The New Toy Story

BARELY OUT OF HIS teens, Lakshay Goel, an engineering student, started selling toys online, procuring them from the local wholesale market. Those were all electronic ones made in China. By the time he was 20, in 2016, he had floated his company, Webby Toys. But everyone was selling the same plastic toys—remote-controlled cars, drones, musical toys for toddlers, etc. He hired a freelancer to create something different. The first toy to be designed was an educational wooden clock and then an educational wooden Hindi consonants puzzle. Even then, the manufacturing continued from factories in China, the world’s largest toy producer. Around the same time, the Indian government started imposing curbs on Chinese goods. The Union Budget in 2018 raised customs duty on toys to 20 per cent. Goel started exploring options of making toys indigenously. Indian manufacturers were not, at the time, in a position to compete with their Chinese counterparts. In March 2019, a fire broke out in the company warehouse in Delhi, destroying all the Chinese toys.

The stocks had gone. It was time to think out of the box, even as the company continued to import some toys to stay afloat. Goel finally decided to import machines from China to make toys. The machines landed in September 2019. India still lacked the ecosystem to make toys. He realised there were not many trained toy designers in the country. Among them too, most wanted to pursue designing games that could be linked to mobile phones. “So, we got together a group of people like mechanical engineers and architects, and with whatever knowledge we had, we started designing. It took a year to understand it,” he says. The first product was a dollhouse made of wood, which took three months to design. In 2020, as the government further tightened the norms for the import of toys and the lockdown in the wake of Covid regulated the entry of Chinese goods, Goel’s efforts to design and manufacture indigenously started paying off.

That same year, Prime Minister Narendra Modi, in a “Mann ki Baat” address, made a strong pitch to make India a toy hub, asking startups and entrepreneurs to get “vocal for local” toys, as part of the Atmanirbhar Bharat campaign. But he also emphasised that toys should bring out a child’s creative spirit, quoting Rabindranath Tagore, who had said that the best toy is that which is incomplete, so that a child could use his/her creativity to complete it. Modi pointed out that the global toy industry was worth over ₹7 lakh crore, but India’s share in it was minuscule. He underlined the need to ensure that toys made in India were eco-friendly. “That set off a series of measures. It was also a message to the domestic toy industry. We asked the Quality Council of India (QCI) to assess the quality of toys available in the country. It was all imported then. The mystery shopping showed that only 33 per cent were safe,” says Anil Agarwal, additional secretary, Department for Promotion of Industry and Internal Trade (DPIIT). A National Action Plan, involving 15 Union ministries, was drafted in a bid to boost the domestic toy industry, in a country where 30 crore people are below 14.

In December 2019, to stem the import of substandard toys, the Directorate General of Foreign Trade (DGFT) made it mandatory to test samples. If a product failed to conform to prescribed quality, the consignment would either be sent back or destroyed at the cost of the importer. Two months later, the government issued a Toys Quality Control Order under which all toys, foreign or domestically manufactured, were brought under Bureau of Indian Standards (BIS) certification with effect from January 2021, making it mandatory for toys to conform to Indian safety standards. Under BIS regulations, no person was permitted to manufacture, import, distribute, sell, hire, lease, store or exhibit for sale any toy without the ISI mark. In the 2020 Union Budget, the government raised customs duty on toys to 60 per cent, bringing toys under one of the higher-duty categories.

For Goel and others like him, the new rules posed an opportunity and a challenge. “As a result of government intervention, we completely moved away from Chinese toys to indigenous ones. Toys are one of the biggest categories in the US. With the size of our population, the toy market should be much bigger in India. Unfortunately, toys are still considered a luxury instead of an early development tool for the child. We want to bridge this gap by bringing in well-designed quality toys at prices affordable for everyone,” he says. Today, his Webby Toys, one of the top players in the primary online market in toys, sells about 50,000-60,000 units a month and has a production capacity of 6,000 units per day. Claiming to have developed 1,500 unique toys, it has over 500 puzzle designs, building blocks, traditional Indian toys with themes like Varanasi and Old Delhi, dollhouses and games, all of which are manufactured in India.

“The demand for traditional toys is less, but it’s picking up. We are trying to convert the katputli dolls into electronic toys that can speak and have moving eyes,” says Sanjay Mehndiratta, managing director of Toyzone, one of the largest Indian toy manufacturers. Nearly 20 per cent of the products manufactured by Toyzone are electronic toys, which are projected to increase to 50 per cent in a year, completely replacing the Chinese products.

