The demographic crisis—the main challenge facing the children's products market in Poland in 2021

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The demographic crisis—the main challenge facing the children's products market in Poland in 2021

The market for children’s products* in Poland was worth 14.49 billion PLN in 2020, following a 2.3% year-over-year decline, according to the latest PMR report, “Retail Trade in Children’s Products in Poland 2021.” Analysis and market growth forecasts for 2021–2026.

More than half (54%) of respondents—that is, people who buy children’s products—in a September 2021 PMR survey stated that the COVID-19 pandemic did not affect their purchases of children’s products. Purchases in some of the children’s product segments we analyzed are essential (e.g., diapers, wet wipes, and food). The pandemic had a stimulating effect on sales in certain categories, including baby gear and toys.

Market Value and Growth of Children’s Products

The lockdown period and the closure of childcare and educational facilities encouraged people to rearrange their home spaces (designating areas for learning and play) and to purchase new games and toys. Particularly popular were those that kept children occupied for longer periods or those that interested parents (in line with the “kidult” trend in the toy market).

Demographics and the Growth of the Children’s Products Market

The biggest barrier to the growth of the children’s products market in Poland is demographics. This trend is very well illustrated by the so-called aging index. According to data from the Central Statistical Office (GUS), this index stands at 121 in Poland, meaning that for every 100 “grandchildren” (children aged 0–14), there are 121 “grandparents” (people aged 65 and older), and the difference in the size of these populations is 1.2 million, with children being outnumbered (in cities, the difference reaches 1.3 million, while in rural areas there are still more children—by 99,000).

The very low birth rate in 2020 contributed to a record-low natural population growth rate. In 2020, there were over 355,000 live births (375,000 in 2019). During the forecast period, demographic trends will not reverse. The outlook is particularly unfavorable for the number of children in the age group from birth to age 3, which is projected to decline by more than 15% from 2021 to 2026.

Forecasts

Therefore, in the coming years, the most challenging situation is projected in segments directly linked to demographic forecasts regarding the number of live births, namely: infant food, where PMR forecasts a CAGR of -3.9% for 2022–2026; hygiene products; and strollers and car seats. In the case of the latter categories, the secondary market (re-commerce) remains an additional challenge for retailers and manufacturers.

26% of people who said they planned to buy a stroller chose a used one

According to a PMR survey conducted in September 2021 on a purposive sample of adult residents of Poland who purchase children’s products (of any category), among those who reported purchasing a stroller in the year preceding the survey, 26% chose a used product (as PMR respondents operating in this segment pointed out, due to the short period of use—for example, for prams—those purchased in 2020, due to limited social mobility last year, were used relatively little and, as a result, are an attractive option for purchase on the secondhand market in 2021). In the case of car seats, the corresponding percentage was 28%.

In the other segments of the children’s products market (i.e., children’s clothing, children’s footwear, toys, and children’s furniture and room furnishings), higher household disposable income will offset negative demographic trends to a greater extent, resulting in higher spending per child.

The shift of purchases to online channels will continue

Before the pandemic broke out, grocery stores were the largest sales channel in the children’s products market. Their sales—whether on a regular basis or through short-term sales promotions—include nearly all of the product segments and categories listed by PMR. However, in 2020, following a 40.5% year-over-year increase in sales, online retail became the largest channel. Sales through e-stores and e-commerce platforms accounted for 27.2% of the children’s products market in Poland. By the end of the forecast period—i.e., in 2026—more than one-third (36.6%) of every zloty spent on the analyzed categories will be spent online.

* By “children’s products,” we mean the following items: children’s clothing (including underwear) and footwear, toys, children’s cosmetics and hygiene products (i.e., diapers, wet wipes for children’s hygiene, sanitary pads, etc.), baby food, children’s furniture and children’s room furnishings, strollers, car seats, and accessories for them.

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