IPO-bound Firstcry to expand operations in Saudi; allocate Rs 155 crore
Brainbees Solutions, the parent company of the childcare products brand Firstcry, is planning to expand its operations in Saudi Arabia. This move comes in light of the higher average expenditure on childcare products in the Kingdom, which is nearly eight times that of India.
The Softbank-backed company, which submitted its draft red herring prospectus (DRHP) in December, intends to allocate Rs 155 crore from its initial public offering (IPO) proceeds to enhance its presence in the Gulf country. Already a prominent player in the Saudi market, this investment will further strengthen its position.
According to the DRHP, Firstcry aims to invest Rs 73 crore in opening 12 new outlets across Saudi Arabia. Additionally, the company is looking to invest Rs 83 crore to establish a warehouse facility spanning 250,000 square feet. This facility is expected to boost both distribution capabilities and offline presence within the Kingdom.
In India, Firstcry operates 936 retail stores, supported by a network of 80 warehouses and stockists. It is recognised as the largest multi-channel retail platform for children’s products.
The expenditure on childcare products per child in Saudi Arabia stands at approximately Rs 60,000, in stark contrast to about Rs 8,000 in India. The Kingdom also has a relatively high birth rate of 17.5 per thousand in 2021, surpassing India’s 16.4 and significantly higher than China’s 7.5.
Saudi Arabia is the largest market for childcare products within the Gulf Cooperation Council (GCC) region, with an estimated value of Rs 49,400 crore ($6.2 billion) in 2022. This market is expected to grow at an annual rate of 4 per cent until 2027, potentially reaching between Rs 59,000 crore and Rs 63,000 crore ($7.4 billion to $7.9 billion). Factors driving this growth include the increasing penetration of e-commerce, higher employment rates, growing parental concern for children’s health and safety, and a wider range of convenient shopping options on online platforms.
In Saudi Arabia, FirstCry faces competition from organised online retailers such as Amazon and Noon, as well as from niche market players like Mamas and Papas, and the Landmark Group’s Babyshop.
