India File

Atmanirbharta in toy-making is no child’s play

Rutam Vora | Updated on October 05, 2020 Published on October 05, 2020

In demand: Cotton and cloth toys by Gulabbhai Bhanani’s family from Kachchh

The PM’s call to become a world beater in toys has created a buzz around Gujarat’s clock town Morbi. But there’s the Chinese competition to deal with.

In August last year, business magnate Mukesh Ambani bought world’s oldest toy retailing chain Hamleys of London drawing global attention towards India in the toy business.

The acquisition puts Indian billionaire Ambani on the global map of India’s toy industry; this is even as India continues to struggle to make its presence felt in the ₹7-lakh crore global toy market.

Underlining this, Prime Minister Narendra Modi, in his monthly radio address – Mann ki Baat in August – appealed to the entrepreneurs to focus on making toys locally and ensure that the local toy industry grabs global attention.

Market segmentation

However, the current scenario – investments, technology, costs and competing products – point to the fact that toy-making in India is no child’s play. Goods are being dumped from neighbouring China at a much cheaper rate.

India’s social and economic diversity is making it difficult for manufacturers to identify a particular customer base for toys.

The industry has divided the customer base into three broad segments, based on their spending pattern. The first such segment is the high-income group which spends on expensive, imported and branded toys. They constitute about 8-10 per cent of the country’s toy buyers. About 20-22 per cent buyers come with budget constraints and look for dual purpose in a toy i.e. education and entertainment, irrespective of brand or origin. The third and the largest segment of toy buyers is the mass category, priced below ₹200-300 and sold through unorganised retail outlets, stores, roadside vendors etc.

For a ₹5,000-6,000 crore industry, the ‘Made in India’ toys cater to only about 25 per cent of the country’s overall toy demand. The majority is met through Chinese products, while some go for European brands such as Hamleys, Lego and others buy US brands like Mattel.

Competing with China

“We can compete with China in terms of quality, but costing will be an issue as they are much cheaper than our products. We are studying the feasibility and requirement of the market,” said Rajubhai Bhammar, a clock maker from Morbi, who is now eyeing a play in the moulded plastic toys category.

So, when the Prime Minister appeals to the country to go local for toys manufacturing, is it feasible?

Jaysukh Patel, an industry leader in Morbi who visualises transforming Morbi’s identity from a clock and tiles town to a toy hub of India, says: “About 80 per cent of the total toy purchases happening India are at below ₹200-300 per piece. There is no brand commanding this segment, nor there is any technical expertise required to make them. All these toys are dumped in our market from China at a much cheaper rate, against which we can’t compete.”

How do Chinese toys land in India so cheap?

Patel, the Managing Director of the World’s largest clock maker, Ajanta-Oreva Group, explains that a huge cross-border racket of tax evasion through under-invoicing, misdeclaration of quantity and type of product has been going on, involving Chinese businesses, Indian agents/middlemen and traders. “The official figures for imports made from China do not reflect the figures of actual imports from China on account of under-invoicing of imports. The actual figures maybe two to three times higher than what is reported officially,” he explains.

There is serious concern over the mushrooming of e-commerce players to sell various types of toys and educational products. “About 80 per cent of the products they sell are China-made. It affects our small and medium retailers who were engaged in off-line selling of the Indian products manufactured by small and medium toy makers,” says Patel, who has written multiple letters to the Prime Minister Modi seeking corrective steps to protect local toy manufacturers.

While referring to the existing toy manufacturing clusters in India, namely, Channapatna in Ramnagaram district, Karnataka, Kondapalli in Krishna district in Andhra Pradesh, Thanjavur in Tamil Nadu, Dhubri in Assam and Varanasi in Uttar Pradesh, the Prime Minister recalled the “rich tradition of local toys” in India. “There are many talented and skilled artisans who possess expertise in making good toys. Some parts of India are developing also as toy clusters,” he had said in his radio broadcast.

Morbi as a toy cluster

Morbi is one such cluster, which has the capabilities and resources to make toys and add value to its existing identity of a tiles and clock town. About 150 players engaged in clock, electronics items and gift-making are exploring a business opportunity to make toys for global giants and get into Chinese shoes.

Atush Doshi, another clock maker in Morbi, says, “Several players in Morbi have begun developing moulds and products. First, we are looking at the financial feasibility and market acceptability aspect for the products. The manufacturers are currently having huge rush for Diwali orders for clocks and other products. Therefore, it is taking a bit longer to execute the new plans in the toy segment. We are sure we will be able to give far superior quality than China. We are currently waiting for some support from the government to give it a push.”

Traditional toys

On the other hand, there is a silver-lining for traditional handmade toy makers, using cloth, metals and wood. One such cotton-based toy maker in Kachchh, Gulabbhai Bhanani from Sumrasar- Shekhwali village near Bhuj has witnessed a surge in buyers for hand-made cotton toys of dolls, animals and shapes.

“My wife and other 10 women make these cotton cloth-based toys. We had started this about three years ago and last year was a very good year. Before Diwali, we sold more than 500 units of dolls and other animal-shaped toys for kids. Rich or service class, including tourists who come to Kachchh, buy our toys. And surprisingly, after this push for Make in India, we have seen more people buying our handmade toys,” Bhanani says, adding that it has become a promising business for his family.

Even as the current year has been dull due to Covid-19 and the lockdown, Bhanani expects to stand up to Chinese competition. Traditional artistic dolls and animals can also be used as showpieces.

“Gujarat is into clay modelling and dough products, where we have stiff Chinese competition. But in terms of quality and product replacement we provide credible products. Mostly schools buy our products to engage students in clay modelling. Due to lockdown the business was dull, but we expect things to normalise once the schools start,” said Paresh Joshi of Ahmedabad-based Clay Kids – a manufacturer of clay modelling products.

A senior academician and Principal at Arya Kanya Gurukul in Porbandar in Saurashtra, Rajana Majithiya underlines the importance of toys in education.

She says: “The usage of toys in training and education is important during the primary level at schooling of a kid. By using a plain textual teaching method, we are treating a kid’s brain just as a pen-drive. Whereas using toys, activities, and modelling etc gives a lasting learning for the kid.”

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Published on October 05, 2020
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