DUBAI, 1 July 2006 — 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. 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. Currently China has over 270 million children under the age of 14 years. India has a similar profile to China, 390 million children under the age of 14 and again a rapidly expanding middle class.
However, the Middle East is a unique market, growing in excess of ten percent 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 $8 billion required by 2009 to support an estimated two million square meters of retail space.
“With one of the fastest growing populations in the world, 50 percent 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.
