Toy market India

India’s market potential

The Indian toy industry is estimated at about 400 million US dollars and until now has generated only 0.5 percent of the global market. However, a continuing growth promises a rapid rise in this statistic, especially in the context of the growing middle class and increasing demand for quality and luxury goods.

In recent years, cities like Ahmedabad, Bangalore, Hyderabad and Pune have become the most important manufacturing sites of the Indian toy industry. Among the local manufacturers in India about 59 % are still focusing on the production of cheap and unbranded toys which appeals to the price-sensitive Indian consumers. In the future it is expected that these companies will shift towards branded toys as well to stay competitive with international companies.  

Internet retailing is an important distribution channel due to several reasons. Consumers have increasing access to the internet and online retailers often have better merchandise in terms of variety, new launches and the offer of branded toys. The share of internet retailing in sales grew from 1 % in 2007 up to 18 % in 2012.

Focus on quality

Indian consumers pay more and more attention to high-quality products and thus branded articles. Although the price is often still the major deciding factor, its importance is relatively less in the case of well-known branded toys that promise good quality. Especially remarkable is the fact that 64 percent of consumers plan their purchase and as many as 57 percent of these look for a specific toy or game.

Factors in the decision to buy

The children usually accompany their parents and have a direct influence on the decision to buy. TV advertising plays a major role here. The most popular product categories are electronic toys, followed by soft animals and hard toys.

Presents make up a significant share of toy sales. Indian tradition demands that the person receiving a present must give back something similar. Experts suspect that this accounts for about 50 percent of the market for gifts for people outside the family.