Online sales of toys surge during pandemic, expected to grow further
With outdoor play time drastically curtailed during the pandemic, Indian parents chose toys and board games as alternatives for their kids’ recreation. According to data by Praxis Global Alliance, in FY21, the toy market in India stood at Rs 14,000 crore, and is expected to grow at a CAGR of 13-14% till FY25. The online channel is contributing significantly to this growth. In CY20, the online toy market grew by 27%, in comparison to CY19, according to Forrester.
Brands such as Hasbro, PlayShifu and Funskool are launching new games and toys, strengthening their digital presence and expanding their overall retail footprint to serve this demand.
Vivek Goyal, co-founder and CEO, PlayShifu, says the company’s business has more than doubled since March 2021, in comparison to pre-pandemic. Under its science, technology, engineering and mathematics streams, PlayShifu launched Orboot Mars and Orboot Dinos toys in the past six months. “Due to the demand for educational toys, we introduced two products to help children understand fact-checking easily,” says Goyal.
Since March last year, the company has been focussing on its direct-to-customer (D2C) channel. “Contribution from online channels, both D2C and marketplaces, to our overall business grew to 80% from April 2020. This was 50% pre-pandemic,” Goyal shares. PlayShifu added five fulfillment centres last year, to ensure seamless delivery across channels.
The government’s regulations on imports from China, enforced from January this year, has meant a hindrance in supply. PlayShifu, hence, shifted the manufacturing base for its Plugo gaming kits from China to India in June, 2021. “There is demand for Plugo, a grammar building game for children between 4-10 years, so we wanted to ensure smooth product availability,” Goyal adds.
Similarly, Funskool has been expanding its manufacturing units in Ranipet and Goa, as we;; as sprucing up its online channels. R Jeswant, CEO, Funskool, says, “There has been a 50% growth in overall business via e-commerce sales since last year.” Funskool has introduced traditional toys and board games such as Kho Kho, Kabbadi, Chaturanga and Gilli Danda this year.
Buoyed by double-digit growth in the board game category during the pandemic — games such as Monopoly, Jenga, and Twister — Hasbro India launched two card games, Monopoly Deal in Hindi and Monopoly Bid, this year. Lalit Parmar, commercial director, Hasbro India, says, “These games helped us penetrate deep into the Indian market due to language integration.” The company has seen an increase in sales from e-commerce, especially in tier I and II cities.
Branded toys have especially benefitted as parents and kids looked for alternative entertainment avenues. “During the pandemic, people relied more on branded products to ensure quality,” says Sanjeev Kumar, forecast analyst, Forrester. Branded toys, he says, have the potential to drive the market in the coming years, given their high-ticket products.
A lot will depend on how quickly these companies overcome the supply crunch resulting from the curb on imports from China. “Till last year, 70-75% of toys were imported from China,” says Purnendu Kumar, EVP, consumer and retail, Praxis Global Alliance.
Analysts expect that as toy companies ramp up production in India, they will be able to sell at affordable prices. Given kids’ affinity towards Marvel and DC movies, Kumar says, these toy companies could partner with global production houses and acquire the rights to manufacture and sell their official merchandise here in India. This way, he says, they will be able to drive affordability and quality of products.