After working as a salesman in a toy shop for a couple of years, Mehndiratta started his toy business when he was 16, in 1985, nearly a decade before India allowed toy imports. He recalls that his company survived even as nearly 80 per cent domestic manufacturers shut shop with imported toys flooding the market after 1994. “India couldn’t compete with China’s aggressive pricing. After I opened a factory in Bhiwadi in Rajasthan in 2002, I stayed inside it, without coming out, for 17 days to take a call on whether to continue with it or shut it down. At the end of 17 days, we made the delivery plane, an electronic toy, for ₹54, the same price as the Chinese one,” says Mehndiratta. By 2005, Toyzone stopped importing foreign toys. But imported toys dominated the market, making it difficult for Indian manufacturers to compete. With government regulating imports, Toyzone’s sales, which went up by 5 per cent in 2019-20, are expected to increase by 70 per cent this year.

WITHIN THE TOY INDUSTRY, it is said that there are over 4,000 toy-making units in India, though this figure is not based on any scientific study. Most of these are medium, small and micro industries, but the toy industry needs technology, large capacities, investments and all the other trappings of a big industry. In a little over two years, the Indian toy industry took a roller-coaster ride, emerging out of China’s shadow in an effort to create a space for itself in the domestic and the international market. Modi, in another “Mann ki Baat” on July 31 this year, lauded the industry for making eco-friendly toys based on Indian mythology, history and culture and for working closely with leading international toy brands. “Toys worth more than ₹3,000 crore used to come from outside. Now, their import has [been] reduced by 70 per cent and it is a matter of joy that during this period, India has exported toys worth more than ₹2,600 crore to foreign countries, while earlier toys worth only ₹300-400 crore used to go out of the country.” In a recent survey by BIS, 86 per cent of toys available in the market have been found to be compliant with standards.

“The prime minister’s call for rebranding Indian toys, to make them learning tools and give them a domestic push went a long way. Earlier, nearly 90 per cent of toys were imported from China. When the government got these toys tested, most of the imported toys were found unsafe for kids,” says Sharad Kapoor, general secretary, Toy Association of India. After the steps taken by the government, imports have come down from $370 million in 2018-19 to $110 million in 2020-21, while exports jumped by 61.30 per cent from $202 million to $326 million in 2020-21. At the annual toy exhibition Toy Biz, held at Pragati Maidan in New Delhi this year, all 96 stalls showcased Indian products while in 2019, of the 116 stalls, 90 had showcased imported toys, says Kapoor.

What is worrying for the domestic toy industry is India’s consumption set against global consumption, accounting for just 0.5 per cent of the global market worth $156 billion despite comprising nearly 18 per cent of the world’s population, and with 30 per cent of the country’s population being up to 12 years of age, says toy industry observer Adnan Chara, who has worked in senior positions across organisations specialising in children’s products. “Even this low domestic toy consumption has further come down drastically from what it was in 2019 because the consumer buying today is dictated to by what is available in the market. Remote-controlled toys, among all other preschool and electronic toys, which accounted for 47 per cent of toy consumption, are hardly available. There are some new manufacturers who have come in, some have increased capacities, but this is too small to satisfy the hunger. Imagine a childhood without a Spiderman figurine or Hot Wheels or Lego for the past two years. The journey towards becoming self-reliant in toys has just started and it is going to be a long one.”

The low consumption within India is linked to affordability and awareness. Toymakers agree that India still has a long way to go, acknowledging that they have to pass through this transitional phase. “Indian parents have not had much exposure to branded toys during their childhood and, sometimes, do not realise that toys are essential for the physical and mental development of the child. Awareness about different toys available is also low. But manufacturing in India will make the pricing more attractive, addressing the affordability issue. The future should be good and the market is bound to grow exponentially as consumption improves,” says R Jeswant, CEO of Chennai-based Funskool (India) Ltd of the MRF group, one of India’s leading toy manufacturing companies, which began in 1986 as a joint venture with Hasbro Inc, in turn one of the world’s top toymakers.

