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Small & medium toy manufacturers in India fighting for their survival: ASSOCHAM

Updated: Aug 10, 2013 03:09:03pm
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New Delhi, Aug 10 (KNN)  Nearly 40 per cent of Indian toy companies have closed down during the last 5 years and another 20 per cent are on the verge of collapse as Chinese products are flooding into Indian market, reveals the ASSOCHAM recent study.

Indian toy manufacturers are facing difficulty in surviving in the market. Nearly 2,000 SMEs have closed so far in the last 4-5 years with the rise in imports from China & Italy. The manufacturers mainly from Allahabad, Delhi, Kanpur, Lucknow and Patna have closed down, said Secretary General ASSOCHAM, D S Rawat.

China has the largest toy market in the world and it poses the largest threat to the Indian toy industry.  The neighbouring giant’s toy products account for more than 45 per cent in the world’s toy market whereas India’s toy industry has a meagre share of 0.51 per cent, the study on “Indian Toy Industry- the current scenario” conducted by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) said. 

“Only 20 per cent of the Indian market is served by Indian manufacturers and the rest by imported toys from different countries mainly from China and Italy,” said Rawat.   
As a result, nearly 40 per cent of toy companies have already closed down, he said. 

The major toy producing units/ clusters are located in Delhi.   While around 50 per cent of toy units are in Delhi and NCR, 35 per cent are in Maharashtra while the remaining 15 per cent are scattered all across the country.   

The toy industry in India is concentrated mainly in the small and cottage sectors, with about 4000 manufacturers in all, added the study. 

The biggest threat to the Indian toy industry is the competition faced by Chinese products which offer a wide variety of toys at cheaper prices.

The total imports of the Indian toy industry have increased at a compound annual growth rate (CAGR) of 25.21 per cent in the period 2001-2012.  While imports from China have surged up tremendously growing at a CAGR of 30 per cent, imports from Italy have grown at a CAGR of 38.6 per cent in the period 2001-2012.

The highest growth in imports has been registered for Italy.  Imports from China and Italy are eating up the Indian Toy Market, stated the ASSOCHAM study.

Indian toy industry is estimated to be around Rs 8,000 crore as on March 2013 and it is expected to grow at 30 per cent by 2015 because of the rising demands for toys by the middle class population who do not hesitate to spend huge amounts for their children. 

The Chinese goods offer a wide variety at a cheaper price and attract children of all ages, the wide range including fun games, electronic toys, board games, construction toys, stuffed toys, educational games, toy cars, etc.

Currently, the industry employs around 30 lakh people both in the organized and unorganized sector. With the industry growing, employment opportunities are also expected to accelerate. ASSOCHAM study anticipates the employment to be around 50 lakh by 2015 with the industry growing at 30 per cent or more by 2015.

Small toy shops cater to the masses, while branded ones like FisherPrice, Funskool, Hamleys, Lego and Mattel cater to the middle and high-classes.  Some large MNC toy manufacturing units like Mattel and Funskool have their presence in India. Funskool Toys is the largest toy producer in India.   (KNN/SD)

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