The demand for toys is looking up once again after receiving a setback from COVID-19. Here R Jeswant, chief executive officer, Funskool India Ltd., one of the leading Indian toy company talks of future changes in the industry. A veteran of the Indian toy industry, Jeswant, who is based out of the company plant in Corlim, talks of the beneficial impact of the three-day national toy fair organised by the ministry of MSME that is presently underway and due to end tomorrow. He says to Shoma Patnaik that, COVID-19 took a toll but sales have already started picking up and the future is bright for all toys and games
Since we are in the early stage of 2021, how does the year look for the Indian toy industry?
The year 2021 in comparison to 2020 is going to be much, much better. There is no doubt. Right through the current year of 2020-21, there have been disruptions due to the lockdowns. Many markets did not function in 2020, the malls were closed for long period of time and when they reopened the footfalls were less. Toy companies had a very bad start to the year. So overall 2020-21 was not a great year but after the first shock the situation slowly improved. The recovery began from September 2020 and I am sure 2021-22 is going to be much better.
Has the market started reviving for toys?
Yes but what the industry lost is lost and even December was not as good as it is normally. In many ways we are presently below par. Overall I would not say that the industry is fully recovered but almost close to it. As far as Funskool is concerned our exports were substantial so it made up for what we lost in the domestic market. In the current year our exports will be at least 25 per cent higher than the previous year.
The Prime Minister wants the Indian toy industry to become atmanirbhar and aim at vocal-for-local? How much of this is feasible?
The market for toys in India has been dominated by imports. Estimates vary but according to me about 65-70 per cent of all toy sales in India are imports. We are a very small percentage of the world toy market right now. The Indian market size is estimated around Rs 3500- 4,000 crore or $ 450 million vis-à-vis the world toy market which is $ 90 billion. It means that, India’s share is just 0.5 per cent of the world market. The Prime Minister talking about toys in mann ki baat is a big boost to the industry. The industry never had that kind of focus before the Prime Minister spoke about it. And all the ministries have been working overtime to give the industry a fillip.
There have also been measures which started even earlier. In the Budget 2020 the government hiked the import duty on toys from 20 to 60 per cent which made imports expensive. It brought down Chinese imports and benefitted domestic manufacturers significantly
Do you see India’s miniscule share in the world toy market increasing in future?
It definitely will happen and already happening. The Indian toy market is growing faster than other markets. We are so small and with a huge population and so there is definitely potential to grow. In the next 10-15 years, companies expect the market to have a CAGR in double digits. With all the attention the industry has been receiving lately it will definitely pick up. A major problem faced by domestic toy companies is that awareness about toys is very low. A large percentage of parents have not played with toys, especially branded toys and therefore they really do not spend too much on toys. Toys are an impulse buy item for many. The scenario however is changing. Today we are seeing new generation of parents coming to the market who have higher exposure to toys. They are buying more toys
What about the unorganized segment of the toy industry?
The unorganized segment is very big and comprises 65-70 per cent of the Rs 3,500 crore industry. The distinction between organised and unorganized is blurred. I would define an organised company as a pan-India player who sells through regular toy stores. In India at any given point of time there are thousands of village fairs and countless number of unorganized players. The Indian toy industry is evolving and as the market grows more units will come in the mainstream and be included in the organised segment. The union government has imposed BIS standards from January 1. So if any toys are imported the factory has to be certified by BIS. Quality consciousness is coming in the industry which is good.
What is the future of traditional toys considering that children today are in the digital era and drawn to mobile games and you-tube sites?
The ‘digital’ argument is flawed because going by the trend the more developed a country is, the higher is its penetration of toys. The biggest chunk of the toy market is infant and pre-school where parents do not want the influence of mobile games. It is not as if traditional toys will disappear. You can play board games on the mobile phone or on any other platform but it is not the same. Increasingly parents want to play board games with children because it provides family bonding. In fact in COVID, toy companies across the world witnessed spurt in sales of board games.
What about Funskool range of traditional games?
Funskool is upbeat on traditional games. We are launching 15 new toys, of which three are traditional sports converted into board games such as kabaddi and kho-kho. We will be shortly launching more board games based on traditional sport such as gilli-danda, lagori (seven stones), puzzles on Tenali Raman, Panchatantra tales, etc. We have lot of traditional Indian games in our range.
Tell us about Goa operations of Funskool India?
Goa is our first plant and also the biggest plant of the company. The plant contributes close to 45 per cent of the total production. It is a very important plant for us and employs 400-odd labour and about 70 staff. Altogether the plant has about 450-480 employees. We are adding to the machinery in the Goa plant in the next two-three months and in fact adding capacity in all our plants.
What is Funskools market share in the Indian toy industry?
It is very difficult to say since there is no official estimate as yet on the size of the market. Funskool is a leading player in the Indian toy industry. The company recently won the EEPC top exporter award for being the largest exporter of toys in India. We are also a strong player in the domestic market with more than 30 years of standing in the industry. Funskool exports to over 25 countries. The company is a manufacturer for several international toy companies. It reflects our standards in manufacturing capability. In the current year 2020-21, for the first time the exports will be bigger than the domestic sales. The share of exports is going to be about 60 per cent. Next year it should be in 50:50 ratio.
Are toy fairs important to boost the industry?
Absolutely important because it provides the platform for companies to showcase their range and manufacturing capacity to international buyers. So many companies are participating in the ongoing toy fair. There is no doubt that it is extremely useful.