a toy for all : The growing business of toys in India- Demographic surge

I was discussing with one of the Digital gurus (he is 33 years) and he proudly stated that his first month's salary was spent to buy an X Box! The 30+ generation is becoming more and more involed in things that they have missed in their childhood. They are also obsessed to provide all those things (and more) to their kids! the domestic market of toys are flourishing around. here's an article published in The Hindu Business Line :

 

Dinesh Sathiaraj is 15, but whenever he visits the mall near his home in Mumbai, he has to visit the Hamleys there and look for something new to buy. He is interested in radio- and remote-controlled toys and owns about three or four of them, all which cost his parents between Rs 3,000 and Rs 5,000 each. He is interested in radio-control Lego sets as well. 

When R. Jeswant, Vice-President, Funskool India, began working at the company about 13 years ago, toys that cost Rs 3,000 were difficult to sell. However, a Lego set of the Taj Mahal which cost Rs 33,000 not only attracted much attention when it was being set up and built but also managed to sell a few pieces last year. “They’re lapping it up,” he says, as he talks of higher prices and changing tastes.

Airfix, a brand of scale models of military aircraft, ships, tanks and cars that have to be assembled and painted, is one toy that represents this evolution. Earlier, there was no market at all for these kind of pursuits, he explains. At that time, toy makers and sellers were also worried about losing out to cheap alternatives from China, but that threat seems to have abated in recent years as they are unable to meet quality stipulations in India. 

Not only has Funskool brought in an array of such sophisticated toys, it has even been selling 3,000- and 5,000-piece jigsaw puzzles which can be finished only with the help of older enthusiasts. Its party games such as Taboo and Scattergories are meant for adults. Funskool, a joint venture between tyre major MRF and Hasbro, has tie-ups with several entities around the world which have licensed their toys and board games to it.

Scratching the surface

“In India, we’re still scratching the surface of the toy market,” says Jeswant. Worldwide, the toy market is estimated at $85 billion (Rs 450,000 crore) but in India it’s just Rs 2,200 crore. (There are no authorised industry estimates.) Worldwide, the industry is growing at a compounded annual growth rate of 1 per cent over the last five years, but at 12-15 per cent in India and will maintain that rate for the next 10 years, he says. Funskool has been growing at 23 per cent for the last five years. 

India and China are important for toy market companies for these reasons, there’s plenty to look forward to, he says. This is why the future of the traditional toys industry looks pretty good. And there are plenty of reasons why toy sellers can be optimistic. 

For one, there’s lots more money. People are flaunting their riches, a car, a smartphone … “that’s the first stage. Toys come in the next stage when there’s more awareness,” says Jeswant. 

It helps that today’s young parents are the first generation of Indian parents who have played with some sort of branded toys, he says. Funskool came into being in 1987, Mattel’s India operations a little earlier, so toys and games such as Barbie, GI Joe and Monopoly are not unfamiliar to them and will be perpetuated in the next generation too, says Jeswant. “Seventy per cent of India is under the age of 35, which is extremely good, a lot of young parents and kids around,” he adds. 

Krunal Mehta, Vice-President (Branding and Corporate Communication), Angel Broking, says parents’ demanding educational toys is another reason the toys and games market is witnessing robust growth. The emergence of modern trade has exposed people quite a bit to branded toys, he says, though he points out there are equal or more numbers when it comes to unbranded toys.

The expansion of organised retail is another reason for happiness. With exclusive toy stores such as Hamleys coming up, there is a much higher standard of merchandising. Impulse buys go up in such a situation, says Jeswant. 

But are people buying in a rather gloomy economic atmosphere? Toy sales don’t really go down, says Jeswant, explaining that people defer the big-ticket purchases such as homes so that they won’t have to pay monthly instalments. The average price of a toy is Rs 500-1,000. Toy sales in department stores are affected as fewer people shop there during a downturn, but that’s not the case with toys-only stores, he says.

Traditional rules

Neither is he worried about the Internet taking over children’s play times. “There’s a long time before we have to be worried about that,” he says, adding that there is a lot of scope for traditional toys, which include board games, puzzles and Play Doh. He is not seeing any drop in sales of infant and pre-school toys, and board games, played by older children, continue to be the highest-selling category at Funskool, raking in over 30 per cent of the sales. It speaks of good parental influence and family bonding, he says.

What are the new-generation toys for new-generation kids? Jeswant says animation movies drive toy sales. Beyblades merchandise has been a favourite for the last two-and-a-half years, and more will be launched when a new series launches in October this year. The last few weeks, it’s been Iron Man III merchandise that Funskool has been selling. 

Lego is another big trend – it is the fastest growing toy company in the world, and a big contrast to the stagnant global toy market. Funskool’s sales from Lego grew 70 per cent in 2012 and it expects similar growth this year. Funskool’s turnover has crossed Rs 100 crore and it spends about 5 per cent of its turnover on advertising and marketing. 

Over the years, Funskool has tied up with Tomy Takara of Japan, which has helped it bring in the Beyblades, Chuggington die-cast vehicles, Tomica and Lamaze brands, Ravensburger of Germany for jigsaw puzzles, radio-controlled vehicles from New Bright and Siku of Germany. Boys’ collectibles from Funskool are a big draw, claims Jeswant. Puzzles are big, not in rupee terms, but in numbers. 

