NEW DELHI, January 17: Toys have always enchanted children. And electronic toys, be it roaring guns or musical key chains, remain a hot favourite. With increasing disposable income and resulting consumerism, demand for such toys is on the rise. But stiff competition, both on the domestic turf and from China, has left the Indian electronic toy manufacturers struggling for survival. Low profit margins and regular launching of new products seem to be the only way by which the units can remain afloat.Though there is intense competition in the electronic toys business, the line holds a lot of scope for the innovative, says R K Sachdeva of VK Toys. "If a manufacturer can sustain the interest of customers with a wide range of toys, he can be successful." Sachdeva observes that children don't like ordinary toys. It is the action toys which interest them. "I keep this in mind whenever I go in for new designs." Recently, Sachdeva has come up with a whole range of small electronic toys which are simple but
interesting.
One is a birthday knife which plays music when it is inserted into the cake. Musical candles have also been introduced. But the toy which has caught the fancy of children most is a birthday cap with lights attached. Sachdeva says, "The idea was that since all the children at a birthday party wear caps, there should be something which can set the birthday boy or girl apart from the others. What could serve the purpose better than a cap with blinking lights?"
Sachdeva says that it is very important to keep the prices low. "It is not wise to cater only to the upper-class elite. The maximum demand comes from the middle class and prices should be such that it suits their pockets."
With stiff competition from China, Sachdeva says that it has become difficult for new entrants to come into the line. "Chinese price their goods so low that it is not wise for new people to enter without being backed by new technology."
Jagdeep Thakur of Playtime Creations Pvt. Ltd. feels that if a person does his
homework well before entering the field he should not face any problem. Thakur himself started the unit less than two years back and has met with commendable success. "A layman cannot be successful in the line. One has to be understand the nuances of the business. Knowledge of the import-export procedures is a must because the chips required for the electronic toys have to be imported." Complacence is one thing which an electronic toy manufacturer cannot afford, feels Thakur. "To stay in the market, a new product has to be launched every two months without fail." Thakur says that a new product does not necessarily have to do with a totally new concept. "New features added to the old toy can do the trick."
Toy guns available in the market can mostly play one or two tunes. Thakur has designed a toy which can play eight. "The additional tunes have increased the desirability of the toy as children have more to play with."Similarly, Thakur has designed a rocket launcher which has lights attached to it which go
on and off when the toy is operated. "The lights add to the effect," explains Thakur.
Thakur feels that in the sale of battery-operated toys, the brand name does not play a very important part. "The fact that brand names sell cannot be disputed. But un-branded products, with attractive features, can also find ready buyers." As Playtime Creations is a relatively new company, Thakur and his business partner are now busy expanding their dealership network. "The product of our company is of high quality and long lasting. The only thing that we require to strengthen our foothold in the market is a strong dealer network."
Paresh Chawla of Toys and Trends, a dealer in toys, says that demand for toys has increased with a change in the mindset of people. "Earlier, toys were bought mainly as gift for others. But now parents have started buying toys for their children too." Chawla feels that with a large variety of toys flooding the market and buyers eagerly going for them, the future of toy manufacturers is very
secure.
Others are not so sure. "It is not a cake walk," says Anuj Berry of Repute International. "There are several instances when newcomers have had to close shop unable to cope with the competition."
According to Berry, to survive in the business good contacts are a necessity. "An entrepreneur must have a fair knowledge of the market before stepping in so that he knows what he is in for. An investment of Rs 2-3 lakh is required to make a start."
Berry says that the uncertain nature of the market makes it necessary for the manufacturer to keep several varieties of toys at one time. "If one product does not work there should be others to bank on."
Manish Jain of Hansa Manufacturing Corporation expresses disappointment at the decrease in the profit margins which is a direct impact of increasing competition.
On the international front too, the going is getting tough. Jain blames the government for not providing any facility to the toy manufacturers. "We have to pay high duties on imported parts and
have to go through lengthy procedures even to pay our sales tax."
Jain says that with the present infrastructure the country has, an Indian electronic toy manufacturer cannot compete with China. "Chinese toys are so advanced and are available at such low prices that Indian manufacturers feel helpless before them."
Berry agrees with Jain but is more optimistic. "The fact that the electronic toy manufacturers have survived so far despite conditions not being conducive proves our strength." Berry says that if the international market is studied thoroughly and steps taken to improve accordingly, things can change. "Gradually, we can even emerge as one of the top players in the race."
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
