Millennium Post

In the world of kids

Move over Santa Claus, The toy makers are here, could have been the slogan of the third edition of Kids India – an international B2B event for the toy industry – which highlighted a melange of colourful toys and other forms of the megabucks children’s entertainment in Mumbai recently, supported by the Indo-German Chamber of Commerce, Sports Goods Export Promotion council (SGEPC) and the All India Toy Manufacturers Association (TAITMA).

Spread over three days, the event provided an industry platform for meeting of international buyers and purchasing decision makers from large retail stores, departmental stores, stand alone outlets, premium stores, distributors, retailers, e-commerce, catalogue retailers and wholesalers. The opening day witnessed about 150 industry exhibitors presenting their products and services across various product groups such as soft toys, dolls and role-plays, educational toys and games, learning and experimenting games, puzzles, cards, children’s books and music, electronic games, multimedia and many more.

  Apart from a networking and business platform, the exhibition also offered an extensive and high profile knowledge, training and education program. The event organisers said that judging by the overwhelming response Kids India 2015 received, it is clear that local and international companies foresee unique opportunities in the domestic market and are planning to expand their footprints at a pan-India level, indicating a highly competitive scenario. The toy sector in general is expected to undergo changes in the next few years, and e-commerce will continue to gain in importance and play a major role in extending the reach of manufacturer’s beyond Tier 1 cities. Kids India is expected to play a crucial role of a facilitator and a harbinger of latest trends and innovations from around the world.  

The market size of the Indian toy industry, which is currently projected at $400 million, is expected to increase to $450 million by 2017. The tremendous growth of the GDP and the organised retail trade highlighted India’s increased consumer spending in the middle income group, besides offering attractive opportunities for international companies to enter the Indian market.

In recent years, cities like Ahmedabad, Bangalore, Hyderabad and Pune have emerged as important manufacturing hubs for the Indian toy industry. For a market as wide and varied as India, there is space for traditional, local toys and international players, with customers actively looking for new content. Local manufacturers in India though are still focusing on the production of low-priced and unbranded toys which appeal to the price-sensitive Indian consumers. Lack of adequate finance and dedicated zones for toy manufacturing are some of the other challenges affecting the growth of the domestic  toy industry. It is however expected that these companies will shift towards branded toys to stay competitive with international companies in the coming years. 

Vivek Jhangiani, President, The All India Toy Manufacturers Association (TAITMA), noted that the Indian market is growing and becoming more global with wide variety of products and to be able to compete and thrive, Indian manufacturers are being innovative, creative and have also focused on the quality and safety of the products which are on par with the best in the world. “The growing prosperity of the Indian population is helping the toy economy to grow and we believe this is a sustainable trend, which will persist even during times of economic slowdown as buying habits evolve. There is an enormous potential for Kids India, which offers the Indian toy industry a professional forum for consolidating and expanding its business success,” he said adding “Most of Indian kids today spend time watching television while the parents are apologetic about not spending time to play with them. It is so critical to have good toys for kids as they are also a medium to educate the children.”

Describing Kids India as the right platform for the Indian toys industry, Jhangiani said India presented a 350 million Euro market for this industry, while the big toy markets globally included Europe (16.5 billion Euro), USA (15.6 billion Euro), Japan (4.3 billion Euro), China (3.9 billion Euro) and Brazil (2.2 billion Euro).

He said 75 per cent of world toys are made in China and manufactured on OEM basis for foreign brands. However, lots of challenges had emerged for the Chinese toy industry, where the government had changed labour laws while allowing formation of unions and courts to help manufacturers move away from low value to hi-value products. This presented an opportunity to Indian toy manufacturers, besides also the fact that many Chinese manufacturers were looking at setting up their production facilities in India. 

Replying to questions, Jhangiani told Millennium Post that the Government has exempted excise on toys but not on things like chess etc. “There are lots of anomalies that we would like to get corrected. The support is there but needs to be even more  deeper to help this industry to become a top global player.  Now there is more organised retail attendance in terms of exposure for Indian toy manufacturers  even as more and more buyers come in and visitors from abroad keep increasing in numbers.”

