Despite the official sales figures, which scare even those who survived the 90's crisis, market experts are not going to talk about the death of the children's goods market. The decadent mood, according to Elena Gerke, coordinator of the Kiddypages baby products information center, does not help strengthen the business.
KIDDYPAGES - information center for children's goods. The main goal of the center is to create a professional information field that helps businessmen and buyers to navigate correctly in the children's goods market, saving time and facilitating communication. The target audience of the portal is professionals of the children's goods market (buyers, merchandise experts, store owners, etc. in Moscow, in the regions of Russia and abroad) and end customers.
In the last 3-4 years, the market for children's shoes has finally begun to develop: various price niches have filled up, new manufacturers, both Russian and foreign, have come in, Internet trade has improved, retail has revived, exhibition activity has intensified. Of course, the shoe market cannot be compared with the market for children's clothing, which developed much more dynamically and a year ago was close to a glut. In the shoe market, development was not so intense, but the uphill movement was obvious. Signs of stagnation were outlined back in 2013, when retail stores and, accordingly, distributors noted a drop in demand and a slowdown in sales growth. With 2014 year, the market had hopes for change. Now the 2014 year is coming to an end and we have to admit that it not only did not live up to expectations, but also set new challenges for the market. The market has entered an unfavorable stage of the economic cycle, which in the medium term will be influenced by the general economic situation, ruble devaluation and inflation.
In 2014, demand fell on the Russian shoe market. The fall was especially noticeable in the fall - visitors' counter in stores showed a decrease in traffic by 15-30%. Shoe retailers experienced a significant drop in sales in the summer, they are now calculating losses in the traditionally high winter zone and are preparing for an even more difficult next year.
In fairness, I must say that the children's shoe market has suffered not so noticeably as an adult: 2-3 pairs of shoes a year are sure to be bought for a child, despite the crisis, weather and mood. The question is how and what distributors, manufacturers, retailers and end customers will pay for these purchases.
We will try to analyze the situation that has developed for all market participants in the 2014 year and to predict the market behavior in the upcoming 2015 year.
Manufacturers: equality of power
The main domestic players have been determined for a long time. These are "Kotofey", "Antelope", "Skorokhod", "Thomas", "Paris Commune", "Top Top". Domestic producers in 2014 suffered less than foreign ones. The price of a Russian pair of children's shoes is lower than that of foreign brands, but in 2015, prices are likely to start to rise, because Russian manufacturers depend on imported components. Even the part of leather and soles that is produced in Russia is becoming more expensive - everyone uses imported chemicals and other foreign materials. But a boom in domestic children's shoes should not be expected, simply because Russian manufacturers do not have enough opportunities and funds to increase production volumes.
Import brands are widely represented on the market in a variety of price segments. These are the luxury brands Andrea Montelpare, Gf Ferre, Ice Iceberg, John Galliano, Simonetta, Roberto Cavalli Junior, Byblos, Cherie, Baldinini, Santoni, and mid-range brands Garvalin, Pablosky, Ricosta, Andanines, Xti Kids, Kavat, Alaska Originale, Ecco, and inexpensive Turkish, Polish and Chinese brands of children's shoes. Manufacturers and distributors of these brands had to bear additional costs in 2013-2014 - due to the entry into force of the technical regulations of the customs union, the certification of children's shoes has become much more expensive. But 2014 brought new difficulties that threaten to result in serious financial losses.
A difficult situation has now developed for the Italian manufacturers of children's shoes - they have always made a big bet on the Russian market and are now at a loss. The Spaniards, who are traditionally oriented towards the domestic market, and are not so heavily dependent on exports to Russia, have not suffered so much. But, despite the varying degrees of dependence on the Russian market, for all exporters of children's footwear, the current situation will result in a slowdown in growth, reorientation to new sales markets and economic losses.
The main buyers of imported footwear are residents of Moscow, St. Petersburg and large Russian cities. It is unlikely that the preferences of these buyers will change towards domestic producers, but the movement to reduce the number of pairs purchased per year is already evident, and this trend will continue in the coming year.
Stores: drop in conversion
The main retailers of children's footwear are specialized children's stores and chains, such as Detsky Mir, Korablik, Deti, Dochki-Sinochki, Olant, Kangaroo. In recent years, online trade has developed rapidly, and specialized online stores of children's shoes have appeared - Kotofey Shop, Botynok, Laptey.Net, Sandaliki, Veselo Shagat. It is not so often that children's shoes are bought in shoe stores for the whole family (due to the fact that it is convenient for parents to buy all goods for children in one place).
The recession affected stores of all formats without exception. The prerequisites for reducing market demand have been noticeable since the end of last fall, when the first signals of a drop in the attendance of shopping centers, street retail and a decrease in the traffic of online stores began. In the spring and summer, this downward trend continued. Well, this fall, when the fall of the ruble accelerated, the flow of visitors to stores began to fall even faster. In order to at least somehow sell the collections, almost all sellers started discounts with discounts very early, but they are already working badly.
In 2014, stores were afraid to invest for a long period, and therefore made small orders or switched to purchases from a free warehouse. Those distributors who were able to quickly reorient themselves acquired new customers. But at the end of the year, all distributors stood still. The impossibility of forecasting even for the short term and other possible risks led to the rejection of part of orders for the 2015 year. So far, distributors are not raising the rate, but they will certainly adjust it in the new year. At the same time, they are ready to optimize costs and reduce profits in order to keep their customers and not lose their place in the market. Obviously, in 2015, we are waiting for the redistribution of the market, the departure of some players and the replacement of expensive segments of the market with cheaper ones.
Consumers: impulsive shopping no longer
What turned out to be 2014 for buyers is already clear - inflation, redistribution of the family budget in favor of products and a very cautious approach to purchases. All these factors have already influenced the purchase of children's goods and, in particular, the purchase of children's shoes. Parents are spending less in children's stores than they used to. At the same time, opinion polls show that parents are not going to save money on their children. Buyers are in no hurry to buy shoes of a lower price segment, they still buy the shoes they are used to. But parents began to approach the purchase of shoes more carefully: they make a more balanced decision on the purchase, prefer to buy shoes with discounts and, alas, the emotional component is less and less triggered - to buy shoes that they just liked in the window.
So, 2014 did not meet the expectations of the children's footwear market. Most companies, in anticipation of changes, do not make any attempts to do something, blaming external factors. But let's remember that the best prospects open up precisely in times of crises. It is at such times that the most interesting ideas come to mind and are implemented, which subsequently bring good benefits. There were examples of such undertakings in 2014 as well. The company "My Little Spain", a distributor of Spanish children's clothing and footwear, has taken a course to promote its own brands, increase the level of market awareness and provide exclusive services for its customers in order to become a more attractive partner. To achieve her goal, she chose the path of collaboration. Together with the HADA Group, several joint events were initiated and carried out for the children's goods industry. Including, the creation of the educational program "School of Children's Stylist", which was presented at the Russia for kids business forum in April 2014, and which later became an independent commercial project. The goal of this training program is to create a new complementary salesperson competency to help drive in-store sales and attract new loyal customers. Another client service program "Top-business", also appeared in cooperation with the HADA Group, is aimed at promoting brands, supporting clients' business and increasing sales. The company plans to partially reimburse its partners for the cost of brand advertising, which they will give in the media on their own; train sellers and buyers of their partners; conduct events for buyers.
So even in times of crisis it is possible and necessary not to wait for changes from the outside, but to develop and find new forms of business ourselves. Yes, maybe some companies will leave the market. But the market for children's shoes will develop, and the business itself will become more creative. Business always adapts to new conditions, this is the key to further market development.
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