Assignment on toys and games retail industry in India Submitted to:Prof.L.

SURENDERA Submitted by:Anuj Bansal Supriya Kergodu Pranaya Mohanty Srivikram Shanmugasundaram
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 Brief about the present status of TOYS AND GAMES industry in India:-

1. Preference for branded toys grows at faster pace

The toys and games market in India in 2010 continued to grow in high double-digits and performed better than previous year. Growth was stimulated by factors such as improving disposable income among the middle class population, the focus on providing children with toys that are safe, and also the strong growth in organized retail chains in India. Demand for toys and games also registered higher growth in categories that facilitated learning with play. Categories such as scientific/toys and games registered relatively better growth than others. Overall the performances of both traditional toys and video games were good, but video games grew faster due to the categorys lower base.

2. Newer partnerships and tie-ups help bring newer toys to market

Due to the increased focus on child safety the preference for branded toys grew at a faster pace and captured some sales from cheaper non-branded toys. As demand for branded toys increased in India, there were many initiatives between local and international players that emerged in the form of tie-ups and partnerships. Realizing the potential of demand in the toys and games market in India, many international players entered into partnerships with local toy manufacturers as well as retail chains such as Reliance Retail Limited. This helped suppliers to achieve a set up in the Indian market and address problems of distribution. To start with, many international retailers targeted Indian urban areas, where the organized retail chains were growing faster. The newer partnerships also helped consumers, providing them with access to many newer international toy brands that were previously unavailable in India.

3. Competition grows as newer International brands enter market

The market for toys and games became increasingly competitive over the review period. Many international brands such as Mattel, Funskool, Hamleys, Toys R Us, etc, increased their share and grew rapidly due to innovative products that suited the Indian households requirements. Domestic suppliers such as Hanung Toys & Textiles Ltd and Ok Play India Ltd also benefited from growth in demand for branded toys in India. The competition introduced newer marketing concepts and propelled toys and games suppliers to move beyond their traditional strongholds. The increased popularity of the concept of learning while having fun grew, and helped categories such as pre-school toys and scientific/educational toys.

4. Growth in organized retailing helps adoption of private label products

The Indian market continued to see good growth in its organized retail network with major retail players such as Reliance Retail Limited and Pantaloons Retail India Ltd expanding their number of stores further into smaller towns and cities. The growth in retailing helped toy marketers to provide end-customers with the right toy experience, helping to improve customer adoption of their toys. Organized retailing growth has also helped the development of private label products, as they are more profitable and provide superior value to customers.

5. Strong demand for newer toys and games expected over forecast period
As the Indian toys and games market is likely to mature further for branded toys, strong demand is likely for newer toys and games that provide consumers with good value. Innovation, coupled with the correct pricing, will help marketers differentiate themselves in the Indian toys and games market, and grow at a faster pace than its peers. The forecast period is likely to witness strong growth for toys that also facilitate learning and development of children. Toys in segments such as pre-school, scientific/educational, infant and construction are likely to witness stronger growth than others.

 Identify the various retail formats that exist in India to address different customer segments:-

