Toy industry bouncing back on innovative products

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Aparajita Gupta | 29 Jul, 2013
Once reeling under competition from cheap Chinese products, the Indian toy industry that is hugely populated by small and medium enterprises (SMEs), is pulling out all stops to bounce back into children's reckoning with innovative and better designed toys. It hopes to do better in the future as Chinese products are expected to become costlier.

According to Toy Association of India (TAI) president Sunil Nanda, the demand for Indian toys is growing at 15-20 percent per year as toys have now become a lifestyle product.

The industry that has been growing in India at 20 percent year-on-year needs to focus on co-branding, corporate promotion and merchandising with firms to provide the necessary fillip to the industry, Nanda felt.

"The industry is at a growing stage and I see it at least doubling from the current levels," Manu Gupta, chief operating officer of Playgro Toys, told IANS

Though the Chinese toys remain dominant players in the Indian market, Nanda said due to the high import duty and the dwindling situation of the rupee against the dollar, the Indian market has somewhat recovered from the threat of the cheaper Chinese toys.

"China is becoming a consumer market rather than a global manufacturing hub," Nanda told IANS.

He noted that the average age of workers in India is 23, while in China it is 31-32.

"In a few years, when the average age of our workers will be 27, Chinese workers will be much older."

Raj Kumar, director, Creative Educational Aids, said the cost of production in China is going up and, coupled with higher import duties, Chinese toys are all set to become expensive. India is trying to steal this opportunity and would draw a roadmap on how to leverage this opportunity.

Raw material usually attracts an import duty of 22 percent, whereas toys have an import duty of around 16 percent.

Paresh Chawla, director, Welby Impex, said India needs to innovate more to compete with China. "India is working on that front with the Design Clinic Scheme," he said.

Industry stakeholders are also trying to work out a cluster scheme for the industry with the help of the micro, small and medium enterprises ministry, he added.

Ninety percent of the work in the toy industry is at the micro level and five percent each at the medium and small scale levels.

According to a study by industry body Assocham, the size of India's toy industry may touch Rs. 13,000 crore by 2015 compared with Rs.7,500 crore in 2012. It said the industry employs around 2.5 million people.

"The Indian toy industry has to work hard and people are trying," Chawla said, adding the toy export market is being threatened by the recession in Europe. India mostly manufactures soft toys and educational toys and exports them to countries in Southeast Asia, Africa, the US, the Middle East, Europe and Australia.

The industry is happy at clocking around Rs.600 crore business at the recent seventh edition of Toy Biz International, a business-to-business fair that saw a 7,000 footfall.

"Toys are now one of the high priority products for the upwardly mobile middle class. The exhibition was a good opportunity to showcase our products and this year we have done around Rs.600 crore of new businesses," Nanda said. This was around Rs.150 crore more than the last edition.