The challenges facing the Indian toy industry are ‘scaling,’ remarked Jhangiani. “There are antiquated labour laws where production is concerned. For example, in China where a factory of 8,000 workers is considered small-scale, in India it is considered the reverse. While we still have Mom and Pop shops in India, the biggest challenge facing us is getting the products to the consumers. We need to have more outlets that can help reach customers and online platforms help in this regard.”

To a question about threats being faced by the Indian toy industry, he said this came from: mobile gaming, Ipods etc. “In the USA, kids wish list comprised of mobile gaming, ipods and so on but traditional toys have held their own in India and elsewhere as studies showed that kids were prepared to play with other kids having traditional toys.

“About 20 per cent of the Indian population is between 1 and 12 years of age, but barely 20 per cent of the market volume of toys is generated by Indian toy companies. India is a very price sensitive market with the growing middle class in urban areas becoming more and more brand and quality minded. However, while there is more focus on “Make in India” where the infrastructure begins to grow, unfortunately toys are not being put in the pricing sector and is hoped to be included later. Also, if we can manufacture about 10 per cent of what China makes, then we can export abroad. Some Chinese have even started sourcing from India. Today Indian toys can compete with the best of global ones due to our quality control in its manufacturing. Besides, there is also room for improvement in sales as we have the advantage of reasonable pricing.”

Pointing out that the toy industry globally was very underestimated for its physical, mental and social-skills-related benefits for kids, Janotta said “We wanted to have an exhibition platform for toys in India and hence started this venture three years ago with success over the past two years. The third one (2015) was an even bigger success with the event being sold out. We had 18 producing groups here where the focus really was on educational toys. Today we are even coming out with 3D printing solutions for the toy industry where children can even make their own toys.”

The sustained increase in the number of exhibitors and visitors demonstrates the growing importance of Kids India as an effective marketing and communication platform for the Indian toy industry. With more than 150 exhibitors from 13 countries and more than 350 brands on display, the current edition is bigger and better than last year with even more innovative products and trends on display.

Tarun Dewan, Executive Director, Sports Goods Export Promotion Council (SGEPC) described Kids India as “The perfect forum for the Indian toy industry to showcase its expanse to the world and serving as an excellent platform for presenting Indian-made toys to the world. We are certain that the reimbursement programme – which has been offered to international buyers this year – will attract even more foreign buyers to India and boost exports. This support from the Indian Government for Kids India clearly  illustrates the growing importance of a toy trade fair and the need for an annual conclave like Kids India.

The organisers said that judging by the overwhelming response that Kids India 2015 received, it is clear that local and international companies foresee unique opportunities in the domestic market and are planning to expand their footprints at a pan-India level, indicating a highly competitive scenario. “The toy sector in general is expected to undergo changes in the next few years. E-commerce will continue to gain in importance and play a major role in extending the reach of manufacturers beyond Tier I cities. Kids India will play a crucial role of a facilitator and a harbinger of latest trends and innovations from around the world.”

Addressing a seminar on “Future of Licensing in India” as a panelist, Sharad Devarajan, Co-Founder and CEO, Graphic India stated “With 600 million people under the age of 25, the youth of India will transform not only India’s entertainment and merchandising landscape but also the world’s. Yet despite having the world’s largest youth market, India has one of the smallest shares of the annual US$100 billion global character and entertainment licensing industry. For the Indian character licensing industry to rise, the entire eco-system needs to work together, and fortunately ‘Kids India’ is one of the rare conferences where retailers, manufacturers and IP owners can discuss opportunities, challenges and collaboration to move India forward. I am honoured to have been a part of it.” Special set ups like matchmaking centre to facilitate business networking and solution was well-received by business visitors, while the urgent need for development of manufacturing zones and favourable policies relating to custom duties on import, sourcing was unanimously highlighted by all participating brands. 

Commenting on the issues that plagued domestic SME’s, Sarabjeet Singh, CEO, Centy Toys stated “High custom duty on imports of raw material and machinery suitable for toy manufacturing from PR China, severely affects a very price-sensitive domestic market currently influenced by rising number of distributors importing products, mainly from PR China. A platform like Kids India offers a lot of potential for the domestic SME sector to network and display quality products”.
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