NEW DELHI, November 7: It is big, diverse and complicated. The Rs 300-crore toy market in India is more than just a toytown. From soft toys to the latest in electronics, it has everything. The potential is more but market penetration, as far as exports are concerned, is little. The reason sounds familiar -- it is a case of first selling India's brand identity.

It is not that nothing is being done. The players in the field are not merely playing, literally. As D C Jain, vice-president of the Toy Association of India, would like to put it: "It is not a child's play. The toy business has in it all the applications of other industries. And as far as the exports are concerned, we have to first sell India."

Jain's family has been associated with the toy industry from the 40s when his father, K C Jain, had set up the first toy unit in the organised sector.

Starting a toy unit is not an expensive venture. One can begin it with negligible investment. This leads us to believe that after all things are not really difficult. "You can open a business even with Rs 100. There are enough financiers sitting in Delhi's Sadar Bazar, who are ready to put in money for helping a starter," maintains Ashish Gulati of Lakhmi Das and Co, a part of the Eldico group. No wonder over 91 per cent of the business in India is dominated by the small-scale units. There is no dearth of skills also -- from cheap labour to skilled ones, there are enough hands available. "But to be successful and beat competition from countries like China, we need to create volumes. In fact, in this business, volumes are very crucial," feels Ajay Gupta, joint managing director, Hanung Toys (India) Ltd.Gupta claims to be the biggest toy exporter in the country with $3 million export sales. "We are, in fact, pioneers in the export of stuffed toys."

Gupta maintains that the toy market as also the industry in the country is very small compared to the world market. "But it is growing fast at a rate of 20 to 25 per cent. In future, it is set to grow even faster, much ahead of all the other sectors in the country," adds Jain.

The fast growth rate is, however, not peculiar to the Indian scenario. The global market, estimated at $60 billion, is expected to double by the beginning of the next century. India is yet to cash in on this boom in the global market.

Thirty eight per cent of the total world production takes place in China though the global toy market is dominated by the United Kingdom. Out of $2.56-billion UK market, $1.73 is the import component with China topping the list of sourcing countries. In the global market, electronic toy segment accounts for the largest market share followed by plastic and stuffed toys. The Indian toy industry too has a varied list of products which can be broadly divided into electronic, dolls, educational, board games, indoor games, infant and preschool toys, mechanical, soft toys, ride-on and hobby toys.

India, with its Rs 28-crore worth toy exports last year, has a negligible share in the total world trade though Raj Kumar, president of the association, is confident that the quality of Indian products can match that of anywhere in the world. He, however, admits that there were no efforts on the part of the government for the development of this industry till recently. "It was only last year that the toy industry was attached to the Electronic and Computer Software Export Promotion Council," points out Kumar. China with its bulk production and government support is able to produce toys at a much cheaper rates. However, in India, feels Jain, when it comes to producing in large volumes, manufacturers are often not able to maintain quality consistency. "It may be a low investment industry but for creating quality with quantity, capital investment gives the results."

Jain is also critical of the government policies. "We are puppets in the hands of the government since the whole country needs a good marketing besides some concrete policy changes." He cites an example of the duty structure. For a product manufactured in India, 80 per cent of the cost comes from customs and excise. According to Jain, for a finished product, the figure stands at just 30 per cent. "This means that the domestic manufacturers, who are using imported inputs, are being discouraged. Imported finished products are getting a better deal from the government."

Strict norms governing the manufacturing of toys had till now been limited to the West. But with growing consumer consciousness, manufacturers have to adhere to stricter norms. "We are checked for the toxicity of the inputs we use. Though we use imported non-toxic paints but Indian paints are also not bad. However, no paint manufacturer wants to guarantee non-toxicity of their products," complains Jain who also owns Masoom Playmates.

According to Gupta, all types of products find acceptance in the market though in his own line of stuffed toys, it is teddy bears which are most popular.

There is a market acceptance of not only all types of products but also price, feel the toy manufacturers. Right from a lowest of Rs 5 plastic toy to Rs 2,200 doll and an expensive video game, all the segments have their own market.

This is the reason that the domestic manufacturers do not feel threatened by the coming of big names like Lego and Barbie though the latter have an advertising advantage over the others.

Advertising adds to their overheads and makes their toys expensive. But in this trade where one is dealing with children, a constant beaming of advertisements goes a long way in determining sales. Jain, however, feels that contrary to the popular belief, parents are a deciding factor in this business. After all, it is they who fish out money.

Moreover, as Gulati points out, there is a very huge segment of gifts in this sector, in which case, it is the parent or the elder person who decides what is to be bought. He, however, says that it is the children whom they target through innovation. In the ultimate analysis a strong dealership network is what counts. Jain, with Rs 2-crore turnover, claims to have 40 direct distributors all over the country. "We have even touched the rural market," he says. Gulati's Eldico group, on its part, has distribution and trading as its main stake. When it comes to fundamentals, it is the product which is to be sold even if it is a toy, it is no toy business.y

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.