Corporate Reports
Toying with success
Funskool bets big on the fast-growing domestic toy market
F
unskool (India) Ltd, India’s lead-
ing toy manufacturing com-
pany, is expanding its capacity in
a big way. Promoted by the $2.5 bil-
lion MRF group, the Chennai-head-
quartered toy maker has been on an
expansion mode for the last 12-16
months and is looking to expand its
overall capacity at its three manufac-
turing facilities across Goa and Rani-
pet near Chennai, by over 80 per cent
in the next few months.
Having pioneered the concept
of quality and safety in toys in the
$1.5-billion domestic toy market, Fun-
skool has been instrumental in raising
the standards of toy manufacturing
B u s i n e s s I n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
and distribution in India. The
company is vying to more than double
its revenue in the next 2-3 years from
today’s R240-odd crore. The company
supplies about 60 per cent of its toy
production to over 30 overseas coun-
tries, including GCC, Europe and the
US.
Funskool, conceived in 1987 as a
joint venture between the MRF group
and the US toy major Hasbro Inc,
began commercial operations in 1988.
However, in 2014, the Hasbro Inc
decided to move out of the JV.
Funskool’s expansion move fol-
lows the government’s decision to
curb the surge in toy imports during
u 32 u
n ov e m b e r 27- d e c e m b e r 10 , 2 0 2 3
Jeswant:
expanding
portfolio
the past couple of years,
by increasing duty to 70
per cent, as also making BIS
(Bureau of Indian Standards) certifi-
cation mandatory for imports of toys.
These decisions, coupled with the gov-
ernment’s incentives to the domestic
players, have not only provided the
much-needed protection to the local
industry, but also encouraged local
players to expand their capacities in
order to avail the opportunities.
BIS certification
In October 2020, Funskool became
the first Indian toy manufacturer to
get certified by the Bureau of Indian
Standards for the safety of electric
toys – IS 15644 – for its manufactur-
ing facility at Goa, which also has the
B u s i n e s s I n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
licence – IS 9873-Part 1 – which cov-
ers non-electric toys. Also, its Ranipet
facility became the first toy manufac-
turing unit from South India to get the
BIS accreditation as per IS 9873-Part 1
standards for non-electric toys. The
BIS standardisation has been made
mandatory for all toys designed or
intended for use in play by children
below 14 years of age, by the Union
ministry for commerce and industry.
The new regulations set by the BIS
were implemented with effect from 1
January 2021. Today, all factories pro-
ducing toys in India are required to be
certified by the BIS and product test-
ing has been made mandatory. The
factories from which toys are being
imported into India are also required
to be inspected and certified by the
BIS. The government is now also plan-
ning to come up with PLI scheme for
the toy industry.
Experts believe that making BIS
standard mandatory will not only
restrain the imports of low quality toys
into the country (thereby providing a
level playing field to the domestic toy
industry), but also help good domestic
toy-makers like Funskool and others
to export to overseas markets. Buoyed
by the recent surge in demand, Fun-
skool is not only planning to increase
its footprint in the domestic market,
but also expand its exports base from
30 countries to about 40 countries in
the coming months. In the domes-
tic market, the company is competing
with Indian players like Playmate, Toy
Craft, MIKO, Play Panda and Buddyz,
as also global majors like Hasbro, Spin
Master, Fisher-Price, Lego and Mattel.
The domestic market presents huge
potential and is expected to grow at
a CAGR of 12-13 per cent in the next
five years.
As per an estimate, India’s toy
exports have increased 60 per cent –
from $203.46 million in 2018-19 to
$325.72 million in 2022-23 – while
imports, on the other hand, have
dipped 57 per cent – from $371.69 mil-
lion in 2018-19 to $158.70 million in
2022-23. Until a few years ago, over
70 per cent of domestic demand was
met by imports from China, Vietnam,
Hong Kong Malaysia, Indonesia and
Thailand.
