c
 



  
  
  

      |
|
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 many sports and
games are been played by the adults at national and international levels representing their country and nation. 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.

The Rs.800-Rs.1200crore-estimated Indian toy industries are dominated by

approximately 1250 small and very small producers scattered across the country.
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 Upto 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.

The past one-decade has shown that the Indian toy industry makes quick strides in terms of exports and production. India produces
a wide range of toys made of plastic, mechanical activity toy, soft dolls, stuffed toys, board games, puzzles, educational games,
metal and time toys, electronic toys and games etc. It is estimated that the industry volume is US $ 1 billion in the organized sector
and about US$ 1.50 billion in the unorganized sector. There are more than 1000 units in the small sector and even a large number
in the cottage industry. With the lowering of tariff barriers, the market is open now and the Indian industries are facing the
challenge of ensuring their competitiveness in a sector where both distributors and multinational competitors are concentrated and
form cheaper products which are mainly from the South East Asian Countries. According to an estimate, the global market of toys
will touch more than US$ 150 billion by 2007 and thus realizing it's potential the Indian toy industry has correct time opportunity to
put itself on the world map. Indian toys can have major share of the world market if they are keenly based on the latest technology
and are marketed properly. By some toy industries, domestic market size this year is estimated to is in the range of Rs.500 crore
while some think that it is at Rs.1000crores.

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 Upto
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.

x 
 

The degree of competition within the industry looks at the external environment, the
number of firm, size of the firm and concentration in the industry. Looking at the
degree of competition within an industry's environment it is understood that it is
simply the beginning to analyzing industry attractiveness. The degree of
globalization is another factor that influence attractiveness, if a company entering an
industry can also enter a global market then it is attractive. The extent of
government control also has an influence on the attractiveness of the industry. The
threat of new entry affects the firms already existing in an industry and if a new rival
can easily get in then the market becomes more competitive, thus firms must put
some barriers to stop others from entering. The existing leaders should create a
brand identification, the new entrants thus will have to try and take satisfied brand
loyal customers away from the leaders which makes it a difficult task for them to
conquer. The threat of substitute products also comes into concern. If substitute
products are readily available, then the firms are likely to suffer. Since there are
different suppliers in the toy industry, the suppliers have less bargaining power
because the buyers can go to another supplier and so in the toy industries not one
supplier holds a critical component for the toy retailer. The power of buyers should also be taken as a considering factor when
analyzing the attractiveness of the industries because powerful buyers extract price concession for product thus reducing industry
profitability.



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.

c
 
  
.

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 manufacturer 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%.

Apart from that the Indian Toy Industry is very fragmented and very region based. The Indian market is largely unorganized and
the market is very small compared to the population and per capita income. Small Scale nature of business has resulted into low
product innovation and low investments in new equipment and technology, which has over all resulted into small market size. The
toy business is based on constant innovation and you need to be on your toes and produce new innovative toys if you want to
survive in the market. Another reason of small size market may be because of large number of small players and low advertising
and marketing money spent. But since the last four or five years the market has shown a healthy growth rate. The market is said to
grow at 15% to 20% per annum, which is said to be a sound situation and it is further said to grow for least five or six years.
However, the Indian market is highly price sensitive. Reduction in prices of our products has been a contributor to increase in the
sales. There are reservations in the Small Sector Industries (SSI), which the government is thinking to de-reserve which will allow
the companies to take up capital investments over Rs.100 million and also they would be allowed to collaborate with foreign
companies. In addition, the formation of task force by the department of SSI has proved to be a positive development. Many toy
associations of India in association with others has started funding programs for providing good infrastructure which at present is
very poor compared to China who has developed strong manufacturing facilities and infrastructure. Funding is also required for
improving technology and quality standards. In addition, sufficient amount is required for brand building, which is a challenging
task for Indian manufactures in view of the size of the industry. Brand building is an expensive option and requires deep pockets.
Returns on investment have to be spread at least over 5 years. One even requires being financially strong in order to face
international competition, so these funding programs with the help of associations will definitely prove to be a growing point for the
industry. In addition to this, with the advent of multi-format retailing and mall concepts taking place in the country the reach of
toys is increasing. Also Free exports were there from first, which has helped in boosting the industry further.

 !!"# 

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.

