Simba Toys plans joint ventures with Indian manufacturers

Mumbai: Germany-based Simba Dickie Group, through its subsidiary Simba Toys, plans to forge joint ventures with Indian manufacturers for making board games and plush toys.

Instead of setting up a green field manufacturing facility as proposed earlier, the toymaker has decided to pick up stake in local companies. With the intention of bringing down prices for price-sensitive markets including India, the European toymaker expects India to become the sourcing hub for ‘emerging’ countries such as Brazil, Russia, Poland and West Asia.

“We are in talks with Indian companies for manufacturing plush toys and board games. The investments would be made by the parent company in Germany for buying a stake in Indian companies. We would like to treat India as a sourcing base, since labour costs in China have risen,” said Shree Narayan Sabharwal, Business Head for Simba Toys.

Local manufacturing would also lead to lower prices for price-sensitive markets. “Today, all our toys are being imported and the fluctuating dollar is not exactly helping us. But we have managed to subsidise prices for some of our brands in India by almost 30 per cent, by saving on marketing costs. The organised toy market in India is still small and fragmented, but it is growing between 18 and 20 per cent,” said Sabharwal.

“We have to cater to emerging markets such as India, Russia and West Asia where there is potential, but these are price-sensitive nations unlike the European countries. India would now be serving as the sourcing hub for certain categories such as plush and plastic toys and board games, but not electronic toys,” he added.

Having got on board a master franchise in India, Exelixi Management Company, Simba Toys entered retail through its own stores last year in cities such as Mumbai, Bangalore and Delhi. It is also launching stores in tier 2 cities such as Indore and Udaipur.

With six stores in malls, Simba Toys now plans to position itself as a ‘neighbourhood’ toy store in upmarket residential areas in the metros in smaller formats measuring between 800 and 1,500 sq ft.

It is also planning an ad campaign with Viacom 18-owned Nickelodeon channel for its brands such as Steffi doll and Squap games. “There would be series of commercials on the Nickelodeon channel and we would be associating with some of their shows and on-ground events for our brands,” Sabharwal said.

Apart from its own stores, Simba also distributes its brands across toy retailers such as Hamleys and Landmark. Almost 90 per cent of Simba’s turnover comes from distribution revenues, while the rest is through its stores.