By Vijendra Babu N
The Indian toy industry has made rapid strides in the last five years, driven mainly by export opportunities and government-friendly policies like QCOs (Quality Control Order) and a higher duty on imports. India has made great strides towards becoming an export-oriented economy for toys. The recently released report, “Success Story of Made in India Toys” by the Indian Institute of Management (IIM) Lucknow, clearly highlights a rise in exports by 293% in FY 2022-23 in comparison to FY 2013-14.
India has made good progress towards becoming a global toy exporter, but it is more critical now to build on this success and work closely and collaboratively with global toy and consumer products companies that have an outsize impact on the trajectory of India’s toy industry growth. India can play a major role in global toy industry by further encouraging potential for domestic production to attract systematic investments in infrastructure in a labour-intensive industry.
Transforming India as a Global Manufacturing Hub
India can indeed achieve scalability in toys manufacturing by adopting Contract Manufacturing for global brands and retailers - a model that has been successfully leveraged by China and Vietnam. This model could be key pillar of the ‘Make in India’ initiative, showcasing India as a global manufacturing hub.
Today, like it has been happening in the majority of sectors, toy industry is also witnessing a ‘China plus one’ opportunity, where customers look at India as an alternative. Domestic growth is driven by rising disposable income, though per capita consumption is still low at $1 vs. $300 globally.
The report by IIM also highlights that “India can learn from the industrial environment, specifically for the toy industry, in China and Vietnam. Adopting similar strategy and creating conducive environment to encourage domestic production and incentivizing international toy brands to use India’s manufacturing capabilities can boost India’s position as a global toy hub.”
Major companies play a key role in facilitating the transfer of technical know-how. We can significantly increase the speed of knowledge acquisition in manufacturing and development by facilitating visas and travel by foreign technicians to India.
India can replicate China and Vietnam’s success in toy manufacturing by integrating into Global supply chains via Contract Manufacturing. Indian companies can focus on becoming the “Factory Floor” for the World’s Toy brands. With the right investments, partnerships, and policy support, this route offers the fastest path to Scale, Export growth, and Employment generation in the Toy sector.
Adopting New Manufacturing Technologies
The toy industry is shifting towards electronics, AI-based toys, and STEM toys, with educational toys going electronic too. Kids today are drawn to gadgets, so mechanical toys need to incorporate strong elements to appeal to them. A growing trend is ‘kid adults,’ where adults are embracing toys to disconnect from gadgets. Action figures remain a fashionable toy for both kids and adults.
To capture a lion’s share of this market, Indian firms need to adopt modern manufacturing technologies: Injection moulding, Design & Tooling, 3D printing, robotics, DIJ, Automations etc., to meet global quality and volume demands. At the same time, local capabilities need to be improved for new product development Speed (Design to Market) and Production efficiency to meet on time shipment schedules which is the most crucial requirement to scale.
(Vijendra Babu N is Founder, Microplastics Private Limited - MPPL).
Views are personal and do not represent the stand of this publication.
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