The children's clothing market - Spain

1.2 The world market

The global children's apparel market size was $***.* billion in ****. According to Fact.MR estimates, the sector is expected to reach $***.* billion by ****, an increase of *.*% from ****. Thereafter, the market is expected to continue to grow at a CAGR of *.*% to reach $***.* billion in **** and $*** billion in ****. Therefore, the market is expected to experience stronger dynamics in the coming years, as the CAGR during **** - **** was *.*%.

Taille de marché mondiale des vêtements pour enfants Monde, **** - ****, en milliards d'USD Source : Fact.MR (***) : projection

The Asia-Pacific region has the largest market share (***).

The growth of the global market will be driven by the strong demand for quality children's clothing and by the girls' segment, which will be more dynamic than the boys' segment.[***]

1.3 The domestic market

The classification of products carried out by the INE, allows us to highlight two economic activities related to children's clothing

CNAE Code ***; includes the creation of all clothing. Therefore, this activity includes clothing for adults and children. CNAE Code **** ; includes the manufacture of clothing for babies, sportswear, swimsuits, hats and caps, and the manufacture of other clothing accessories: gloves, belts, shawls, ties, neckties, hairnets.

Thus, it can be seen in the graph below that between **** and ****, the fashion sector in Spain saw a **.**% decrease in turnover. This trend should be analyzed in the context of the pandemic that Spain experienced that year. The baby clothing market appears to have stagnated in the same period.

Evolution of the turnover of the clothing and baby clothing market Spain, ****-****, Billions of euros Source: ****

Regarding the turnover of the children's clothing market in particular, it experienced a remarkable growth between **** and ****. Between **** and ****, turnover increased by **.**% from *.*** billion euros to *.*** billion euros. Then, by ****, the market continued to expand, reaching a turnover of €*.*** billion, representing an increase of *.**% over the previous year. Finally, turnover for **** is estimated to reach €*.*** billion, implying an additional growth of *% compared to ****

Turnover of the Infant & Baby Clothing market ...

2.1 Demographics in Spain

Between **** and ****, there was an increasing trend in the average age at childbearing in Spain, from **.** years in **** to **.** years in ****. In parallel, the number of children per woman experienced certain fluctuations throughout the decade, but generally showed a decline. In ****, the fertility rate was *.** children per woman, while in ****, this figure dropped to *.** children per woman. These data reflect changes in Spanish women's priorities and circumstances regarding childbearing and family planning over the last few years. These demographic changes do not bode well for the children's clothing market; indeed, the fewer children born, the less the children's clothing market will be able to grow.

Evolution of the current birth rate Spain, ****-****, number of children per woman Source: ****

However, as far as the forecast of the growth of births is concerned, it can be seen that the INE foresees a steady increase in births until ****. The birth rate will then be a long-term growth factor and the total number of births should increase by *.**% between **** and ****. In the next decades, they will reach the value of *** thousand each year between **** and ****, before representing ***.* and ***.* thousand each year from **** to ****.

Forecasts of the number of births Spain, ****-****, number of thousands ...

2.2 Household spending on child rearing

An increase in the cost of raising a child in Spain was observed between **** and ****. Indeed, if raising a child in **** cost on average *** euros in ****, the figure reached **% more in **** with an estimated cost at *** euros.

Thus the average expenditure per month to raise a child in Spain in **** varies according to the age of the child. For children aged * to * years, the average monthly expenditure was *** euros. For children aged * to *, the average expenditure amounted to €*** per month. For those aged * to **, the average monthly expenditure was *** euros. Finally, adolescents aged ** to ** required an average expenditure of *** euros per month. Overall, the average expenditure for raising a child in Spain from birth to age ** was approximately *** euros per month in ****.

Average spending by Spaniards per month on raising a child according to the age of the child Spain, ****, euros Source: ****

Regarding spending on children's clothing, it stood out in **** that for children aged * to * years, the average expenditure per month was ** euros, representing **.*% of the total expenditure in the budget dedicated to parenting. For children aged * to * years, the average monthly expenditure decreases to ** euros, representing *.*% of total expenditure. For children aged * to **, the average monthly expenditure on clothing ...

2.3 Fashion buying trends

As for the fashion sector, we note first of all that between price and quality, price is the criterion favored by consumers with **%. Quality is therefore the main criterion in this dilemma for **% of Spaniards.

Price or quality ? Spain, ****, % Source: ****

Also, it is perceived that other criteria concern the Spaniards in the choice of clothing. The disappearance of small stores is then the first source of concern with **.*% of respondents. Working conditions (***) and origin also seem to be major concerns.

Consumer concerns regarding apparel purchases Spain, ****, % Source: ****

In addition, it can be seen that the second-hand sector has a certain power in Spain. For **% of Spaniards, it is considered as the first choice of purchase and **% of them have already sold or bought a second-hand item. It is also noted that online platforms appear as the main channel of this market with **% of respondents saying that they are the best way to promote the circular economy.

Second hand in the fashion sector Espagne, ****, % Source: ****

2.4 The impact of inflation

If in March **** we can see a slowdown in inflation (***) posed consumption problems for Spaniards. A survey conducted by PWC, which can be seen in the graph below, shows that in ****, **% of Spaniards were thinking of reducing their fashion consumption due to inflation.

Percentage of Spaniards who plan to reduce their spending by expenditure item Spain, ****, %, by item Source: ****

3.1 Market value chain

3.2 Production

The classification of products carried out by the INE, allows us to highlight two economic activities related to children's clothing

CNAE Code ***; includes the creation of all clothing. Therefore, this activity includes clothes for adults and children. CNAE code **** ; includes the creation of clothing for babies, sportswear, swimsuits, hats and caps, and the manufacture of other clothing accessories: gloves, belts, shawls, ties, neckties, hairnets.

