Toy Story 2.0

IN THE OLD folklore of consumer capitalism, toys arrived from elsewhere. They appeared, bubble-wrapped, fluorescent, plastic, stamped “Made in China”, as if childhood were a supply chain. That axis has gradually been tilting for a while, with global toy majors hedging their risk by manufacturing in India. More recently, India’s toys are not only shipped abroad as mute freight stamped with someone else’s logo, they also travel with attitude and address, bearing new-age names like Smartivity, Skillmatics and PlayShifu. Built at home, these brands have muscled onto Walmart shelves and Amazon wish lists, insisting on a seat beside Lego and Mattel. “We set out to build a global brand from India, not another plastic-moulded toy company,” says Dhvanil Sheth, co-founder of Skillmatics, one of the most successful export-oriented toy brands to emerge from India. Global stints with the Boston Consulting Group helped Sheth identify a gigantic toys and games category that was stale and moving online faster than its incumbents knew how to follow. “It’s a category where there hadn’t been much innovation. It’s a category that was rapidly moving online in terms of purchase behaviour. And the whole idea was, why couldn’t we build a global brand from India?” The question lingered like a dare. India had the substrata: world-class printing, packaging, textiles, design schools, and graduates who came back from the best business schools with a global eye. The proposition was simple: instead of more plastic figurines, build a brand for parents who shopped online, who aspired to shun screens, who wanted to buy intention. The old model was transactional: at a shop aisle, a child tugged at a Barbie and the parent paid up. Online, the parent holds the reins, and the maker must master a subtler trick: to make learning feel like play, or watch the sale slip away. Skillmatics began with products for the three-to-six-year-old bracket, a crucial age for motor skills and curiosity. “Kids are really quite similar globally,” Sheth says. If every child, whether in Dallas or Dadar, learns to write, to name animals, to draw straight lines, then the products need not be provincial. The company now makes toys for 12-month-olds and 12-year-olds, but its philosophy remains stubborn: design for skill, design for longevity, and design to be wiped clean and used again. “We don’t make trendy toys,” Sheth says. “We won’t chase fads like fidget spinners or Labubus. Evergreen learning outcomes give products longer relevance.” Skillmatics isn’t just exporting toys; it is exporting the Indian accent of intelligence, packaged as play. Last fiscal year, the company made about ₹500 crore in revenues, up from ₹331 crore the previous year, and just ₹5 crore in 2018-19. This year’s target is ₹650 crore. The company has raised about $24 million in venture money and has been profitable for a while. About 80 per cent of its revenues come from outside India, mainly from North America, the UK and Europe. Skillmatics retails at 30,000 to 35,000 American stores—it quadrupled its assortment with Walmart this year—besides online, where many of its products are routinely on the Amazon top-selling games list, including ‘Guess in 10’, a lean, quick-fire card game, and ‘Foil Fun’, a signature craft kit. “All that IP has been designed and developed in India,” Sheth says, by a 120-member design and development team in Mumbai. Manufacturing happens across 30 to 35 vendors along the west coast of India. There is another reason Skillmatics’ ideation-to-launch cycle is faster than that of larger companies, and that is its embrace of data analytics. While the myth of toy-making still clings to the garage bench and the lone prototype, here the machinery hums in stranger registers: an engine of analytics, search terms and trends coaxed from social media, and above all, an ear tuned to the rhythms of parents, who now work more, marry and have children later, and live with the constant dread that a glowing screen may colonise their child’s mind. The same anxieties now grip Indian parents, and they are shaping the market in ways as decisive as policy. In 2020, when BIS standards were tightened and import duties raised, a flood of cheap Chinese toys was dammed almost overnight. Domestic sales surged, not just because the shelves were cleaner but also because a new cohort of parents was willing to pay more for safety, design and the promise of learning. The Indian toy market boom, then, is part regulation and part demography. Ashwini Kumar remembers what the shelves looked like when he began to build Smartivity—almost every toy was Chinese, and the IP came from the West. Three classmates from IIT-Delhi, class of 2011, decided they could change that. They would build toys that had to be assembled before they could be played with. For years, they were explaining themselves. Parents had to be coaxed into understanding this new, emerging category called STEM toys; retailers were puzzled, floor staff could not compress gears and levers into a quick pitch. But they persisted, and the break came during the pandemic. “The turning point was in 2020–2021,” Kumar says. Children were home, and parents went looking for alternatives to screens. Smartivity leaned into e-commerce, and when stores reopened, customers asked for them by name. Smartivity has since grown into a company with more than a hundred Indian patents and seven in the US. Its designs are made in Manesar, and its sales are now split between India and the West. Nearly 40 per cent of Smartivity’s sales come from exports, most of that from the US. “Amazon’s Toys & Games category in the US is worth more than 50 times India’s,” Kumar says. At home, the brand’s simpler kits, priced closer to ₹500, move fastest. The company’s philosophy has shifted over time—from education first to play first, with learning folded in subconsciously.. “Our buyer is a parent, but the consumer is a kid. And we have to make both stakeholders happy,” Kumar says. Kumar is clear-eyed about the manufacturing realities in India. Electronics trails China by a mile; injection-moulding finish is a known gap. Wood is Smartivity’s habitat—laser-cut pine MDF, for eucalyptus is unsafe for children, and