Vivek Jhangiani is President, TAITMA (The All India Toy Manufacturers' Association)
Stepping into any of the toy stores in the country will surely baffle you with the endless rows of toys, with an enormous product range and numerous brands, all under the same roof. This is evident of the huge demand from the target group which is creating great momentum and expected growth for the sector in the near future. Higher disposable incomes with rise in the number of dual income parents’ increased spending on safe and branded toys, international toy makers entering Indian market and easy access to affordable imported toys are some of the factors contributing to the growth of this sector.
A recent report by Assocham reveals that the industry is growing at a compounded annual growth rate (CAGR) of about 20%. However, only 40% of the market belongs to domestically manufactured toys and the rest of the market is flooded with imported toys from countries like China, Korea, Malaysia, the UK and the US.
Although we have primarily been a trader’s economy, there has been significant growth in the toys manufacturing sector after government put strict regulations on the quality of toys being imported from China. This has given a sudden boost to the sector. The trend is shifting from a highly unorganized sector (75%), to a more organized one with big, organized retailers and even international brands entering the Indian toy market.
India can emerge as a very strong manufacturing sector sourcing base for toys, games and sports goods for both the international markets and domestic market. India’s toy industry is expected to rise to $400 million in the coming years and though currently, the industry employs about 25 lakh people both in the organized and unorganized sector, this growth is expected to significantly go up with the rising demand.
It is being eyed amongst the top players in the global market in the coming years. There are several factors which reassure us of this, most important being its demographic dividend which will add 13 million more kids by 2016 and 62 million more middle class consumers adding to its already existing customer base. Add to that, our government’s announcement of turning India into a manufacturing hub which will boost the toys segment as well. This is because it has several advantages like low cost skilled manpower, availability of flexible suppliers, policies allowing JV/ FDI and duty free import of capital goods.
Indian manufacturers already offer a wide range of products, including electronic toys, board games, construction toys, educational games and collectibles. By improving our current infrastructure, 24x7 electricity and supply of raw material made available to Indian toy manufacturers, we can focus on increasing our exports and outdo the foreign toy makers, emerging as a top player in the market.
What we need is also focus on R&D to ensure that innovative and interesting toys are developed which can make their mark in the global toys market.
Educated Indian parents are conscious about their child’s upbringing and understand the significance of providing good quality, educative toys to them. With such a huge consumer base waiting in India itself, the future of our toy industry looks very bright and promising.