“The situation in the last couple of
years has improved in favour of the
domestic industry with curbs on surg-
ing imports,” says R. Jeswant, CEO,
Funskool (India) Ltd. “With BIS cer-
tification becoming mandatory, the
inflow of cheaper toy imports has
dipped in a big way. All these have
encouraged us to revisit our plans by
expanding our capacities and adding
some more lines at our existing sites.
We have enlarged our offerings in a
big way to explore the opportunities
in the domestic and overseas markets”.
Backed by a workforce of about
1,000 employees, Funskool has three
state-of-the-art manufacturing facil-
ities. The first one at Corlim, Goa, is
spread over a sprawling area of 175,000
sq ft. The second and third factories at
Ranipet, near Chennai, have a built-up
areas of 108,000 sq ft and 68,600 sq ft,
respectively.
Foray into new categories
Supported by its own R&D and devel-
opment team, the company, having
over 400 SKUs under its own brands
and licences, is expanding its portfo-
lio in a big way. To meet the increasing
demands, the company is also plan-
ning to foray into new categories like
electronic and remote-control toys.
Another area where the company has
really made an impact is wooden toys.
Going ahead, it is expanding its man-
ufacturing of wooden toys, in pursuit
to its vision to bring back the popular-
ity of traditional wooden toys.
It has recently added to its Fun-
skool’s home-grown brands – Giggles,
Fundough and Play & Learn – products
like Ever Links (features 13 links in six
u 33 u
n ov e m b e r 27- d e c e m b e r 10 , 2 0 2 3
Corporate Reports
vibrant colours); My Pet Billy (an pull-
along cat toy designed for toddlers
aged above 18 months); Fundough
XL Pack (24 tubs of dough in an array
of vibrant colours); Stack a Rocket (a
colourful and engaging toy for chil-
dren suitable for children above six
months, with six rings with sensory
textures), Science Kit Senior (DIY kits,
apt for children above seven years) and
India Map (a 48-piece puzzle, suitable
for children above four years).
“Our focus has always been on
developing products, which have
multiple benefits like developing fine
motor skills and social skills, while
also ensuring that it is safe and keeps
children entertained for hours,” says
the Funskool CEO. “We want them to
get creative, indulge in role-plays and
have fun. We have also introduced
Baby Bath Support and Orbital Bath
Seat, which have been designed to
make bath time a joyful and safe expe-
rience for babies”.
“Funskool is certainly your child’s
preferred education partner – India
Map Puzzle and Science Kit Senior
prove that beyond doubt. Playing
with our products will improve overall
development of a child. Our research
team consistently brings out products
that are attractive and aid in the devel-
opment of children,” adds Jeswant,
who has been associated with the
company for nearly 24 years.
Being at the helm of affairs, he is
facilitating the smooth functioning of
business operations to help translate
strategic vision into action. His atten-
tion to detail, value-driven experience
Corporate Reports
across diverse strategic and
leadership roles and team
approach has always put
him at the fore front of chal-
lenging situations and has
witnessed a winner emerge.
Prior to joining Funskool in
2000, Jeswant had worked
with TI Cycles of India (as senior prod-
uct manager) and with Blue Star (as
general manager, sales).
Inorganic push
Apart from expanding the product
offering of its own brands, the com-
pany is also adding to its portfolio
in an inorganic manner where it is
acquiring the licences foreign brands
as also some Indian brands to man-
ufacture and distribute products in
the Indian market. The company at
present, manufactures and distrib-
utes products of foreign brands like
Ravensburger, Warner
Bros, Baby Shark, PJMasks,
Chu Chu TV, Pippa Pig,
Nickalodeon, Green Gold
Animation, Rummikub,
University Games, Othello,
Spin Master and Goliath.
In April 2022, Funskool
added another blockbuster to its list,
by acquiring the rights from Goliath,
an international toys and games maker
and distributor, to make and distrib-
ute its popular board game ‘Sequence’,
in India. Developed by Doug Reuter
in 1981, `Sequence’ is a combination
of a board game and a card game.
