Toys are no longer limited for ‘fun’, and are increasingly playing an important role in the development of a child. In addition, there is growing emphasis amongst parents for toys with suitable safety features. And to leverage these opportunities, Exelixi Management Company, the master franchisee for Germany-based The SIMBA Store, is in the midst of aggressively expanding the retail network on a pan India basis.
In a conversation with Sweta Pal, Shree Narayan Sabharwal, Business Head, Simba Toys, highlighted their strategy over the next few years.
Kindly throw light on the growth of Simba Toys' activities in India. Also, why did you choose the franchising model in the country?
Simba India started operations about four years ago, and our portfolio includes several brands and over 2,000 SKUs, and within a short period, our retail network has expanded to 23 standalone stores across the country.
We have chosen the franchising model as local partners have a ‘deep’ understanding of consumers and the operating environment along with a cost-effective strategy to expand our distribution network.
What is your marketing strategy in India? In addition, kindly highlight the growth opportunities in the broader domestic toy market?
We offer a wide range of high quality imported products, and it forms the basis for our ‘engagement’ strategy with consumers and our retail network. In addition, we also partner with large retail chains to spread greater awareness for our product portfolio along with promoting education-based toys.
The domestic toy market with annual sales in the range of $ 1 – 1.5 billion (nearly Rs 6, 000 – Rs 9, 000 crore) is still dominated by the unorganised sector, but with growing emphasis amongst parents for ‘safety’ and allied functional features, we expect a strong growth over the next few years. And, while we account for about seven per cent of the organised segment, we are aiming to double our market share over the next two years.
Which are your bestselling brands and product categories in India?
In the dolls segment, Steffi Love is very popular amongst girls aged between 2 and 9 years, while Majorette, a remote control car, is en vogue with boys aged 3 and 11 years. In addition, demand has also been strong in the outdoor segment for our brands like Smobyand Squap.
Are licensed toys enjoying better sales growth vis-a-vis generic toys?
Yes, the growing popularity of a range of TV-based serials and allied programmes has led to strong demand for licensed toys including Disney Princess, WWE and Krrish 3.
What are your expansion plans, and the investments required to support this strategy?
Our master franchisee Exelixi Management Company will expand our network of ‘The SIMBA Store’ to 50 by the end of the current year.
Our distribution network currently includes flagship stores in Mumbai and Bangalore along with ‘regular’ stores in Indore, Bhopal and Chennai, and plans are underway to expand our presence, especially amongst tier-II towns on a pan India basis. As part of this strategy, we plan to follow a hub-and-spoke model, and the flagship stores in the metros would support regular stores in smaller towns.
Our stores in non-metros would offer a similar ‘experience’ to children and their families, but with a comparatively smaller product range.