costs more, but Smartivity refuses to compromise for cheaper alternatives. “Our net revenue was around ₹55 crore for FY 2025, and we are targeting ₹80 crore net revenues this year,” he says. With the punitive tariffs imposed on India’s exports by the US, Smartivity’s prices have increased by about 13 to 15 per cent, but the company is yet to see a dip in sales. The toy industry is hoping that the tariffs will be brought down to 10 per cent before the American holiday season. Industry experts say India has the potential to triple its toy exports to the US in five years. From $104 million last year, it could touch $1 billion in 10 years. Shabbir Gabajiwala, president of the All India Toy Manufacturers Association, says the sector has gained from the recent GST cut from 12 to five per cent (though battery-operated toys remain at 18), and from BIS’ willingness to handhold smaller firms through compliance. But Indian exports, heavily oriented to the US, are struggling with the 50 per cent tariff, leaving consignments on hold. At home, the real threat is Chinese Clockwise from top left: Concept toys from Imagimake, PlayShifu, Skillmatics, and Smartivity toys disguised as gift items or plasticware, which continue to leak into the market. Gabajiwala’s company, Toysbox, founded in 2007 in Mumbai, sells only in India,with 108 SKUs. Its bestsellers are metal construction sets and MDF toys. If the early Indian toy story was OEM and opportunism, the current one is design and marketing. Competing with China on price is a cul-de-sac. “If you try to compete with China on price, it will be extremely challenging,” says Ravi Jalan, cofounder of Imagimake, a toy company that began as an activity centre a decade ago and pivoted to products to scale quickly. “Having a product IP or a product differentiation really helps you stand out,” says Jalan. Imagimake holds patents for their quilling system—Spirosity/Spin N Spark—in India and in the US. The company makes hands-on toys that span puzzles, art-and-craft kits, and DIY construction sets, designed to keep children engaged without screens. Imagimake’s brand recall went up after it was featured on Shark Tank recently, but for better brand recognition overseas, the company is looking at licensing deals in the short term and STEM, robotics and toys for infants to broaden its catalogues. The growth engine today is art and craft— paper craft, clay, colouring compounds, and tools that lower the skill threshold and widen the circle of delight. The brand churns out 25-30 new products every year and is positioned in the mass premium category, priced at about ₹700-800. The factory is in Vasai, on Mumbai’s fringes, with 250 workers under the company’s roof. “The market for toys is hungrier than ever, but when it comes to educational toys with a long gestational period, the going gets tough,” says Sonia Choksi, who turned a chance encounter with a clunky “talking pen” into a smart learning toys business called Go Discover. “I have 10 SKUs and it took me 14 years,” Choksi says. “Our Smart Charts are priced at ₹5,999. Oftentimes I’m told ye nahi bikega (it won’t sell).” Yet she has pushed into schools, retail stores, and government channels in India, and found distributors in Saudi Arabia and across Africa. Go Discover’s core product is a piece of hardware that can be tapped against specially printed books or charts to trigger sound, story, or song. “This tech, that could be touched on any piece of paper and give out audio and info, was always there,” she says. Over the years, she began experimenting with hardware and software, building a trial set of books, recording voices. Fourteen years later, those trials became a company that gave paper a voice, restoring listening and speaking to the centre of childhood. Like GoDiscover, PlayShifu’s catalogue is lean—20 SKUs that behave more like categories than products. “We are a tech-first company, so our development cycle is a bit longer than for traditional toy companies,” says Harshal Ved, the global sales head at PlayShifu, whose target audience is four-to-eight-year-olds, the first generation to hold a screen before they can spell their name. The company makes tech-enabled learning toys that merge physical objects with digital play—Smart Globes, interactive board games, and learning kits that come alive through an app. Its range now extends to Smart Plush toys, blending tactile comfort with curated, parent-supervised content. PlayShifu is built on the premise that screen time is a reality. “Kids are born with the screen. All our products have a physical and a digital component. Whatever gameplay is happening is happening with a lot of hands-on activity, but the results are shown on the screen,” says Ved. What makes PlayShifu a hit globally is the toy itself: the Smart Globe with its lit-up cartographies, the board that only reveals its logic when touched, and the packaging that does not change from Bangalore to Los Angeles. “From day one, we were conscious that the customer in India should get the same experience as the customer in the US,” he says. PlayShifu began not in India but on Amazon US in 2017. The traction there pulled the company back home. Today, 80 people in Bangalore handle design, engineering and content. In Mumbai, Emotix has built a companion for children that could soon replace the teddy bear—the Miko line, consisting of small machines wired with the promise of conversation, play, and instruction. The company has won approval to raise ₹1,325 crore from the AMDG-PAX Foundation, a sum that vaults its valuation towards half a billion dollars and secures its place as one of India’s most audacious toy-makers. The robots retail at ₹15,000-25,000, with subscription plans tethering the machine to a recurring stream of content. In the past year alone, revenues rose nearly sixty per cent to ₹358 crore, even if losses, too, mounted. The future may still be uneven, pulled between tariffs and subsidies, between parents who want learning and children who want delight. But the direction is unmistakable: the “Made in India” label on a toy is an address, a promise, and increasingly, a claim to the world.

Toy Story 2.0

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