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Indian toys to breathe fire at Chinese dragon

Mattel's withdrawal of 9 million toys from China, because of excessive lead, might be a huge blow to Chinese. This is also bound to speed up the shifting of toy manufacturing from China to India, report Lalatendu Mishra and Yashwant Raj.

business Updated: Aug 19, 2007 02:03 IST

Every time you press the tiny lever, the doors of the plastic hut fly open and a cute puppy — always a Dalmatian — springs out, grabs the coin and is gone before you can say “Hey”.

This Puppy House Money Bank is at the centre of a most remarkable success story in Indian business lately. This inexpensive toy led the fight-back of the domestic toys industry against the rampaging Chinese.

At the peak of the dragon onslaught — 1999-2003 — India was importing almost 1.2 million (12 lakh) of these from China every week. Today, it’s down to zero; they are all made in India now.

“In fact, the Chinese exporter (of these banks) is now dependent on Indian manufacturers for his supplies,” says Paresh Chawla, president of the Delhi-based Toys Association of India.

Starting in 1997, Chinese toys flooded India, flattening all local competition. Many Indian manufacturers shut down and switched to retailing. Very soon the dragon had cornered 80 per cent of the market. The Chinese toys were cheap and pretty (because of excessive lead, it’s now been found). And they came in bulk. Indian buyers never had it so good — being able to afford imported toys had its own high.

Chawla draws a grim picture of what this frenzy meant for people in his trade. There is a Toys City in Greater Noida, which traces its origin to those troubled days. It was meant to become a toys hub.

“We had received 118 applications for plots in the complex,” says Chawla. That was in 1997. “Very soon, 80 of those applicants surrendered their allotments. They didn’t see a future in toys.”

But help was on its way. Ashok Jain, secretary of All India Toy Manufacturers’ Association, said the Indian government and the United Nations Industrial Development Organisation (UNIDO) helped.

“UNIDO helped us in technological up gradation and provided us financial help to acquire necessary technology from reputed global suppliers — the same technology being used in China,” says Jain.

And the turnaround began. Indian toy-makers began beating the Chinese in boardgames, puzzles and tin collectibles (the last has a huge market in West European countries — mostly with nostalgic older people).

Indian toys were not competing with the Chinese all over the world. But Jain is confident of beating them any day soon. Indian exports have doubled in the last four years from Rs 200 crore in 2003 to Rs 400 crore now.

China is now taking a beating on quality front. And Indian toys industry is hoping to ride this to even better trade figures. American and European toys chains have been looking at Indian as an alternative.

A huge blow — and perhaps critical — for the Chinese might be the withdrawal of 9 millions toys by Mattel. “This is bound to speed up the shifting of manufacturing from China to India,” points out Chawla.