Indian toy industry is facing tough competition from China. India needs to be innovative for long term market sustainence.

1. Topic of discussion:-
 Innovation is the key to sustain in the market.
 Impact of Globalistion on Channapatna toy
 Important statistical data.
 Working Environment in toy industry

2. Facts
• Traditional toy sector is a Labour Intensive Industry
• Predominantly based in Small and Tiny Sector
• Use of Multiple Technologies & machineries for production Technology
and varied Raw Materials
• Estimated Industry turnover is approximately Rs. 1500 crores in the
organised Sector and about Rs.2500 crores in the unorganised sector
• Annual growth rate is around 15 to 20%.
What the Toy Industry means to India
• Employment to over two million people (70% women workforce)
• Workers mostly from economically and socially weaker sections

3. Toy Market Country Market
Country
Size Share in Spending Kid to 15
(US $ World Toy per Kid $ Population
years old
(%)
Million) Market (%)
United States 21,680.83 27.7 281 61.6 20
Japan 5,823.62 7.5 286 17.4 15
China 4,527.07 5.8 17 267.4 1
United 4,127.57 5.3 348 10.3 13
France 3,585.74 5.1 293 11.9 13
Germany 3,189.37 4.1 223 11.4 21
Brazil 2,091.94 2.7 38 52.9 3
India 1,939.50 2.5 5 361.4 0
Mexico 1,794.85 2.3 53 32.6 4
Italy 1,703.22 2.2 185 7.9 14
World Toy Market -Top 10 Countries in the World

4. Innovation-Key to sustain
China is the biggest toy producing country in the
world.
China accounted for more than 33% of global
exports of toys, games and sports requisites in
value terms during 2006 as compared to India’s
global share of a meager 0.185%.
Innovation is perceived as very important by
almost all the responding units. The design aspect
of toy manufacturing was considered as one of
most important activity by 98% (high 92% + very
high 6%) of the responding toy manufacturers

5. Overview of Toy Manufacturing:
Indicators 1995-96 2000-01 2005-06
Number of Factories 843 748 839
Number of Workers 28008 33899 48321
Gross Value Added
27614 42737 48734
(Constant Prices 1993-94=100)
Value of Output
122460 179098 233495
(Constant Prices 1993-94=100)
Capital stock
56940 281045 377660
(Constant Prices 1993-94=100)

6. Trade in Wheeled Toys designed for children (e.g. Tricycles, Scooter, Pedal
Cars, Dolls Carriages) between India and World Market
Year
Export
(Rs. Lakhs)
Import
(Rs. Lakhs)
Trade Ratio
(Export/Import)
1996-1997 4.13 25.31 0.16
1997-1998 12.7 88.4 0.14
1998-1999 13.67 173.84 0.07
1999-2000 11.12 205.12 0.05
2000-2001 32.88 242.98 0.13
2001-2002 11.55 180.34 0.06
2002-2003 114.66 201.06 0.57
2003-2004 114.51 318.97 0.35
2004-2005 251.91 427.69 0.58
2005-2006 98.02 613.07 0.15
2006-2007 115.91 1,016.44 0.11
2007-2008 98.37 175.23 0.56

7. Sources of China’s Price Competitiveness
– Low wages
– Counterfeiting and piracy
– Minimal worker health & safety regulations
– Lax environmental regulations & enforcement
– Export industry subsidies
– A highly efficient “industrial network clustering” and large scale operation
– The catalytic role of Foreign Direct Investment (FDI)
– Superior infrastructure - both general and specific to toy sector
– Proximity to Hong Kong
– An undervalued currency

8. Toy Clusters of Guangdong Province, China

9. Different Sources of Price Advantage for China in the Toys
Sector
S.No. Sources of Price Advantage Percent
1 Wages 39.41
2 Subsidies 16.71
3 Network Clustering 16.02
4 Undervalued Currency 11.44
5 Counterfeiting & Piracy 8.63
6 FDI 3.09
7 Health & Safety 2.44
8 Environmental 2.26
TOTAL 100.00

10. COST ANALYSIS:
SL NO PARTICULARS Rs.
1 Cost of wood:-
 Government rate (classified by forest dept, under timber
tree)
 Private suppliers
1200/ton
900/ton
2 Cost of lac
 Highest quality lac ( Button Lac )
 Medium Brown Color
 Poor quality lac ( dark black)
120/kg
80/kg
60/kg
3 Screw spine / tale gari leaves. 20/100 leaves
4 Monthly salary of skilled labour 5000-6650/month
5 Daily wage worker 200-400/day
6 Price range of toys 30-1500/-

11. State wise Distribution of Toy Manufacturing Units

12. (1) Category of Toy Manufacturing Units AND (2) Percentage of Units
having Quality Accreditation
(1) (2)

13. EX-IM STATUS: Only 6.3% of the responding units
are exporters of toys. The reasons for not
exporting has been cited by respondents being
no knowledge of export procedures (75%) and no
help from authorities/association (25%).

14. (1)Growth of Domestic demand in recent years
(2)Competition in the domestic market from Imported
products
(1) (2)

15. WORKING ENVIRONMENT
 The operating workplace of the workers is
usually dusty.
 No one uses precautions like masks. The
surrounding in working rooms is very humid. The
factories are usually sheet/shed factories.
 Use of bare hands while working can be pretty
hazardous to them.
 The workers stop working when there is no
profit and they show no much interest in teaching
their art to the next generation if there is good
export, it can be a good motivating factor for
them to work harder.