The story of Belagavi-based Aequs, which set up India’s first toy manufacturing cluster at Koppal in Karnataka, began with operating aerospace ecosystems. Seeing the potential in the toy sector and as supplier to global aerospace Original Equipment Manufacturers (OEMs), Aravind Melligeri ventured into toy manufacturing in 2016, turning it into one of India’s largest manufacturers and exporters of toys. It had also helped that global brands like Hasbro were looking to diversify their sourcing from China at the time. Melligeri zeroed in on Koppal, a backward district, where not a blade of grass grows. One of the reasons was its proximity to Kinnal, a village traditionally known for making toys with wood pulp. It is trying to support the revival of the Kinnal artisans.

While acknowledging that the toy industry has got support from the government, Rajeev Kaul, COO and MD, Aequs, says Indian players have a long way to go before becoming a force to reckon with in the global market, for which the government will have to step in with a more comprehensive policy and incentive support for toy manufacturing. “For starters, we feel the government should extend the Production Linked Incentive (PLI) scheme to toy manufacturing. It has the potential for job generation that is much larger than many other sectors, that too for people at the bottom of the pyramid, particularly women from the rural hinterland. Therefore, our case is that PLI should be extended to cluster developers for toy manufacturing for units located within these and clusters that support traditional toys.” According to him, while the domestic market is an attraction, the major growth movers are the export markets which demand scale, cost-competitiveness and significant technological inputs.

Besides online sales, toy manufacturers sell their products through retail outlets like Hamleys, a British multinational toy retailer, now owned by Reliance. At Hamleys, which has over a hundred stores in India after the first one was opened in Mumbai in 2010, the shelves are now mostly filled with Indian toys which have replaced their Chinese predecessors that dominated the market pre-Covid. There are the foosball tables, a football game popular with not just children but also older football lovers, besides stuffed toys, chase patrol cruisers, rock trawlers and guns, all made by Indian companies. One entire section called “Folktales” is dedicated to traditional Indian wooden toys. There are modified versions of the pithoo, a traditional Indian game played by stacking up stones and a ball, the lattoo (spinning top), the cooking playset, a modern version of the bhatukali, an ancient miniature kitchen set originally made of brass or copper. “Now, 70 per cent of the toys here are Indian ones. The customers, too, don’t favour Chinese toys any longer. Before Covid, it was mostly toys from China,” says Hemant Pandey, manager at the store.

Amidst the crowd of children and their parents at the bustling Hamleys, a little girl walks through the section for Lego, the Denmark-based toy company known for its interlocking plastic bricks that can create objects like robots, cars and buildings. “Her favourite is unicorn toys,” says her mother Sanchita, who has generally been cautious about the plastic Chinese toys because toddlers have a tendency to put them in their mouth. She also does not encourage her daughter to play with “Barbie-like” toys. Imports of the American Mattel group’s Barbie, manufactured outside the US, mostly in China, have come to a near standstill in India, although the assembly of some models has reportedly started in the country. The doll with an iconic figure, selling a-hundred-a-minute the world over, has been one of the most loved and scorned toys. Though Mattel tried to break the stereotyped perfect-looking doll by changing its figure, skin tone, eye colour, hair style, creating over 200 professional Barbies, and even a lesbian Barbie wedding, the debate continues on the doll’s influence on young girls. In India, Barbie, originally Westernised and blonde, entered in the early 1990s. On the Barbie shelves with the caption “You Can Be Anything”, there are stereotyped Indian versions of the doll—a Barbie as a bride in red with a groom.

Modi, on a “Mann ki Baat” broadcast in May, had lauded the Thanjavur doll, made of paper mache, plaster of paris, terracotta and wood pulp. The 19th century Thanjavur Thalaiyatti Bommai, a traditional doll with a bobble-head, kohl-lined eyes, painted with colourful traditional clothes and jewellery, and mechanically engineered to stay upright on its curved pedestal, was given the Indian government’s Geographical Indication (GI) tag in 2009. Toy marketers say that demand for traditional dolls is limited to people who appreciate arts and crafts while children still idolise Barbie. Several toy brands have ventured into toys introducing children to Indian mythology.

At the end of the day, every child should have a toy to play with. H Jackson Brown Jr, the American author known for his Life’s Little Instruction Book, said, “[G]ive children toys that are powered by their imagination, not by batteries.” If one is to go by Romanian aerodynamics pioneer and inventor Henri Coanda’s words “these airplanes we have today are no more than the perfection of a child’s toy made of paper”, then toys are not just child’s play.

About The Author

Amita Shah