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MARKET OVERVIEW

1.1 Definition and scope of study

Nursing facilities (or "crèche"), also known as Early Childhood Education and Care Facilities (ECEC), refer to childcare facilities for children (up to 6 years old). This service is a substitute to schools or care taking in the family. In other words, ECECs make up the nursery industry. 

In France there are several types of ECECs depending on the nature of their managing body, including associations, a local authority, and companies. The private nurseries managed by companies are ECECs of the commercial sector. 

Private childcare facilities vary depending on their structure (multi-accommodation crèche, company crèche, municipal crèche in DSP, or micro-crèche) and according to their type of financing (PSU, PAJE, etc.). The market is in fact largely financed by the state via the national family allowance fund (CAF).

The French market is characterised by a supply-demand imbalance. Indeed, the number of available places is insufficient to meet demand. Thus, the market is only slightly affected by the decline in births, and managers have no difficulty filling their cradles despite this demographic trend. The private sector, in particular, is booming because it is more flexible and cheaper than its public competitors. As a result, the number of places offered in private ECECs are increasing every year, and the market is expected to experience an average growth rate of 14% between 2019 and 2025.

Additionally, the French market is more mature than its European neighbours, and the French offer continues to focus on diversification in order to differentiate. Thus, nurseries with original (or "different") educational projects and emphasis are on the rise. In addition, the offer is increasingly exporting its know-how to countries abroad. The major players in the French market are thus looking outwards for continued growth opportunities. 

1.2 The French market's robust growth

The purpose of this section is to estimate the size of the private nursery market in France. The first graph depicts the Economic Barometer of Early Childhood published by EY in ****; it aims at analysing the evolution of the number of places offered in private nurseries. This number of seats is ...

DEMAND ANALYSIS

2.1 The supply-demand discrepancy

The number of places in childcare facilities in France is not sufficient to meet domestic demand. Hence, the trend of a diminishing birth rate in France is not expected to influence the sector for the time being. According to a study by ONAPE in ****, **% of parents who were looking after their ...

2.2 The ECEC is the most popular method of raising a child

In ****, a survey (***) targeted at parents looked for reasons why parents choose child care. The distribution of answers is presented below:

  Reasons for choosing ECEC as the primary mode of child reception France, ****, in % Source : Baromètre économique de la petite enfance  

The ECEC appears to be the most popular ...

2.3 Public policies fall short in mitigating supply shortage

Early childhood policy is overseen by the Caisse Nationale d'Allocation Familiale (***), and in particular their family branch. The CAF therefore intervenes with families but also with nurseries as we will see later. These interventions are carried out within the framework of different nursery plans, and the plans are strategically designed to ...

2.4 Childcare is more difficult for families with lower income

In spite of CAF's financial support, families with the lowest income use collective childcare in ECECs for shorter periods of time on average than the rest of the families. This is a result of financial inability. Indeed, the graph below shows that the first quintile (***) representing the **% lowest income earners only ...

2.5 Satisfaction levels for nurseries are high

The ****, the Satisfaction Barometer published by the French Federation of Childcare Companies (***) aims to measure parents' satisfaction and assesses their expectations on childcare facilities. Close to */** parents consider their current crèche system to be better or as good as their previous one.

Parents' satisfaction with FFEC crèches France, ****, in ...

MARKET STRUCTURE

3.1 Typology of the different types of financing

In France, the financing of ECECs is quite complex. Indeed, it combines the funding of families, employers with reservations, but also many public actors such as the CAF, the government, and local authorities. The aim of this section is thus to provide an overview of the various forms of aid in ...

3.2 The three types of private structures

In the French landscape, there are three types of crèches operated by private actors:

The municipal nurseries under public service delegation (***) ;

These are traditional neighbourhood crèches, operated by a private actor on behalf of a community. This is possible within the framework of a Délégation de Service ...

3.3 Financing and income structure for private nursing homes

The diagram below provides a simplified representation of the three different actors involved in the financing of a private ECEC, and their action points at the process.

A place created in private ECEC costs €**,*** on average. This figure is half as much as in the public sector. [***] The distribution of the ...

3.4 A mature and increasingly concentrated market looking for international opportunities

A highly concentrated market

In ****, the French Federation of Crèche Companies had close to ** members for a total of **,*** places. Although some major players such as People and Baby are not members, it can nevertheless be estimated that it represents **% of the private sector's offer. We can therefore make a ...

3.5 A lack of early childhood professionals

The site Early Childhood Professionals carried out a study in **** with the aim of taking stock of the sector in terms of employment, training and qualifications. From this, it was revealed that **.**% of private ECEC managers are experiencing recruitment difficulties. Although recruitment in the private sector is faster (***), there is still ...

ANALYSIS OF THE OFFER

4.1 The challenge of differentiation

Overall, crèches offer homogenous services, apart from a few details: babysitting, early-learning games, naps, meals, etc. This makes it difficult to stand out in a competitive landscape. To differentiate itself from the competition, the offer relies heavily on the image and on the pedagogical project.

At first glance, it seems ...

4.2 Price analysis

The tariff is regulated by the CAF, so the babilou site offers a price simulator that allows us to create the following table.

Source: ****

The formula used is as follows:

(***)

Example : If a family has * children, a monthly net income of **** €, and wishes to have their child looked after * days ...

REGULATION

5.1 Legal framework and standards

Quality standards

The management of an ECEC can only be ensured by a doctor, a childcare worker with * years of experience, or a childcare worker with * years of experience in a structure with less than ** places.

If a ECEC exceeds ** places, an early childhood educator is mandatory. If a ECEC exceeds ...

POSITIONING OF THE PLAYERS

6.1 Segmentation

  • Groupe Grandir (Les petits chaperons rouges)
  • Babilou
  • Crèche Attitude (Sodexo)
  • People and Baby
  • La Maison Bleue

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chargé d'études économiques, Xerfi

Hugo Schott

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Associate Consultant

Mathieu Luinaud

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PhD Industrial transformations

Robin Charbonnier

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Analyst

Pierre Doussau

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President Ross Alumni Club France

Arnaud Walter

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Analyste de marché chez Businesscoot

Amaury de Balincourt

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Consultant

Pierrick Cudonnec

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Project Finance Analyst, Consulting

Maelle Vitry

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Héloise Fruchard

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EDHEC

Imane Essadiq

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Vincent Defrenet

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Eva-Garance Tison

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Market Research Analyst

Michela Grimaldi

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Azelie Prigent

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Cantiane Gueguen

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Consultant

Jules Decour

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Alexia Vacheron

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Emil Ohlsson

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Anna Oeser

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Gabriel Salvitti

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