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Toy joy

Branded toys are flying off the shelves as modern retail gives them visibility and consumer access. Awareness of toys’ benefits in children’s development is providing the big push.

business Updated: Dec 19, 2010 21:41 IST
Rachit Vats

Estimated at around Rs 3,000 crore and growing at 25-30%, India’s toys market is attracting international toy makers with their branded, higher priced products. While Mattel has been around for a while, Hamleys and Toys R Us tied up with Reliance Retail recently to enter the market. Other major entrants have been Funskool (in a 60:40 joint venture between MRF Tyres and USA’s Hasbro International), Disney, Simba, Leapfrog, Spinmaster, Jakks Pacific, University Games, Moose, Vivid and Lego.

With the unorganised sector still dominating the toys category at a 60% share, organised sector toy brands believe there is that much more opportunity to exploit, as parents (especially urban) get more conscious about health hazards and quality issues in toys, and the contribution toys make to their children’s overall development. The growth of modern retail has given a huge boost to the organised, branded toys industry.

“Mattel has seen strong demand upswing on the heels of increased consumer income and influence of kids on household purchases. Demand will be there for high-quality safe toys with a strong value proposition for parents. As overall increase in disposable incomes combines with the rise of retail across the country, we can witness the establishment of new cost-value paradigms in this segment as well,” said Rahul Bhowmik, head - marketing, Mattel India.

Toy stores such as Hamleys (in partnership with Reliance Retail) are changing the landscape with their large and dedicated space for toys. Hamleys plans to open at least 20 stores over the next five years. The size of its store in Mumbai is around 21,000 square feet.

“It’s going to be a fantastic, exciting stage in our international development and we are sure that our Indian customers will love the magical elements of Hamleys, which guarantees the best of past, present and future for all children (both young and old),” said Paul Currie, trading director, Hamleys.

In a distribution tie-up with Funskool, Lego is also planning to expand its impact in India. With pre-school education in India getting more professional, learning while playing is an idea fast finding appeal with parents. Earlier, Lego was marketed by Mahindra Intertrade, a trading subsidiary of Mahindra & Mahindra. Lego is currently available at around 150 outlets.

Funskool also has tie-ups with German toy maker Ravensburger for jigsaw puzzles, and Walt Disney and Warner Brothers for board games and puzzles. Tomy, a Japanese brand, has also tied up with it. By now, Funskool has developed a formidable reputation for education-related toys and learning materials and is present across close to 4,000 outlets, according to published reports.

Bookstores such as Landmark and Crossword have toys and games as the biggest contributors, after books, to sales.

Toys and games are a complementing category for kids’ books. In the recent past, it has become one of the core categories for us, registering 30% year-on-year growth,” said Rajaram Velu, head - merchandising (toys), Landmark.

As the market for branded toys picks up, more international brands are expected to come in. “In the last five years, the market has changed a lot. European players are coming in good numbers through the import channel. With higher prices, branded toys are catering to the upper middle class and above,” Velu said. Landmark has 17 stores across India and has dedicated December to children, with special activities and discounts on toys, games and books.

“The last quarter of the calendar year is always exciting for the toy industry and it has Diwali and Christmas vacations; toy companies focus on consumer promotion during this period,” said Pradeep Parmar, India representative for German toy maker, Simba Toys. After completing a year in India, Simba is now evaluating a manufacturing base in India and aims to bring more of its ‘educational' toys such as board games and activity-based art and craft brands.

“We now service about 1,000 stores pan-India. Going forward, we will have to focus on specific niche segments to service our customers,” said Parmar. “Modern retail for toys is growing and we see the rise of specialty toy stores in the future. For the size of the Indian consumer base, it is important to set up manufacturing in India.” Simba Toys is the exclusive licensee for the upcoming ICC Cricket World Cup. It will provide toys and merchandise to enhance the game’s experience.

Zapak Games, the licensing and merchandising arm of Zapak Digital Entertainment, has distribution tie-ups with many toy makers including Jakks Pacific and Spin Master. “Organised retail is bringing in tremendous growth and international players are helping open up the market,” said Vaibhav Odhekar, business head, Zapak Games, which caters to 5,000 touchpoints.

The Walt Disney Company (India) has started its e-commerce initiative to retail toys and games online. The reason, says a company spokesperson, lies in the growing e-commerce culture in India, and the growing interest in toys.
Toys and games are appealing to consumers across age bands. “Games such as UNO, Scrabble and Pictionary particularly tend to be quite age- and gender-independent, so growth has been driven across a wide variety of consumers including kids, youth, families and young adults,” Bhowmik said.