South America: Large investors place Brazilian children products market as one of the fastest growing markets in the country
Source: CBME South America
According to IBGE (Brazilian Institute of Geography and Statistics)/United Nations Populations Fund, in 2020, population of 0 to 14 years is expected to reach 51,215,974 people in Brazil. Focusing that market, large Baby Store chains intend to open 300 new stores in the country until next year, an investment of more than USD 200 million.
The Brazilian market for babies and toddlers generates around USD 13 billion a year in the country, including furniture like cradles and dressers. Héctor Núñez, Ri-Happy toys megastore CEO points out “that represents more than twice the toys market, of almost BRL 9 billion”, says the entrepreneur, who is investing about USD 100 million in children- product stores.
Another indication of market growth was the first edition of CBME South America, which has received around 3000 buyers from Brazil and some South American countries. The trade fair, that gathered more than 100 brands, was marked by having all the greatest retailers in Brazil.
“The difference between visiting the supplier and visiting a fair like CBME is that during the event we get better negotiations which maybe would not be possible in a closed room. Another positive point is that all products are being exhibited, which turns decision-making into a very easy process”. – Julieta Ferreira – Ri-Happy Baby Account Manager.
Besides, he adds that baby products market is more resilient to macroeconomic variations than other sectors. Parents might go out to eat fewer times a month, for instance, but they will always want the best products for their children.”
For that reason, Ri-Happy is not the only one to give a closer look to the customer with small children. Alô Bebê chain, which also has a large store model (at least 800m²) with a wide assortment (about 10 thousand items), has started its expansion outside the state of São Paulo this year. “The baby products market has a more or less linear behavior. The child is a priority to the mother,” states Milton Bueno, Marketing Manager for Alô Bebê.
The chain focus is the expansion to other states, which they began by Rio de Janeiro. Stimulated by the opening of the new store, the growth expectation is of 30% until the end of 2013. “The goal is to keep building up and reaching the Central-West and Northern regions, which already have access to our e-commerce, but will also count on our physical stores”, says Milton.
Another company that is investing in store expansion is Tip Top. According to the brand’s Expansion Manager Ricardo Marcondes, Tip Top MegaStore was created to fill in a gap in the children’s market, which hasn’t got many players that market several items for that consumer niche in one single operation. “We understand that with the potential that this market has, Tip Top, which is in the Brazilian market for 61 years, could have a store that met all customer’s needs. We do not want the “passing by” shopper, we want the customer to solve all her ‘issues’ in one place,” says Marcondes.
