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Published on: Dec. 8, 2023, 1:11 p.m.
Funskool: Toying with success
  • Funskool is the first Indian toy manufacturer to get certified by the Bureau of Indian Standards for the safety of electric toys

By Arbind Gupta. Assistant Editor, Business India

Funskool (India) Ltd, India’s leading toy manufacturing company, is expanding its capacity in a big way. Promoted by the $2.5 billion MRF group, the Chennai-headquartered 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 manufacturing facilities across Goa and Ranipet 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, Funskool has been instrumental in raising the standards of toy manufacturing and distribution in India. The company is vying to more than double its revenue in the next 2-3 years from today’s Rs240-odd crore. The company supplies about 60 per cent of its toy production to over 30 overseas countries, 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 follows the government’s decision to curb the surge in toy imports during the past couple of years, by increasing duty to 70 per cent, as also making BIS (Bureau of Indian Standards certification mandatory for imports of toys. These decisions, coupled with the government’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 manufacturing facility at Goa, which also has the licence – IS 9873-Part 1 – which covers non-electric toys.  Also, its Ranipet facility became the first toy manufacturing 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 producing toys in India are required to be certified by the BIS and product testing 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 planning 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, Funskool 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 domestic 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. 

  • Jeswant: expanding portfolio

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 million 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 surging imports,” says R. Jeswant, CEO, Funskool (India) Ltd. “With BIS certification 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 facilities. 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 development team, the company, having over 400 SKUs under its own brands and licences, is expanding its portfolio in a big way. To meet the increasing demands, the company is also planning 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 manufacturing of wooden toys, in pursuit to its vision to bring back the popularity of traditional wooden toys.

It has recently added to its Funskool’s home-grown brands – Giggles, Fundough and Play & Learn – products like Ever Links (features 13 links in six 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 children 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 experience 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 development of children,” adds Jeswant, who has been associated with the company for nearly 24 years.

  • Funskool toys are a favourite with kids

    Funskool toys are a favourite with kids

Being at the helm of affairs, he is facilitating the smooth functioning of business operations to help translate strategic vision into action. His attention to detail, value-driven experience across diverse strategic and leadership roles and team approach has always put him at the fore front of challenging situations and has witnessed a winner emerge. Prior to joining Funskool in 2000, Jeswant had worked with TI Cycles of India (as senior product manager) and with Blue Star (as general manager, sales).

Inorganic push

Apart from expanding the product offering of its own brands, the company is also adding to its portfolio in an inorganic manner where it is acquiring the licences of foreign brands as also some Indian brands to manufacture and distribute products in the Indian market. The company at present, manufactures and distributes 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 distribute 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 Family Game’, `Sequence’ can be played by two to 12 players. The game aims at building strategy, planning, sportsman spirit and team play along with providing quality entertainment.

“Funskool always wants to bring the best of toys and games to its customers, and the association with Goliath is another step towards it. We have always been a frontrunner in developing a catalogue of varied toys and games through extensive focus on innovation and development. We believe that this partnership will have a significant role in providing a unique synergy of strengths to build the brands further,” affirms Jeswant.

“We are glad to have begun our co-operation with Funskool in the Indian market,” says Jorge Aguila-Collantes, general manager ROW-Goliath. “We really believe this step will allow `Sequence’ to grow and become one of the top board game brands in the Indian market, like it is in many markets in the world”. Some of the toys and games brands of Goliath include Rummikub, Triominos, Rolit, Wordsearch, Pop the Pig, Doggie Doo and Gooey Looey.

In July this year, Funskool acquired the licence to make and distribute the popular action figure Chhota Bheem and other seven characters from the famed animation series. The company has obtained the licence to launch the series of action figures from Green Gold Licensing & Merchandising India, which is a pioneer in creating original Indian animation content and, has over the years, established itself as a prominent player in licensing and merchandising, movie production and distribution, digital business, retail stores and events.

“We are excited to add Chhota Bheem to our well-established manufacturing and distribution capabilities.  Our existing scale and distribution network establishes an ideal platform to achieve the full potential of Chhota Bheem in India and will address the significant unmet needs of the portfolio of products,” says the Funskool CEO.

  • Inorganic push: The company is acquiring the licences of foreign brands also

    Inorganic push: The company is acquiring the licences of foreign brands also

“Chhota Bheem, the famous cartoon animation character, has always struck a chord with Indian children and Funskool, by making the Chhota Bheem and friends action figures in India has once again proved that India is moving towards being Aatmanirbhar in manufacturing of quality toys. Funskool has been leading the way in pro-actively and consciously choosing to promote the `Make-In-India’ initiative and the acquisition of Chhota Bheem & friends has been a step in the right direction,” he adds.

“When it comes to making high quality and toxin-free toys for children, there is no substitute for Funskool in India,” acknowledges Samir Jain, executive director & COO, Green Gold Animation, commenting on the acquisition. “We are pleased with licensing Funskool India with manufacturing and distributing Chhota Bheem and other seven action figures. With its expansive distribution network prowess, we are confident that Chhota Bheem action figures will reach to every child in the country.”

Funskool enjoys a pan India distribution network. Backed by 10 warehouses and four regional offices – Mumbai, Delhi, Kolkata and Chennai – the toy maker’s products are present across 4,500 retailers.  Apart from physical channels, the company sells about 20 per cent of its production on online platforms like Amazon and Flipkart.  

The last few years have been quite eventful for the domestic toy industry. The government has recognised the significance of the industry which has the potential to emerge as a global manufacturing hub. In the last couple of years, the imports of low quality toys have come down significantly following imposition of higher duties as also mandatory implementation of BIS certification. All these have provided quite a conducive scenario for toy makers like Funskool, which have expanded capacities in a big way.

The company, known for manufacturing quality toys, is also expanding its offering in a big way. It is resorting to both organic and in organic ways to increase its portfolio. Over the years, the company has acquired licenses from major foreign brands to not only distribute their products but also manufacture them in India. This is testimony to Funskool’s ability to make world class products. All in all, the company is all geared up to leverage the opportunities emerging in the market.

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