The first step on writing the business proposal is to determine if babywear clothing rental services have the market in Malaysia. To determine this aspects, industry and market analysis have been conducted. Since there isn't a fully report or study about babywear clothing rental services as its a fusion of two different business, clothing rental and babywear. The author have decided to conduct the research for both business separately and analyse it as its the best way to be as accurate as possible and implement it onto Malaysia's consumers.
INDUSTRY ANALYSIS
The global online clothing rental service is expected to hit US$ 1,952.4 million by year 2026 with a raise of 9.8% in CAGR (GlobeNewswire News Room, 2018).
Factors contributing to the rise of online clothing rental market:
1)Psychological factors of behavioural economics ( change in consumer behaviour, demanding on the latest trend which results the life span of clothing have decrease gradually).
2) Social factors of behavioural economics ( The rise in sharing economy such as Airbnb, increase in awareness towards sustainability etc).
International brands like Rent the Runway have 6 million customers and $100 million in revenue (Henry, 2018). As seen below is a comparison of few clothing rental brands in Malaysia.
Current clothing rental services available in Malaysia:
1) Zarrel
2) Glam Edge
3) Rent A Dress
4) Lola Gown
Market Value of Babywear and Toys Sector:
Current revenue valued at US$112 million and expected to reach US$230 million in 2023 with a current of 3.7 million active paying customers globally and expected to reach 4.8 million (Statista, 2018). Sales for baby products are expected to reach US$280 million within the Southeast Asia, the highest compared to other regions (THAKRAL, 2017). These statistics have proven there’s a market demand and is a new business opportunity for Aster + Luna.
Leading Kidswear Brands in Malaysia
The leading kidswear brands in Malaysia for 2017 are Poney, SEED, Miki Kids and Anakku Pureen and Johnson & Johnson (International, 2017). These information were obtained and analysed through questionnaire, comparison of financial statements of brands.
Financial Statements of other baby retailers in Malaysia
Based on the financial report published, sales growth for all brands have increased compared to the year before which proves again, the increase in demand for babywear in Malaysia. Anakku have been leading the babywear industry in Malaysia as they have already achieved a revenue of RM122.99 million and represents 19% of the babywear sales in 2011.With 31.25% of respondents purchasing from Anakku, the revenue is expected to be much higher in 2018.
Sustainable Malaysian Baby Brands
1) Ethissa
2) Tiny Tapir
3) Kooshboo
MARKET ANALYSIS
Demand for babywear:
Based on the given statistics of Nielsen Global Survey, the birth rate of Malaysian consumers is still above the global average even though the amount of live births had decrease internally compared to the pass year. Raking at the 85th in Top 100 highest global birth rate list, 3 babies are born in every 3 minutes and 1,392 babies born each day in Malaysia (Dosm.gov.my, 2017). This proves that Aster + Luna is targeting consumers geographically correct as Malaysia do have a better demand for babywear.
Demand on providing a quality life to babies:
The survey respondents emphasized that they would rather have lesser kids but improve their quality of life by providing better education, quality products to their children for a better future (Krishnan, 2018). Research have proved that Millennials and Generation Z are willing to pay more for sustainability in return (Business of Fashion, 2018). The demand for sustainable babywear can be created. From the questionnaire responses, 61% of Malaysian consumer are not knowledgeable of the negative impacts for mass growing conventional cotton to using chemicals in production process, waste and pollution produced from mass production and ethical issues of workers in the garment industry. By acknowledging them with such issues in the questionnaire, 95% of the respondents would support sustainable brands / products.
Rapid baby growth rate influencing the frequent purchase of baby clothing
As seen below is a chart of the average growth rate of 0-2 years baby.
The rising acceptance of clothing rental
Based on Nielsen’s research, surprisingly, 81% of consumers in Asia-Pacific are willing to rent items from others and have exceeded the global average at 39% (Nielsen.com, 2014). According to the questionnaire result, 58.4% of Aster + Luna’s target customers would rent babywear for their children and 35.6% would consider. 88% of respondents agree the price they’re paying for babywear is not worth the short amount of time worn. Other than that, rented and hand-me-down clothing have not much of a difference since both clothing have been worn by other baby multiple times according to a mother’s opinion during an interview conducted for this research. 80% of survey responses have used passed down babywear for their baby and have also handed down their babywear to others. Hence, consumers wouldn’t mind renting babywear. Even so, Aster + Luna needs to gain trust from new customers since hygiene is the main issue for renting babywear.
Thank you,
Renee Wong
Bibliography:
Dosm.gov.my. (2017). Department of Statistics Malaysia Official Portal. [online] Available at: https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=165&bul_id=NXRCRDh0RENGeU13bC9EdzJ1cUFtZz09&menu_id=L0pheU43NWJwRWVSZklWdzQ4TlhUUT09 [Accessed 2 Jan. 2019].
GlobeNewswire News Room. (2018). Online Clothing Rental Market is expected to register a CAGR of 9.8% By 2026- Future Market Insights. [online] Available at: https://globenewswire.com/news-release/2018/09/18/1572480/0/en/Online-Clothing-Rental-Market-is-expected-to-register-a-CAGR-of-9-8-By-2026-Future-Market-Insights.html [Accessed 24 Dec. 2018].
Henry, Z. (2018). Rent the Runway Had 6 Million Customers, $100 Million in Revenue. Then the Co-Founder Quit. [online] Inc.com. Available at: https://www.inc.com/magazine/201707/zoe-henry/jennifer-fleiss-rent-the-runway.html [Accessed 4 Jan. 2019].
International, E. (2017). Childrenswear in Malaysia. [online] Euromonitor.com. Available at: https://www.euromonitor.com/childrenswear-in-malaysia/report [Accessed 29 Dec. 2018].
THAKRAL, R. (2017). Winning Over Moms: The Most Sought After Demographic Online. [online] ecommerceIQ - Ecommerce in Southeast Asia, Reports, Data, Insights. Available at: https://ecommerceiq.asia/southeast-asia-mom-babies-online/ [Accessed 2 Jan. 2019].
The Statistics Portal (2018). [image] Available at: https://www.statista.com/outlook/257/122/toys-baby/malaysia#market-revenue [Accessed 29 Dec. 2018].
WHO Growth Chart: Birth to 24 months: Boys: Length-for-Age and Weight-for-Age percentiles. (n.d.). [ebook] Centre Of Disease. Available at: https://www.cdc.gov/growthcharts/data/who/GrChrt_Boys_24LW_100611.pdf [Accessed 5 Jan. 2019].
Wong, R. (2018). Industry & Market Analysis. [image].
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