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Toy

Toys have been an integral part of childhood, and in India, there is a diverse and culturally rich history of traditional toys. With the growth of Indian economy, the toy retail industry in India has witnessed significant growth over the years. India’s toy market reached a value of $ 1.5 Billion in 2022 and it is projected to reach UDS 3 billion by 2028, growing at a CAGR of 12.2% during the forecast period of 2023-2028. The growth is being led by factors such as rising incomes, increase in number of children, a growing middle class, and increased awareness of the importance of play in child development.

The industry has evolved with changes in technology, culture, and economic conditions, and children in India now have access to a wide variety of toys that reflect both local and global influences. Historically, traditional toys made of natural material such as clay, wood, or cloth, by artisans and craftspeople in India were sold locally and at fairs. In the 20th century, with the growth of international trade and globalisation, imported toys such as plastic toys, action figures and board games became more widely available. Fast forward to the early 2000s, with the growth of the Indian economy, local retailers such as Funskool developed and produced a range of toys.

Now with the advent of technology, electronic toys such as robots, interactive games, and remote-controlled toys have been in popular demand. More recently, there has been a growing interest in educational toys in India. The creation of toys like science kits and coding games are being designed to facilitate children learn skills, such as problem solving, creativity, and critical thinking.

This transformation in the country’s toy retail industry has involved new players entering the market, traditional retailers expanding their offerings, and online sales channels gaining traction. While there are various artisans, craftsmen, and small businesses involved in this transformation, the toy retail market is presently dominated by both global and domestic players. Some of the major global players include Mattel, Hasbro, Lego, and Bandai Namco. Domestic players include Funskool, Hamleys, and Playgro Toys India. These companies are expanding their reach by increasing their product offerings, opening more stores, and exploring online sales channels.

The growth of the retail sector in the Indian market is being propelled by multiple factors. Firstly, the increasing number of children in the country. According to the United Nations, India has over 300 million children in the age group of 0 to 14, the largest across the globe. The country is estimated to have ~17% of the world’s child population by 2036. Therefore, over the years the demand for toys is likely to only move upwards.

Secondly, the rising disposable income of families in India. As 140 million households move into the middle class and another 20 million move into the high-income bracket, consumption across all categories will grow; parents can spend more on toys for their children. This trend is expected to continue as the country’s middle class expands.

Other key drivers include the increased awareness on toys having a positive effect on child development, growth of e-commerce as a sales channel, the veteran artisans of India and their toy legacy of over 5000 years, and most importantly the government’s focus on boosting sourcing and toy manufacturing with favourable government policies.

In 2019, the government of India eased local sourcing norms under single brand retail trading (SBRT) provisions of the FDI policy to encourage sourcing by companies for their global and Indian operations. This move has created a great opportunity for companies to consider India as a sourcing destination in addition to the progressive retail opportunity it offers. Additionally, the policy permits 100% FDI in SBRT under the automatic route.

Further, under the Atmanirbhar Bharat Abhiyaan or the self-reliance campaign launched in 2020, toys were identified as one of the key sectors, and measures such as establishment of toy clusters and the creation of a toy-friendly ecosystem were announced. The government also devised a National Action Plan for toys in consultation with central ministries and departments, to reduce India’s reliance on imported toys and enhance local manufacturing.

In the backdrop of government’s policies impacting the toy industry, companies such as Hasbro have significantly increased operations in the country. In an interview given in 2020 to a leading news leading, the Country Manager for South Asia, Hasbro said, “the organisation has its sights fully focused, and its commitment to ensuring that India becomes an investment destination for the next at least three, four, decades."

In 2021, the Indian government through an inter-ministerial effort launched the Toycathon. The Ministry of Education led the first edition of Toycathon to challenge India’s innovative minds to conceptualise novel toy and games based on Indian civilization, history, culture, mythology, and ethos.

Furthermore, the government has launched a first of its kind Indian Toy Fair. It is an annual event that brings together all stakeholders from the toy industry ranging from toy manufacturers, associations, investors, startups, artisans, MSMEs, children, parents, teachers, etc. on one common platform. The first edition of the event was held in 2021 and was attended by over 1,000 exhibitors. Prime Minister Modi during his speech at the Toy Fair said, “toys have a significant role in the development of a child’s mind and help improve psychomotor and cognitive skills in children. Toys also provide a way to learn about the environment, society, and culture,” laying focus on the importance of toys in child development and education.

Toys and play materials are essential tools for promoting creativity, imagination, problem solving and social skills in young children. Recognising these benefits of children’s play, the Indian governement introduced the National Education Policy, 2020 (NEP). The policy states that play based and activity-based learning should be integrated into the curriculum for children up to the age of 8. Furthermore, to promote the growth of toy industry in India, the NEP also calls for the development of a new national toy policy, that aims to create a favourable environment by promoting the design, development, and manufacturing of toys in India.

Additionally, Shri Sanjiv, Joint Secretary, Department for Promotion of Industry and Internal Trade (DPIIT) has said that the government is committed to supporting the industry and will create a conducive ecosystem for its growth. He further said, “the toy retail market in India is a vibrant and growing sector that offers immense opportunities for both local and global sellers. India is proud of our local toy craftspeople and sellers, who have been producing quality and innovative toys for generations. We are also delighted to see global toy brands in and entering India, who bring their expertise to influence the rich toy industry in India. We believe there is potential for collaboration between local and global brands, benefitting the consumers and India’s economy.”

In conclusion, the toy retail industry in India has seen significant growth in recent years, championed by the government. However, for the sector to achieve its full potential, it must continue to evolve and expand. Players in India can focus on developing unique products that cater to the needs of the local consumers.

Retailers can also expand their distribution network by forming partnerships with other retailers, online marketplaces, to increase reach and accessibility. The government and industry can also collaborate with educational institutions to promote the use of toys in play-based learning, including training teachers on the benefits of play-based learning. By integrating toys with educational resources, the value of play in child development can be emphasised for parents and caregivers. Overall, the industry and government working in tandem can ensure the toy retail industry in India continues to thrive and meet the needs of consumers.

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