Estimated at around Rs 3,000 crore and growing at 25-30%, Indias toys market is attracting international toy makers with their branded, higher priced products. While Mattel has been around for a while, Hamleys and Toys R Us tied up with Reliance Retail recently to enter the market. Other major entrant are like Funskool (in a 60:40 joint venture between MRF Tyres and USAs Hasbro International), Disney, Simba, Leapfrog, Spin master, Jakks Pacific, University Games, Moose, Vivid and Lego. With the unorganised sector still dominating the toys category at a 60% share, organised sector toy brands believe there is that much more opportunity to exploit, as parents (especially urban) get more conscious about health hazards and quality issues in toys, and the contribution toys make to their childrens overall development. The growth of modern retail has given a huge boost to the organised, branded toys industry. Mattel has seen strong demand upswing on the heels of increased consumer income and influence of kids on household purchases. Demand will be there for high-quality safe toys with a strong value proposition for parents. As overall increase in disposable incomes combines with the rise of retail across the country, we can witness the establishment of new cost-value paradigms in this segment as well. Toy stores such as Hamleys (in partnership with Reliance Retail) are changing the landscape with their large and dedicated space for toys. Hamleys plans to open at least 20 stores over the next five years. The size of its store in Mumbai is around 21,000 square feet. Its going to be a fantastic, exciting stage in our international development and its sure that Indian customers will love the magical elements of Hamleys, which guarantees the best of past, present and future for all children (both young and old). In a distribution tie-up with Funskool, Lego is also planning to expand its impact in India. With pre-school education in India getting more professional, learning while playing is an idea fast finding appeal with parents. Earlier, Lego was marketed by Mahindra Intertrade, a trading subsidiary of Mahindra & Mahindra. Lego is currently available at around 150 outlets. Funskool also has tie-ups with German toy maker Ravens burger for jigsaw puzzles, and Walt Disney and Warner Brothers for board games and puzzles. Tomy, a Japanese brand, has also tied up with it. By now, Funskool has developed a formidable reputation for education-related toys and learning materials and is present across close to 4,000 outlets, according to published reports.
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Bookstores such as Landmark and Crossword have toys and games as the biggest contributors, after books, to sales. Toys and games are a complementing category for kids books. In the recent past, it has become one of the core categories for us, registering 30% year-on-year growth. As the market for branded toys picks up, more international brands are expected to come in. In the last five years, the market has changed a lot. European players are coming in good numbers through the import channel. With higher prices, branded toys are catering to the upper middle class and above. Landmark has 17 stores across India and has dedicated December to children, with special activities and discounts on toys, games and books. The last quarter of the calendar year is always exciting for the toy industry; toy companies focus on consumer promotion during this period India representative for German toy maker, Simba Toys. After completing a year in India, Simba is now evaluating a manufacturing base in India and aims to bring more of its educational' toys such as board games and activity-based art and craft brands. We now service about 1,000 stores pan-India. Going forward, we will have to focus on specific niche segments to service our customers, said Parmar. Modern retail for toys is growing and we see the rise of specialty toy stores in the future. For the size of the Indian consumer base, it is important to set up manufacturing in India. Simba Toys is the exclusive licensed for the ICC Cricket World Cup. It provides toys and merchandise to enhance the games experience. Zapak Games, the licensing and merchandising arm of Zapak Digital Entertainment, has distribution tie-ups with many toy makers including Jakks Pacific and Spin Master. Organised retail is bringing in tremendous growth and international players are helping open up the market, said Vaibhav Odhekar, business head, Zapak Games, which caters to 5,000 touch points. The Walt Disney Company (India) has started its e-commerce initiative to retail toys and games online. The reason, says a company spokesperson, lies in the growing e-commerce culture in India, and the growing interest in toys. Toys and games are appealing to consumers across age bands. Games such as UNO, Scrabble and Pictionary particularly tend to be quite age- and gender-independent, so growth has been driven across a wide variety of consumers including kids, youth, families and young adults. Hence we would like to give my all best wishes to the Industry because the trend like non-store based retailing is highest in sector like toys and games. Even international players like funskool promote their uniqueness of fun+learning. In upcoming 36-48 months we can see a stiff incline in toy & games Industry.

 Scope for growth of organized retail in India:-

The Indian toy industry is large and growing, but it is disorganized and there are some serious problems to be navigated which also takes into factor distribution & marketing challenge. Many of these toys are routed through Dubai & Malaysia. Even as the Cheap Chinese toy market are flooding the domestic market having said that we do design or modify some games to reflect Indian taste in them is absolutely true. Some games we import are slightly modified to Indian interest i.e. we have a slightly Indian taste monopoly. Social relevance is another factor that is being used. The past one-decade has shown that the Indian toy industry makes quick strides in terms of exports and production. India produces a wide range of toys made of plastic, mechanical activity toy, soft dolls, stuffed toys, board games, puzzles, educational games, metal and time toys, electronic toys and games etc. It is estimated that the industry volume is US $ 1 billion in the organized sector and about US$ 1.50 billion in the unorganized sector. There are more than 1000 units in the small sector and even a large number in the cottage industry. With the lowering of tariff barriers, the market is open now and the Indian industries are facing the challenge of ensuring their competitiveness in a sector where both distributors and multinational competitors are concentrated and form cheaper products which are mainly from the South East Asian Countries. According to an estimate, the global market of toys will touch more than US$ 150 billion by 2007 and thus realizing it's potential the Indian toy industry has correct time opportunity to put itself on the world map. Indian toys can have major share of the world market if they are keenly based on the latest technology and are marketed properly. By some toy industries, domestic market size this year is estimated to is in the range of Rs.500 crore while some think that it is at Rs.1000crores. Like many other industries, the Chinese factor is a major issue for domestic toy manufacturers, which has resulted in a chaotic market condition. Chinese and Taiwanese manufacturers have been innovative and specialize in novelty items which last Up to approximately ten months. These are of cheaper quality and hence less expensive which quickly captures the interest of the Indian buyer. As per the sources last year, the Chinese exported around $ 8 billion worth of toys. Indian imports this year will be around Rs.150crore, which is nearly half of the domestic toy market. But sources say that Chinese toys will be an issue for the domestic organizations for roughly another few more years before the customers will turn away from poor quality as the issue is not only cheap toys but also counterfeits which impact the legal licensee of a toy. Also Chinese toys that are currently imported do not have much content and so the question of threat has not crossed it's limit as yet because most importers are first timers and they discard toy imports due to poor margin. But if not taken care for Chinese products will turn out to be the biggest threat when toys with good content are made.

 BIBOLOGRPHY :
http://www.hindustantimes.com/business-news/Markets/Toy-joy/Article1640413.aspx http://www.scribd.com/doc/48516802/Toys-and-Games-Market-in-India-2010 http://funskoolindia.com/exports.php http://www.infibeam.com/Toys_Games/ http://www.euromonitor.com/toys-and-games-in-india/report http://www.kitchentablecomputers.com/dls_toys.php http://wiki.answers.com/Q/FAQ/2167 Images retail magazine, sept.edition.

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