If these two codes do not allow us to analyze precisely the children's clothing market, they nevertheless give us an essential overview of the fashion market in Spain. Thus, it was observed that between **** and **** for the CNAE code ***, the number of companies increased from **** in **** to **** in **** (***). On the other hand, NACE code **** showed a similar trend, albeit less pronounced, with an increase from **** companies in **** to **** in ****, followed by a slight decrease to **** companies in ****.

Breakdown of the number of garment companies in spain and baby garments. Spain, ****-****, number of companies Source: ****

In terms of the number of employees between **** and ****, changes were observed in these two sectors. In the case of CNAE code ***, there was a decrease of *.**% in the number of wage earners, from **,*** in **** to **,*** in ****. On the other hand, CNAE ...

3.3 Distribution

in terms of distribution, it can be seen that the physical channel continues to dominate sales with **.*% of sales. The online channel therefore represents **.*% of sales.

Distribution by channel of clothing sales in Spain Spain, ****, % Source: ****

As for the market shares of the different fashion retailers in Spain, some developments stand out:

Multi-brand stores appear as the big losers of the covid crises. They had market shares in the order of **.*% in ****, **% in ****, and only *.*% which shows a drop of *.* percentage points between **** and ****. Outlet stores and department stores appear to have a quasi-stable market share. Outlets stores only lost *.* percentage point between **** and **** while large grocers gained *.* percentage point in the same period. Hypermarkets / supermarkets and specialty stores came out ahead with an increase in market shares of * and * percentage points respectively between **** and ****.

Evolution of fashion sector turnover by point of sale Spain, ****-****, % Source: ****

4.1 typology of the offer

Children's clothing can be grouped into three main categories:

Upper garments, which are worn to school or simply for going outdoors. They include heavy pieces, such as coats, jackets, smocks; undergarments, such as dresses, pants or jeans; and small pieces, such as T-shirts, sweaters and tracksuits. Footwear, both sporty and casual. Some brands have specialized in the children's segment, such as Geox, but all traditional brands also sell models for children, including Internet specialists such as Zalando. Nightwear and lingerie: underwear, pajamas and nightdresses.

For all these items there are different prices depending on the materials used, the overall quality of the products and the reputation of the brands.

According to theCBIchildren's clothing can be divided into * major price categories, which are summarized in the table below:

Source: ****

4.2 Prices

The graph below shows a great instability of consumer prices for baby and children's clothing in Spain. This instability is mainly due to the fact that the clothing market has two major sales periods starting in January and July of each year, thus creating a gap of ** index points between the normal and the sales periods.

Evolution of the consumer price index (***) - Baby and children's clothing Spain, *** -****, index Source: ****

However, an inflation of *.***% can be seen between **** and **** prices on average.

Indeed, except in April, May and July, all prices in **** were higher than in ****. Thus in January ****, the CPI was **.**, which represented an increase of *.** points compared to January ****, which was **.**. February, showed an increase of *.** points, from **.** in **** to **.** in ****. March also experienced an increase of *.** points, reaching **.** in **** compared to **.** in ****, as well as, the last months of the year, September, October, November and December, which registered increases of *.**, *.**, *.** and *.** points, respectively.

However, April had a decrease of *.** points, May of *.** points and June of *.** points. Despite this, in July and August ****, increases of *.** and *.** points, respectively, were observed compared to the same months of ****.

CPI comparison between **** and **** Spain, ****-****, indexes Source: ****

4.3 An offer between Fast Fashion and the need to offer more durable products in a circular economy

Fashion and Fast Fashion : Fast fashion is a business model in the fashion industry based on producing clothes on a large scale, at very low prices and with a very fast turnover of collections. In Spain, as in other countries, "fast fashion" has experienced a boom in recent decades, thanks to the ease of production and distribution offered by new technologies and the growing demand for affordable and trendy clothes. Fast Fashion, of which the Spanish group Inditex is one of the representatives, is increasingly criticized even if it is not going to stop today. Indeed, the rumor of the closure of Shein, a leader of the Asian Fast Fashion in **** caused a wave of orders for the platform.[***]

Second-hand clothing: Buying second-hand is an increasingly widespread practice in Spain, as it offers a sustainable and economical alternative to the consumption of new products. In the case of children's clothing, buying second-hand can be especially interesting, as children grow quickly and their clothes become obsolete easily, making children's clothing one of the best-selling product categories in the second-hand market. Just as *** Spaniards have already bought second-hand products, children's clothing is also in this market dominated by platforms such as Vinted[***]

Greener ...

5.1 Legislation

Rebates; if they are optional in Spain, the following rules may apply:

Dates: Sales in Spain have two periods established by law: the winter sales period, which runs from January * to March *, and the summer sales period, which runs from July * to August **. In addition, there are the so-called "seasonal sales", which may be held during the rest of the year, although in this case they are not regulated by law and the dates may vary depending on the store. Discounts: During sales periods, stores may offer discounts on their products. The law establishes that the minimum discount must be **% off the pre-sale price, although there may be exceptions for some products. Labeling: During the sales, it is mandatory that the products have a specific label indicating the previous price and the discounted price. In addition, the label must include the start and end date of the sale period. Returns: In the event that the product purchased during the sales has a defect, the consumer has the same rights as in any other purchase, including the right to return the product. Advertising: Sale advertising must be clear and may not be misleading. The store must clearly indicate the discounts applied and ...

6.1 Segmentation

• Inditex groupe (Zara)
• Inditex groupe (Zara)
• H&M Groupe
• Nike
• Adidas
• LVMH Groupe
• Artsana Groupe (Chicco)