The company is also keen to explore emerging trends of play with unique products and concepts.
With a keen eye on the behavioural and consumption patterns of parents’ of new-borns and millennial toy buyers, Funskool
is expanding its portfolio of labels for early learners. Its aim is to keep the brand relevant amidst an overall slowdown in the business and at the same time, with a greater push towards online marketing
and retail, keep the cost of new launches under control.
The $1.4 billion Indian toy industry is under pressure. And for Funskool, a traditional toy brand that has spent the past 30-plus years building its retail
network offline, these are challenging times. Hence the need to find markets resilient against economic slowdown and keep costs down. “Funskool
has had a decent run as a brand. The products have good consumer connect and consistently good quality. The challenge for them is to continue to innovate as streaming content and toons dislodge toys for kids and parents, for share of attention, entertainment and pocket,” says Sandeep Goyal, founder of Mogae Media.
digital focus is driven partly out of the need to keep costs down but also because it helps take the brand into hitherto uncharted geographies. At present, Funskool
said, around 15-20 per cent of its business is generated online, especially in the small towns. The company has also been using digital channels to market its new toys to young parents.
Funskool has recently acquired the licensing rights for VTech, a Hong Kong-based electronic toy manufacturer, Japanese brand Sylvanian Families that makes toy collectibles, Bunchems brand from Canadian firm Spin Master and Thailand-based PlanToys–all aimed at the infant to pre-school kids segment.
Urban Indian parents want safe toys that also tick the boxes on sustainability and age-appropriate learning abilities for their infants and toddlers. John Baby, CEO, Funskool India says that by bringing new brands for this segment into the country, the company is tapping into the opportunities in the market. However, he says, “Funskool is constantly investing and working on new products from its own stable and the share of its own products in its toy business will touch 50 per cent by 2021.” It used to be just 20-odd per cent of the total pie three to four years back.
The international line-up is aimed at well-travelled young Indians while a stronger digital presence is meant to unlock the potential for all brands in the Funskool stable. Baby expects the present market share of 10 per cent to go up to 15 per cent but does not pin a timeline to his projections. Funskool’s revenue has stayed nearly flat at Rs 225 crore in FY2019 and new products and launches are expected to spike the curve. Through sustained digital campaigns, the brand also expects to emphasise its brand values and present a credible alternative to cheap toys made in China. “Funskool is a nifty brand. It has the ability to leverage the best partnerships to produce affordable toys. Its success is its price,” says Harish Bijoor, founder Bijoor Consults.
Baby says, “The way forward is through new launches and concepts.” He believes that Funskool as a brand can entrench itself deeper into the marketplace by offering a good mix of global and local labels.
"For example, for VTech, there is no competition in the electronic toys segment. To build a similar product it will take a decade of struggle and investment,” Baby says. The infant to pre-school segment (new born to 36 months old) is the biggest category and is globally around 30 per cent of the toy market. In India, it is around 33 per cent of the market and this is where Funskool wants to stamp its dominance. It has its own label Giggles with around 130 products that serves this market but Baby believes the category can hold up to 3000-5000 products.
While the focus is on building an arsenal of labels for the early-learning category, the company is also keen to explore emerging trends of play with unique products and concepts. Funskool has teams working on design and packaging of new games for all ages, even for low-volume segments such as the emerging opportunity for board game cafes.
The company has also begun working with influencers to build an identity for the brand online and is engaging with numerous on-ground promotional efforts.
According to market research firm IMARC Services, the Indian toy market was worth $1.5 billion in 2018, registering a compound annual growth rate (CAGR) of 15.9 per cent during 2011-2018. The market is further projected to cross $3.3 billion by 2024, growing at a CAGR of 13.3 per cent during 2019-2024. All these projections may well crumble under the onslaught of a prolonged slowdown, hence the hunt for resilient markets by brands of all shades and hues.