; Nike, Inc.; Gymboree Group, Inc.; Industria de Diseño Textil, S.A.; and Naartjie.

Historically dominated by a few U.S based brands, the market’s perspectives are gradually evolving, giving space for newcomers to enter due to the impact of online retailing and the continuous change in the preferences of the new generation of parents. In addition, one can observe the rise of several fashion shows/exhibitions around the world -for example World of Childhood 2020- which are becoming more popular, promoting new tendencies and launching new products of baby clothing.

The Portuguese market is displaying one of the lowest birth rates in the European Union. In fact, in 2018, it was the fourth lowest birth rate of the EU. [Observador] In this context, although it presented a positive performance in the children apparel retail sector in 2018, it was still smaller than the one registered for adults apparel during the same year. With competitive prices, Zara Kids, Zippy and Primark represent the leading brands in terms of retail value. Nevertheless, all players need to adapt to a new demand from the Portuguese, impacted by a rising environmental concern (boosting claims for organic products) and an increasing awareness about their children’s needs, in particular regarding the material used in the manufacturing and its effect on their children’s skin.