Worldview
Limitless opportunity F
Richa Dikshit of Toy Tasting, an independent video channel on YouTube run by mothers about toys, presents an independent look at the importance of toys in India.
rom a marketing standpoint, India is more like a continent with many different cultural and economic hues. Getting to understand the consumer requires peeling back many layers. For those evaluating entering India, I
trust this article helps set you on the right course. Let’s start by stating the obvious: kids are the same everywhere. Their attitude towards learning and their inherent potential is no different from their peers in the developed world, and here’s a story to prove it: as part of Toy Tasting, we receive toys from various toys companies for the making of user-generated videos for our YouTube channel. Now, every three months we select a publicly funded school in Mumbai to donate these toys to. I recently received feedback from one such school and the administrator wanted to highlight the remarkable improvement in language skills in a second grade class. The cause seems to have been the addition of Rory’s Story Cubes to their curriculum. This award-winning toy dramatically increased the level of interest in class activities. The kids in this class were even doing better than expected in mathematical abilities. A cause and effect that would make Newton proud.
“It’s the parents” When I was growing up, there was no exposure to international toys. I can safely say that most of the current generation of parents is not very different. Now, from a growth and learning perspective, the gap was not that we didn’t have Barbie, it was the absence of educational toys. As a consequence, today we have a large
proportion of parents who, because of their own childhood experience, don’t see toys as an important ingredient in their child’s upbringing. So while books are seen as useful, toys are often seen as an indulgence rather than as something of value. So the targeting in India must start with the
parent. They need to be educated and convinced of the ‘value’. Part of this is simply describing how the toy is useful to their child. But this is easier said than done, not least because trained staff are rare, even in organised retail. However, the internet provides an avenue for creating that awareness effectively. We find online toy stores are already effectively using video to increase awareness. Overall, describing the value of a toy usually comes down to the skills that the child will get to develop while using the toy. In our own studies we’ve found that once Indian parents are convinced about the toy, they also invest time playing with their kids. The child reciprocates better when the parent is directly involved, leading to healthy parent-child bonding. As a result, everyone’s happy. Even for the teenage segment some
communication efforts needs to be directed towards the parents, as they control the purse strings, and much more aggressively in India. This is, albeit a part of, the reason why licensed toys have done poorly in India. Efforts at the industry level will also go a long way. Ernst Kick and his remarkable team at the Nuremberg Toy Fair recently announced an Indian fair called Kids India with the first edition slated for October 2013. I am confident that such toy-specific events have the potential to dramatically increase the retail awareness of toys, and should have an open day for families to visit.
Findings from our recent survey We recently conducted a dip-stick survey in partnership with an online toy store in India. The survey covered 175 parents across six Indian cities. Each of these families would in purchasing power parity (PPP) terms be comparable to the average UK parent. Presented below are a few of the findings: Favourite activity: TV dominates, closely
followed by toys. Interestingly, in India video games still have a very low penetration, but where present video games crowd out other play activity. We expect video games (and digital apps) to increase share as penetration of tablets and smartphones increases. •
Often this veers towards
the metric of the proportion of women in the workforce. I
believe that in India, the increasing number of working women is not
driving change as much as the increasing number of housewives who have acquired the working-woman mind set.
The maths of future market size The popular market strategy heuristic goes that when the per capita income reaches the
Favourite toy: cricket leads the play activity of kids, followed by dolls. The low share of action toys is in line with our channel feedback on poor sales of movie-licensed products.
•
Source of toy awareness: friends and family is the dominant route for gathering information about toys. We expect the role of the internet to increase in line with the behaviour in developed markets.
• Brand awareness: consumer awareness of toy brands is poor. The most popular response was Disney and Barbie. Even with aided recall, our survey participants showed limited awareness of key brands like Fisher-Price and Lego.
Frequency of toy purchase: the national average for our sample was one toy every three months. Keep in mind that this includes sports equipment and could mean a ball or a racquet. However, it is representative of the frequency at which parents feel the need to add something to the playtime of their kids. While discussing the forces of change, I often get asked about the role of women empowerment.
•
$1,200 level, there is a take off in consumption; many a bet on this assumption has gone awry in India. In retrospect, the explanations largely revolve around the following: Limitation of a single data point: For such a large population, a single data point hides more than it reveals. Even for urban India, 41% of consumption spending is on food. Less than 7% finds its way to durable goods. Differences in ethnicity: Attitudes towards consumption is influenced by ethnicity. Every entrant should understand the nuances of the north, south, east and west. Price-sensitive nature of market: This feature is not unique to India. In the toy segment I have found parents to be quite rational when explained the features of a toy. It is another topic that, due to duties and high costs of retailing in India, toys are sometime priced significantly higher than in developed markets. Yet there is a creamy layer of Indian consumers with significant spending power. These are the top 3% households of approximately 11m kids which could on the average spend US$150 per kid. It is these families which should be targeted. Collectively they represent an opportunity of US$1.5b growing at 15% CAGR, and is expected to grow at that rate for at least the next 25 years!
I’d love to hear of your experiences or take your questions at
richa@toytasting.com.
Toyworld 55
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96