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2013-08-20

Chinese toys trigger shutdown of Indian SMEs: Study

Nearly 40% of Indian toy companies have closed down in the last 5 years and rest 20% on the verge of collapse as Chinese products are flooding into Indian market, the biggest threat to the Indian toy industry, reveals the ASSOCHAM recent study.

Nearly 40% of Indian toy companies have closed down in the last 5 years and rest 20% on the verge of collapse as Chinese products are flooding into Indian market, the biggest threat to the Indian toy industry, reveals the ASSOCHAM recent study.

 

China has the largest toy market in the world and account more than 45 percent in the World’s toy market whereas India’s Toy Industry has a meagre share of 0.51 percent, reveals the ASSOCHAM recent study on “Indian Toy Industry- the current scenario”. 

 

“Only 20 per cent of the Indian market is served by Indian manufacturers and rest by import of toys from different countries mainly from China and Italy.  According to the study, it is found that nearly 40% of toy companies have already closed down,” said D S Rawat, Secretary General, ASSOCHAM. 

 

Rawat also said that the biggest threat to the Indian toy industry is the competition faced by the Chinese products which offer a wide variety of toys to the people in India and are also available at cheaper prices. The Indian market is flooded with Chinese toys which are destroying the Indian toys industry and small and medium toy manufacturers are almost on the verge of collapse. 

 

The major toy producing units/ clusters are located in Delhi. Around 50% of the toy units are in Delhi and NCR, 35% are in Maharashtra while the remaining 15% are scattered all over the country. The toy industry in India is concentrated mainly in the small and cottage sectors, with about 4000 manufacturers in all, adds the study.

 

According to the study, Indian toy industry is estimated to be around Rs 8,000 crore as on March 2013 and is expected to grow at 30% by 2015 because of the rising demands of toys by the middle class population spending huge amounts for their children. 

 

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, added Mr. Rawat.

 

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

  

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

 

The following table shows the share of various brands in the Indian Toy Market:

 

Brand name    Percent share in Indian market

Mattel                              20%

Lego                                 4%

Hasbro                             9%

Funskool                       30%

Bandai                             4%

Leap frog                         3%

Others (Misc.)                30%

 

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