Despite being present in India for the past 15 years, Mattel Toys continues to rely on imports rather than manufacturing in the country. The US-based MNC will rely on imports from neighbouring countries like Indonesia and Malaysia to build its product portfolio which includes brands like Barbie and Hot Wheels.

“We have our Barbie dolls in India which is being made by third party manufacturers. Today, we have 15 per cent of our topline coming from made in India products and there has been no decision taken to increase it,’’ said Ishmeet Singh, Country Manager, Mattel Toys.

Mattel had entered India in the late 1980s through a joint venture with VIP Industries (Blowplast) to market toys under the Leo Mattel brand and subsequently parted ways to start its own subsidiary in India. In 2015-16, Mattel reported a sales turnover of ₹131.4 crore.

While the toys category has slowed down to single digit growth rates at 2-5 per cent for the past five years, Mattel is optimistic about the Indian market where per child consumption of toys is at 1$. Its nearest competitor, Hasbro, has already broken off its joint venture with Funskool to start its own subsidiary in India for sourcing and exporting to the global market.

According to Vivek Jhangiani, past president of the All India Toy Manufacturer’s Association, “Most toy companies are struggling since there is lack of propensity to spend on this category. The base of the toys category is small at ₹2,000 crore with single digit growth today.’’

“Toy makers have been looking at alternative manufacturing after China, where costs have been rising. But while India is the next big manufacturing hub after China, it does not have the ecosystem to support manufacturing for such toy makers,’’ observes Jhangiani.

In fact, it is domestic toy companies like Funskool which are investing in manufacturing. “We are one of the few toy companies which still believes in manufacturing in India,’’ says John Baby, CEO, Funskool.

But international toy retailers continue to be optimistic about the growth of the toys category based on the population in the 0-14 age group of nearly 350 million. While UK retailer Hamleys plans to double its 26 stores in the next two years, Toys R Us has already forged a pact with the Lulu Group to launch its stores in India.

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