Shree Narayan Sabharwal, Director at Simba Toys India, has been steadily paying less for his consignment of toys from countries such as Germany, France and Spain.
Being a 100 per cent imported brand, Simba has not been able to benefit from the depreciating yuan since the rupee has also dipped versus the dollar making it expensive to import from China.
“Till last month, the euro was depreciating against the rupee and our consignment orders from Europe have been getting cheaper. Now the major banks forecast the euro to stabilise at ₹70 and we are going by that. Almost 60 per cent of our imports are from China but this will get reduced as buying from Europe is going to be cheaper. It is clear that from now on we will be riding more on European brands such as the UK’s Smoby and Denmark’s Lego and their share will go up at our stores,’’ says Sabharwal.
“This year our imports from Europe will go up to 50 per cent while at the same time we will gradually try to set up a manufacturing base in India,’’ added Sabharwal.
Even domestic players such as the ₹150-crore Funskool, a joint venture between Indian tyre major MRF and US toymaker Hasbro, plan to reduce reliance on Chinese imports. “Today, it makes sense to go to Europe as there is a price advantage when imports are done in Euros and not dollars. The majority of our Hasbro brand gets manufactured in China but we will try to bring in more brands like Lego which are made in Denmark,’’ says John Baby, CEO, Funskool.
However, unlike Simba Toys, Funskool has the advantage of having local manufacturing bases in Goa and Ranipet. “Today, we import almost 60 per cent of our toys but will try and reduce imports since we have our own manufacturing base,’’ added Baby.
At the same time China is better placed than Europe for its toy manufacturing capabilities. “Even European toy companies such as Spain’s Draco Toys import toys from China which has capabilities and volumes. But shift in countries for imports will happen and there will be realignment over a period of time,’’ observes Prakash Wakankar, CEO, Mahindra Retail, which owns kids stores of Mom & Me.