 

   

 

  
 




  



  

   



   


   





 

 

 


     
 
|

|
|
Slide 2:
c

c 
 

c 

   

  ! "#$%"&&&!& ' (c )
*( +(
 +#!c '#
,
 '* 
c "'

Slide 3:
c-./0
1
#-2/.3
1
-.4/.5
1"" 
c6  * 7

 (  6 '"*
)
$ $c$ $  $  ! c$  "8     
 #$ c !

Slide 4:
9: 
c6 +
   (

c.;5<&'
$ c *    
$ $#=#  8  >/
   /
 $ #
 

INDIAN MARKET SIZE :
9 /34?..<<<9  (/.5?@.<<<c$$ /?45&<<<  
 # ?02<<$c 
c#8 A-3<<51B32<<$ $B.<<<$ A
$B.2<<$ A$$ $    c c( *(7
cC #$B
$$  ' 

DISTRIBUTION CHANNELS :
c
c9
c ( '

STIFF COMPETITION FROM CHINESE MARKET :
 cB(D # $! $ $!$   #$#Bc &$  
#$    ' BE# $!$c #8 #F#  .;;;/3<<4Bc 
  .?3   ! 5<G!  #H5  
& c   3<<5$#.?2  
c++*"
c
c +*c  *(7


INCREASING AWARENESS :
@2G c *!$ %.0G *#$###&## !6
  !##$# $&#$##$*8$  / 3<<I
   $c !c$F# $$ !#$/F# &
c  (c )( ( 

CHANGE IN PERCEPTION :

  ## c 
   #8 c       
&!  $ J4@<&" 4& 8   c #$#! 
$ $  #$"8$  BKc #$$## 
#$?L
 ! c 0?5   3<<I$$@?3  3<<5( ) c 
"  "
c 

REASON FOR DECLINE IN SALES :
   !)# !+ # F#  9
 F# #$ $ $ ( + 'c c (' 

FUTURE STRATEGIES :
      $  (    # 
     +
 
(
)c 

THE FUTURE - TOY SALES FORECAST :

 +
 /

(' + (


THE PROSPERING INDIAN MIDDLE CLASS :
40G $  5<&<<<.5<&<<<# $#     $ 
!7$$/   $&$#$ , $$&$   $

! c 3;?5   3<<I$$42?2   3<<5c#  M3<G
#
 "" c )c c( *c' '(

Slide 14:
*  "$"  $ $  $ $ (#!   
"*
>
(6 
c *
( "*
c 6 *! 9, (E# AA" * "

|

|
 c
 c
 
 |
|
There are a few things that go through every child's mind and playing with their favourite toy is one such thing that is on the top of
their priority list. Each child always looks forward to returning back to his/her home after school hours just to be close to their
favourite toy and spend time fiddling or playing with it. Some children preserve it as closely as if their life would depend on it. As
times have changed, children's demands for toys have changed too as now they no longer love the usual run of the mill toys. Since
the world has become techno-centric, with each day seeing the introduction of a new electronic toy or game, children too have
become fond of the latest version of their toys. With these changes also have come a large variety of toys in the industry.

c
 

  |
Since 'Action Man' replaced 'GI Joe' and mini-motorbikes and teddy bears started acting as toys, the market has seen a northward
shift in sales of toys. The domestic Indian toy industry is now worth approximately Rs. 1000 crore and this important fact goes on
to rub in the fact that innovation indeed is the order of the day. Toys, unlike in the past are now sold around the year. At present,
40 per cent of the sale happens during festivals and another 40 per cent during fairs and exhibitions. The remaining 20 per cent is
round-the-year sale. The industry is growing at 20 per cent annually and approximately one-third of it is unorganized. Also, the
Chinese angle as always plays a huge role. Their toys have flooded the market during the last few years. Sold at an average price
of Rs.35/- by the hawkers on the city pavements, these innovative toys find tremendous customer interest. When it comes to
electronic and battery operated toys, China still rules
the roost even though the domestic manufacturers
have hit back at them in some other categories of
toys in the recent times.

