Simba India, a subsidiary of SimbaDickie Group, one of the world’s largest toy companies, is further expanding its retail reach in India by adding 19 more stores in its portfolio. Now a master franchise, Simba India is trying to make a difference in the business of toys, which is seen more as a luxury and less as an educational need.
In a conversation with Retailer Media, Shree Narayan Sabharwal, Business Head, Simba Toys India, expressed his concern over the price-sesitivity in Indian merket, the diversified needs of consumers and perception for toy industry.
How has been the the market experience of Simba toys in India?
We have completed 5 years of operation last October. The first couple of years were not so good as we were setting up as a new company, a new subsidary in India, but last 2 years have been really good and we have been growing at a decent rate. Last year we grew by almost 50 per cent and this year we are expecting a growth rate of almost 30 per cent.
Now when you have completed 5 years, how do you analyse the Indian markets for toys?
Definitely there is a demand which has been rising except for last couple of years, i.e. fiscal year 2013 and 2014. I have been with the business of toys for about a decade and this segment has been growing at a steady rate of 18-20 per cent. During last 2 years, the growth rate has been 8-10 per cent. The fiscal year that ended this march was sluggish in terms of growth.
What differences do you find between India market and global market, with respect to the toy industry?
One of the prime differences is that India is a very price sensitive market. Also, toys as an industry is not very recognised in the Indian market, reason being, Indian parents consider toys as something for luxury or entertainment rather than something which is educational in nature.
The biggest difference is that as the kids grow up, their exposure to toys is advocated by the paediatrician and their suggestions matter. It has started happening in big cities of India and because of Internet, parents are becoming more aware. But the price sensitivity is still there. Parents buy toys, only when it is their child’s birthday or some other special occasion, otherwise they are of impulsive nature here in India. While in the West, certain percentage of income is devoted for toys.
As you said, in India, toys are presumed to be a part of luxury, have you strategised anything around educating the parents?
There are a few things that we do on a regular basis. We have to understand that India is a very price sensitive market, so we have to educate the customer that why a particular toy or brand is expensive than the ones at their neighbourhood shop.
What are the parameters used by Simba while designing a product?
We are a German company and everything we sell under Simba has guaranty and has passed certain certifications which comply to EN 71 standard. It means, if there is a remote controlled car, the paint used is absolutely lead free and not at all harmful for kids. Also, it indicates that the plastic used is 100 per cent pure and not recycled one.
What are your strategies to garner consumer engagement?
We are running campaign to create awareness and educate the customer on regular basis. We conduct test markets and best way to do so is to understand, how the customer has evolved. These days, the customer has diversified. Something which sells in Mumbai may not churn great revenue in Kolkata, or even in the north of Mumbai.
How many stores are in pipeline?
Currently, we have six stores and are planning to have 25 stores up and running by the end of this year. Since toys are not seen as an industry, and people generally head to only hypermarkets or supermarkets to buy them, we want to create toy stores across India. We have identified cities and what matters for us is the location of the store rather than city.