Chinese toys? Not a threat to Indian cos

Having survived the imported Chinese toys that nearly killed the Indian toy industry, the Rs 2,000-crore (Rs 20 billion) domestic toy industry has come a long way. A K Bansal, chief managing director, Hanung Toys and Textiles Ltd, spoke to Ashish Sinha about the turnaround of the Indian toy industry and his company's plans for the Indian market.

The company's agreement with Walt Disney India allows it to manufacture soft toys resembling Disney characters like Mickey Mouse, Donald Duck, Goofy, Nemo and Lion King among others.

Why are imported Chinese toys not preferred today?

There are several reasons. But primarily, imported Chinese toys are of inferior quality.

Also, most of them do not conform to the quality norms. We produce stuffed toys of the highest quality standards and at competitive prices. Hence, even though the Chinese toys damaged our toy industry during 1999-2003, now it's no longer a threat.

Can you summarise the damages caused to the Indian toy industry due to imported Chinese toys?

During 1999-2003, India was importing almost 1.2 million toys from China every week. The domestic toy industry was traumatised by the loss of an estimated 80 per cent of its home market to the Chinese goods. According to one estimate, only 200 of the nearly 700 companies in existence survived.

How is the domestic toy market placed now?

There is no study on the value or the volume of domestic toy market. But industry estimates suggest that the toy market should be around Rs 2,000 crore (Rs 20 billion), of which the organised stuffed toy market accounts for about Rs 300 crore (Rs 3 billion) and is growing at over 25 per cent annually.

Between Mattel, Funskool and Hanung Toys, we have about 15-18 per cent market share.

What is fuelling the domestic toy market?

There are three basic reasons for high growth in the stuffed toy market. Firstly, the disposable income of people has grown very fast in the last three-four years. This has led to several changes in the shopping pattern. Secondly, gifting stuffed toys has caught on in a big way.

Then the mushrooming of shopping malls has also worked in our favour. And last but a very significant reason is the increase in foreign trips undertaken by a large number of people. This exposes them to international stuffed toy brands. Apart from being great gifts, stuffed toys also help people de-stress.

How does your supply chain work?

At the domestic front, Hanung operates through a network of more than 100 distributors. We supply our soft toys to them who then distribute the goods to multi-brand outlets including Lifestyle, Piramyd, Wellspun, Odyssey, Pantaloon, Ebony, Shoppers' Stop etc.

Similarly, the home furnishing range is supplied to more than 20 distributors who in turn cater to the network of more than 600 retailers spread across India. Our products are available at 3,600 stores across India.