|
c
c c
  
 c 
c#8! A #?32<.<G
Size of the Industry| $ # A$;<G$ ## A
$?|

Geographical distribution| *# &7!& &9&"#D&$|

c 
c#  ?5<</?.3<< $ 

Output per annum|   .32<#$
$$$#?|

Percentage In World
c  #  #52<  

Market| # <?2$!|

c 
c# .2</$ 32G

Market Capitalization|
#  c ?|

||

|
 |
&#$&&$!&#  $!&#
&  #$ 8 
# &#!?
c #$ 
  c $ $! 
#&$#!?   
$$ "# -
  #1 $
 & # $ '#$!
-"1) -*
"1$##$ #?
&&
!    $/
| #$# ?|

( 9 $#$& '!$ #  $!?' !
$!$##$ A  D$&N!#A N-   #c 1
$$#    $ $#  $?
 $
 #?
#$  ### $!& /$$
!  $$# $#$#?c  )N!   
  /!  #$ !/  &#    &
 F# ?#$ * $?(9/ ) $$$#$  
 $/ # &7!?+$ c   
! ?  A !!  # !& )
#$ $* ?|
 |
 |

 

|

c 
 #   $

 A$$$$  # 
,! ?*## #
# ,* ?
 !  
 $!#c !  
  $ $c  
 $ ##?$ $ D#
$  #?|
|

c 
c#  # # A! $

# $  $?

#  $  
 $ $##$  #  !? $# 
c 
c#?
!  .2G3<G#& $ #
 #   #    ?(c !   $  &#$  
 $#$#$ # $ ?|

($c#  ?
 A!$ #?0?2  ?

 $   ##$ # ?
# 
*&'&&9 ?*
#$# ?9 : 
#?* c  $.;52O #9 & &9&$?

* H@9  $# $ ! c  #3<G?
c 5<<c 
#$#&# ?c 
$$  ##$ ?

 $  c  $#&$#&&$ $&$?|
|

è |

 
 


|

c 
c# .2</$ 

32G#  c ?c  
#$  $F# & $ #$
&c / 
  #?|

* F#    c $   ?($$ 
* $&#$ $$# 3<<&<<<32<&<<<-H.P031 # $
?|

0
| ||

 |
c 
c#8! A #?32<
.<G$ # A$;<G
$ ## A$?c !5
7 !.
c# ?(
c ! 32<&7! 
35.H-.0<<<1?+#!! c 
4<G?

($  c  #;<
Gc  #/ 
$?|
|

 | 



||| 
|  |

c 
c#  ?5<</?.3<<   $   .32<

#$$$$#?
#$  &*# & "#D&
"& #
 # $#$c N$?c 42
/0<$#$# # $ $   #4<$!*# #.<$
!?|

 

|




| |

c 
c##   #$  &$/#

$?
c ##  #$$  $##
   $##?|

£ |

| |

? (c N  "#$  #$ #  $#N/#$# 
#   $ ## 
$ $$   ?|
? c3<<@ #  .2<G$%;2  ?|
?

c 
c# #c 0&<<<$& c .&2<<$ $
c 3&2<<$  $?|
?
($  c #$#$#  $!
#@<G;<G //#.&4<<$! 3<G?

 $$#$##$  ! ?|
?
c $?.<<<$
c# #$ !#&$ $&
#&#$ &$&$?|
?
c $ $D# A$ $$ ##I<G
# $#$$#.2G?|
? c 
c#   $# ?*9 $& $  $ 
 $$ $6  $c$ ? $6  
$    $?|
?
c    $  # &
 #+&*)*&c

 & *$c"#$   $c$    
$ $!  # ! $ $(- (1 c$ 
# ?|
 |

å
å 
 






  
 



X å



  
 

å
å å


 
 





X å








 
 

 






 !
 




!

 

X å



  


 

X å


 

 


 






 
"#


X å

å$
%





 

 



å

å
å !



 

X å

& 
 




'
'

'

'



  
'
'
å

 
 



 




X å


(
)


$ 


*
 )
å '+', 
( 




X å
 


  

 

)
 

- 

 å
 






, 


X å




(

$ 




X å



, ( 
 



 

( '

å
.
, ( å
/ 

X å
   


 

 
å
å 

X å
, (

&
+
 
å,   
 å
 
 
 



  
 


X å
0(







X å
 





 


å
å 






 








 


X å








 
1
 


2




 




X å


 



å
,



  


 å 
|