'Baby boom' in Turkish economy attributed to higher living standards, awareness

Published 27.06.2017 23:32
Updated 27.06.2017 23:35
Turkey's infant wear exports increased 16 percent to $270.3 million in 2016.
Turkey's infant wear exports increased 16 percent to $270.3 million in 2016.

Backed by an increase in the number of new-borns and the level of consciousness of parents who spend more on their children, sales volume in sectors related to the ‘baby economy' have soared

In Turkey, where more than 1 million babies are born each year, the increasing level of parental conscientiousness and the increasing demand for resources for the healthy rearing of children is allowing the rapid growth of the "baby economy."

According to the Turkish Statistical Institute (TurkStat), last year 1,309,771 babies were born as the volume of the "baby economy" continues to expand in many sectors, ranging from clothes to tools and from toys to health care products.

As parental awareness increases in tandem with improved standards of living, parents are spending more money on their children amid the growing consensus that children must be raised in a healthy manner, allowing the sector to increase in volume day by day.

Speaking to Anadolu Agency regarding the issue, Istanbul Apparel Exporters' Association (İHKİB) Chairman Hikmet Tanrıverdi noted that among Turkey's population, 3 million children are between the ages of newborn and 2 years old, adding that infant and child wear has come to the fore with the highest growth potential in terms of the ready-made clothing market on a global scale. Tanrıverdi also added that infant wear has become an important sub-sector of the Turkish economy as income levels increase among the country's populace.

Noting that there are more than 150 companies operating both in the export market and domestically which focus primarily on infant and children's wear in Turkey, he said that roughly 50 of these companies are getting major attention from customers with trending brands.

He also added that as the result of the dynamic nature of the infant-wear market, many international brands have begun to operate in Turkey, marketing infant wear in stores across the country.

"Even though foreign brands have entered the market in previous years, we can now say that our domestic brands have a balanced share distribution currently, making the infant wear sub-sector a major player in the market," he said.

He stressed that there is still a higher share of exports in organizational retail in terms of baby wear, adding that there are more domestic firms in regions and cities across Turkey where population growth is the most rapid.

"Given the fact that the share of apparel and footwear in total retail expenditures is 5 percent, we have reached a volume of TL 30-35 billion ($8.7-$9.9 billion). We can say that the volume of the infant apparel market is TL 500-600 million ($142.7-$171 million), regarding approximately 3 million in the infant to 2-year-old age group," he stressed.

"Considering household apparel and retail sales, we can estimate that an average of TL 200-250 ($57-$71) is spent per baby," he added.

Tanrıverdi informed that the export volume of infant wear has a share of 1.6 percent in apparel exports which total nearly $17 billion, explaining that Turkey's infant wear exports increased by 16 percent to $270.3 million in 2016.

He highlighted that in the first five months of 2017, infant wear exports decreased by 5.8 percent compared to the same period of the previous year, reaching $104.1 million in total.

Tanrıverdi stated that there is growing demand for e-commerce in the sector, as online shopping spreads rapidly worldwide as time efficiency becomes more important. He added that along with this trend, infant wear is becoming an increasing part of e-commerce.

Consumers more conscientious of infant wear

Tanrıverdi pointed out that retail-based e-commerce volume in Turkey reached TL 17.5 billion ($5 billion) in 2016. He said that among young members of the populace who use smart phones and mobile internet data, significant potential for e-commerce growth has been observed in the country.

"Considering the fact that the ready-wear and apparel sector makes up 5 percent of total retail trade volume, we can say that infant wear will be one of the major categories of e-commerce. However, we know that families are much more attentive to what they buy in terms of infant wear," he said, emphasizing that a detailed inquiry of standards, qualities and other characteristics regarding these products, as well as the consumer need to see and touch these products prior to buying them, are some of the most important factors that suppress the rapid growth of infant wear in e-commerce.

Tanrıverdi stated that EU member states are among the countries with the highest level of demand for ecological and organic textiles. He explained that Turkey exports 72-73 percent of its total apparel exports to EU member states; thus compelling Turkish apparel producers to attach great importance to the subject of organic and ecological textiles due to the sensitive nature of the market itself.

He also recalled that azo-based substances, which are thought to have carcinogenic properties, have been banned in Turkey since 1994.

Meanwhile, he stressed that infant wear is among the most sensitive of categories among consumers.

"First of all, we must continue to be keenly aware of EU legislation and remain compliant with these standards as they are some of the most advanced in the world. On the other hand, the importance of apparel design is steadily increasing," he said.

He also suggested that consumer tendencies to lean towards original designs in infant wear are another aspect that strengthens Turkey's hand in global markets.

Domestic products comprise 10 pct of market

Tunç Karaaslan, chairman of the Association of Baby Products' Manufacturers, Exporters and Retailers (BAGİDER), said that the average annual expenditures per child in the infant-to-two-year-old age group in Turkey is estimated to be TL 2,000 ($570), while the average annual expenditures in the three-to-four-year-old age group fell to TL 1,600 ($460).

Regarding locality rates in the sector, Karaaslan said that in the context of textile products which cover a significant part of the infant sector of the market, domestic product shares stand at an average of between 40 and 45 percent.

"Excluding textiles, this ratio drops to 10 percent. On the other hand, if products provided by the production facilities of some foreign brands in Turkey are included, a domestic production rate of 65-70 percent in mother and infant products comes to the fore," he said.

Karaaslan stated that according to estimated figures in this field, 10 percent of products on the market are domestically produced, adding that the domestic production rate of infant furniture is around 20 percent.

"Nearly 80 percent of imports are made in this sector. Exports, on the other hand, are far less," he concluded.

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