The very word toy makes you remind of your childhood. They are categorized into many types like the major rulers in India are the plastic toys which capture 80% of the toy industry and is said to earn a profit of approximately 10-20% every year. Another types of toys available in the market are fabric toys, paper toys, and wooden toys, metal toys and DIY toys(containing arts and craft toys) that are manufactured mostly by the cottage industry.
However, out of these the metal toys are considered to be sharp toys which are harmful for children and a hindrance in their safety, that is why these toys are known to be slowly loosing it's popularity. Another popular category of toys seen today are educational toys and activity toys which help build the mind and body of the child, then there are soft toys, electronic toys, battery operated toys and board games like chess and monopoly.
Toys these days are popular not only with kids but adults have also entered this field through the medium of sports and games. Today the adults at national and international levels representing their country and nation are played many sports and games.
Also ultimately it is the adult's decision of which toy to buy for their child. While the end user is a child, the mother is the decision-maker and the father holds the financial strings. Parents, now-a days also prefer to play with their child in order to interact well with the child. So, they are seen to playing boards games and other toys with their children. The Indian market is vastly different from that of overseas, where toys are bought as a child's development aid, i.e. they are considered to be equivalent to books.
But in India the scene is different. Content and quality are the major drawbacks here. Unlike other developed economies amount of toys spent per child in India is very low. The metros and 'A' category town account for most of the branded purchase and sell even at higher price points. Largely the rest of the market is highly price sensitive and items above Rs.200 results in planned purchase and not impulse buying. In C and D category towns, unbranded and lower quality toys sell at average price points below Rs.100. However, the scene over here is slowly changing but still it will take a few years more.
Approximately approximately 1250 small and very small producers scattered across the country dominate the Rs.800-Rs.1200crore-estimated Indian toy industries. Most of the producers are based in the Delhi, Mumbai, Northern State of Punjab, Uttar Pradesh and Haryana, also some in the Southern State of Tamilnadu and in other clusters across India's central states. It has a 35 - 40crores manufacturing base out of which Delhi especially Noida rules 30 crore markets and Mumbai rules the other 10 crore market. The Grey market and other small-unorganized sectors dominate the rest of the markets.
Major multinationals such as Lego Toys dominate the most of this sector. Lego itself controls 20% of the domestic market; another player is Leo Toys, which is largely credited with pioneering the organized toy market in India. Funskool Toys is the third largest toy producer. All three big players have linkages with Indian multinationals, with a collective market share of roughly about 16% of entire toy sector. Apart from these, three there are many other players like Chirantan Enterprise, Plastech International Pvt.Ltd., Aries Inc. and many others who run the toy market in India.
The Indian toy industry is large and growing, but it is disorganized and there are some serious problems to be navigated which also takes into factor distribution & marketing challenge. Many of these toys are routed through Dubai & Malaysia. Even as the Cheap Chinese toy market are flooding the domestic market having said that we do design or modify some games to reflect Indian taste in them is absolutely true. Some games we import are slightly modified to Indian interest i.e. we have a slightly Indian taste monopoly. Social relevance is another factor that is being used.
Like many other industries, the Chinese factor is a major issue for domestic toy manufacturers, which has resulted in a chaotic market condition. Chinese and Taiwanese manufacturers have been innovative and specializes in novelty items which last approximately ten months. These are of cheaper quality and hence less expensive which quickly captures the interest of the Indian buyer. As per the sources last year, the Chinese exported around $ 8 billion worth of toys.
Indian imports this year will be around Rs.150crore, which is nearly half of the domestic toy market. But sources say that Chinese toys will be an issue for the domestic organizations for roughly another few more years before the customers will turn away from poor quality as the issue is not only cheap toys but also counterfeits which impact the legal licensee of a toy.
Also Chinese toys that are currently imported do not have much content and so the question of threat has not crossed it's limit as yet because most importers are first timers and they discard toy imports due to poor margin. But if not taken care for Chinese products will turn out to be the biggest threat when toys with good content are made.
Tax Barriers
Though the government has removed excise from most parts of the toy industry the VAT which is 4% and 12.5% for battery operated toys along with Octroi, which is 4%, remains a dilemma to be solved by the toy manufacturers. The problem is that major part of the industry is unorganized and these unorganized players are known to bypass tax ultimately leaving the burden of taxation only on the organized sector. The organized sector suffers due to this, as they have to sell their products at more prices in the market. However, toy associations like TAITMA and others are trying their best and are appealing to the government in eradication of the taxes.
Indian Market with Global Scenario
The toy Industry across the world is highly fragmented. The present size of the toy market can be estimated to be about Rs.4.5billion. The biggest problem in estimating the size of the industries is the presence of large number of very small players. Besides there is no excise imposed so even the figure of production are not available. Four very large players have global operations namely Mattel, Lego, Hasbro, and Bandai. Mattel Toys are the largest toy manufacturers in the world. Bandai of Japan & Mattel have a strategy alliance worldwide for marketing each other's product. Mattel has been in India since 1985. The company sells toys under the brand name of Barbie, Hot Wheels, Star Beans etc. The Mattel Company is a $6 Billion company out of which their market share in India is around 20%.
Global 2007 Estimation
As per the talks in the market, it has been estimated that the global market of toys will touch $150 Billion by 2007. The toy industry in India since the last one-decade is also seen making quick strides in terms of production and exports and it now produces a wide range of toys. Though it's ups and downs does affect it's market condition and despite of going through a turbulent period overall it is said that the Indian toy industry is slowly developing and climbing the progress steps locally as well as globally.
Author Resource:-
Karishma Roy works at Netlink Solutions (India) Limited as a Web Content Writer
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