Often referred to as the ‘Perfect Fam-
ily Game’, `Sequence’ can be played
by two to 12 players. The game aims
at building strategy, planning, sports-
man spirit and team play along with
providing quality entertainment.
“Funskool always wants to bring
the best of toys and games to its cus-
tomers, and the association with
Goliath is another step towards it.
We have always been a frontrunner
in developing a cata-
logue of varied toys and
games through exten-
sive focus on innova-
tion and development.
We believe that this
partnership will have a
significant role in pro-
viding a unique synergy
of strengths to build the
B u s i n e s s I n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
brands further,” affirms the `Make-In-India’ initiative and
Jeswant. the acquisition of Chhota Bheem &
“We are glad to have friends has been a step in the right
begun our co-operation direction,” he adds.
with Funskool in the Indian “When it comes to making high
market,” says Jorge Aguila- quality and toxin-free toys for chil-
Collantes, general manager dren, there is no substitute for Fun-
ROW-Goliath. “We really skool in India,” acknowledges Samir
believe this step will allow `Sequence’ Jain, executive director & COO, Green
to grow and become one of the top Gold Animation, commenting on
board game brands in the Indian mar- the acquisition. “We are pleased with
ket, like it is in many markets in the licensing Funskool India with man-
world”. Some of the toys and games ufacturing and distributing Chhota
brands of Goliath include Rummikub, Bheem and other seven action fig-
Triominos, Rolit, Wordsearch, Pop the ures. With its expansive distribution
Pig, Doggie Doo and Gooey Looey. network prowess, we are confident
In July this year, Funskool acquired that Chhota Bheem action figures will
the licence to make and distribute the reach to every child in the country.”
popular action figure Chhota Bheem Funskool enjoys a pan India distri-
and other seven characters from the bution network. Backed by 10 ware-
famed animation series. The company houses and four regional offices
has obtained the licence to launch the – Mumbai, Delhi, Kolkata and Chen-
series of action figures from Green nai – the toy maker’s products are pres-
Gold Licensing & Mer- ent across 4,500 retailers. Apart from
chandising India, which physical channels, the company sells
is a pioneer in creating about 20 per cent of its production
original Indian anima- on online platforms like Amazon and
tion content and, has Flipkart.
over the years, estab- The last few years have been quite
lished itself as a promi- eventful for the domestic toy indus-
nent player in licensing try. The government has recognised
and merchandising, movie produc- the significance of the industry which
tion and distribution, digital business, has the potential to emerge as a global
retail stores and events. manufacturing hub. In the last cou-
“We are excited to add ple of years, the imports of
Chhota Bheem to our well- low quality toys have come
established manufacturing down significantly following
and distribution capabilities. imposition of higher duties
Our existing scale and distri- as also mandatory imple-
bution network establishes mentation of BIS certifica-
an ideal platform to achieve tion. All these have provided
the full potential of Chhota quite a conducive scenario
Bheem in India and will address the for toy makers like Funskool, which
significant unmet needs of the port- have expanded capacities in a big way.
folio of products,” says the Funskool The company, known for manufac-
CEO. turing quality toys, is also expanding
“Chhota Bheem, the famous car- its offering in a big way. It is resort-
toon animation character, has always ing to both organic and in organic
struck a chord with Indian children ways to increase its portfolio. Over
and Funskool, by making the Chhota the years, the company has acquired
Bheem and friends action licenses from major foreign brands
figures in India has once to not only distribute their products
again proved that India but also manufacture them in India.
is moving towards being This is testimony to Funskool’s abil-
Aatmanirbhar in man- ity to make world class products. All in
ufacturing of quality all, the company is all geared up to
toys. Funskool has been leverage the opportunities emerging
leading the way in pro- in the market. u
actively and consciously A r b i n d G upta
choosing to promote arbind.gupta@businessindiagroup.com
u 34 u
n ov e m b e r 27- d e c e m b e r 10 , 2 0 2 3