Toys have always been there. So, it is no surprise that archaeological remains from the Indus Valley civilization often include toys. But what of the toy market in India today?

In its composition, the toy market in India is largely imported toys. Yet only a few international brands( e. g. Mattel, Simba, LEGO) are maintaining a local presence of any depth. The explanation we often get is the current size of the toy market. Quite a few toy industry veterans lament“ a cultural indifference” to toys. Yet, in an earlier study we had estimated the size of the market potential to be US $ 2.3b.

So where’ s the Gap? We believe the answer lies, in part, with the poor experience at the point of retailing. In our market studies, we have never come across a parent or care-giver who has not expressed a desire to add to the toy basket of their kids.

With this in mind, we present below a customer perspective on the various“ points of toy retailing” in India. To present a common framework for evaluation, we will rate against the ingredients of toy retailing.

• Visual Merchandizing: Presence of uncluttered visual merchandizing that makes the flow of consumer evaluation consistent across a group of products

• Assortment: Availability of products to cater to varied consumer choice

• Purchase Assistance: We have found Indian consumers to be very focussed on the learning benefit from a toy. However, it requires a trained staff to explain the nuances and to talk that language

Online Stores The new kids on the block come with a lot of promise. The wide

assortment, competitive pricing, comfort of purchasing from home, are well touted benefits. However we feel toys in India will remain a high involvement product. In summer 2012, when the online megastore Flipkart announced its entry into the toys space, trade sources were excited. With time we have seen that fascination turn lukewarm. To be fair, dedicated online toy stores in India, like Yellow Giraffe, are making attempts to capture the recommendation style approach to selling. Overall, we believe the online route will no doubt contribute to growing the toy market in India.

Organized Retail Penetration of organized retailing is a low 8 % in India. When seen in the context of geographical spread, the absence is starker. But while organized retailing does a great job in improving the assortment of toys, it still struggles to get trained staff in place.

• Department Stores: In our retail audits we often found that when sales personnel were asked what a particular toy does, their response is to read from the description in the box. Highly uninspiring from a consumer standpoint! It is not surprising that department stores( e. g. Shoppers Stop, Landmark) have been cutting down on the space allocated to toys.

• Toy Retailers: Hamleys captured the imagination of the Indian consumer with its large box format and international style visual merchandizing. Trade sources gush at the tremendous push-power Hamleys has. Attempts by local players to establish dedicated toy stores( e. g. Beanstalk) have also received a thumbs-up from consumers.

Traditional Retail

• Gifts Store: Traditionally, this is where Indians buy toys. These shops sold a wide variety of merchandize, from home decor to electronics. They also typically had shelves of toys stuffed in. There’ s a little bit for everyone in these stores – so long as you didn’ t have too many questions. It works brilliantly for the hurried shopper who wants to pick up something within a budget. In our consumer surveys we haven’ t found a need to be seen as a thoughtful gift giver. The budget was the prime driver. If at all, it helped if the toy had lights and sound.

• Large Toy Store: This is a phenomena limited to the large metro cities like Delhi,

Mumbai and Bangalore. Mostly these are stores of large importerdistributors. Over the years, these stores have built a loyal following. The assortment is what made these stores a magnet. But even still the product mostly sold itself.

In Conclusion No doubt, pricing is an important factor and a highly elastic one at that. But assuming that pricing will eventually be determined by market forces, the missing piece in toy retailing today is sophistication at the point of retailing. While being critical, I must also state that we are optimistic. Just as their peers in other Asian countries, we expect Indians to be aggressive toy purchasers, once the retailing ingredients are in place.

About the Author Richa Dikshit is the Founder of ToyTasting. Formerly an investment banker with Merrill Lynch, Richa is based out of Mumbai, India- where she stays with her two daughters and husband.

Evaluation of Various Points of Toys Retailing

Online Organized Retail Traditional Retail

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