And what do they have for girls? Handycrafts, all set to launch this year. It’s not going to be tie-ups all the way. Since last year, there is “a new thrust” at Funskool to develop its own brands. Last year, it launched Giggles for infants, which has doubled sales in a year. All its pre-school toys will be branded Giggles henceforth. This year, it’s Handycrafts, arts and crafts products that will include finger painting, leaf art and origami. 

A few years ago, Funskool tied up with IIT Bombay’s Industrial Design Centre to develop some board games. Chakra View, Mahawar, Gotcha, Triplets and a few others were born out of an elective called Board Game Design offered at IIT. 

Dinesh’s mother Nalina says that it is only of late that her sons’ interest in board games seems to have waned. “We used to buy every new board game that came on the market,” she says, “so that we could play as a family.” Definitely the Internet has cut into their toy time, though Dinesh says he wants an expensive Lego set as a wedding gift when he gets married! 

 

the Business India magazine's report on the Titan Industries Millennial Paradox - Youth insights in India

What India should do with it’s demographic dividends? Youth in India and future courses

What happens when a country has half of the population as ‘youth’ and other half still aspires to remain ‘young’ (by wearing denim and shorts, eating pizza, visiting Comic Con, playing with X box and getting addicted to Facebook)? The demographic dividend sounds ‘cute’ and promising indeed, but the real picture might be scary, unless attended immediately.

In 2011 Havard review stated “Although the Indian economy has grown robustly in recent years, many Indians continue to be engaged in farming and the unorganized, low-wage services sector with poor working conditions. Higher education enrollment has grown more than seven percent per year recently, but the problem of graduate unemployment has worsened. The relatively small number of decent jobs created by the expanding information technology (IT) services and business-processing sectors masks the grim realities of high educated youth unemployment. Though IT spinoffs and growth have created jobs in sectors like real estate, infrastructure, financial services, retail, and textiles, such sectors now require a different sort of skilled manpower: not necessarily college graduates, but mostly people with basic or intermediate skills. The country’s education and training system is ill-equipped to cater to this demand.” 

The truth has worsened after that. The educated youth are forced to take up works that neither requires brain nor involves any creative ideation. The Economist recently wrote “set alongside other fast-emerging Asian countries, India has too few of the right sort of firms or workers and too many of the wrong rules. There are certainly some impressive Indian manufacturers, especially in car making. But the likes of Bharat Forge and Mahindra & Mahindra prefer to employ sophisticated machinery rather than abundant labour. At the other end of the spectrum are innumerable tin pot workshops, employing handfuls of people and outdated methods. What India lacks is a Mittelstand of midsized, labour-hungry firms. Even during the boom years, it created many more jobs in construction than in manufacturing. It is hard for India’s young to raise their sights when they are carrying bricks on their heads.” Imagine a generation that’s so used to with multi tasking, fast thinking, lifestyle options and pampered by media lands up in a job that certainly doesn’t need brain but mechanical works (which easily can be executed by a machine).

Moreover, the socio economic power is misbalanced and not even equally distributed in parts of the country (even among cities). Interestingly, In 1757, just before the beginning of the British military occupation, India’s shareof world manufacturing was 24.5 percent while the share of Europe and the United States combined was 21.4 percent. India was the world’s largest exporter of manufactured goods, and it had developed advanced crucible steel (wootz), shipping, and textile industries that were developed after decades of experimentation. Half of India’s agriculture output was surplus. Although this prosperous India was not egalitarian with its feudal polity, caste system, and apartheid against the Dalits, there is no evidence of large-scale extreme poverty. The whole scenario changed after occupation. and recently, the power is clustered among lucky few.

Along with other industries, the service industry is also slugging off . The India Today magazine wrote “… call centre culture, that mushroomed in Indian cities like Bangalore, Mumbai, Gurgaon and Pune in the early 2000s, is dying a slow death. After a boom in the 2004-06 period, which saw business margins, a measure of a company's profitability, as high as 40 per cent of total revenue, the sector has slowed down to modest margins of 15 per cent of revenue. Many Indian bpo companies have scaled down their 'voice' business by as much as 60 per cent. Others have shifted their English language call centres, servicing US clients, to countries such as the Philippines, Malaysia and China. Almost all of them have turned focus to more value-added 'non-voice' work that includes high-end analytics, it services bundled with BPO, and cloud computing offerings. The industry likes to call this a transformation for the better, but it is painful for the thousands of young people without job prospects… In the last five years, India has lost one million jobs in the customer contact business to countries like the Philippines," says T.V. Mohandas Pai, former director of human resources at Infosys Technologies, which started a BPO arm in 2002 in Bangalore. For a sector that employs 1.98 million directly and 7.5 million by indirect means like those providing transport and security services, the loss is significant. This has had an impact on the combined IT-BPO space too, whose growth slowed to just 6 per cent in 2009-10. Although it recovered to 10.9 per cent growth last year, it is still a far cry from the 30 per cent-plus growth in the pre-Lehman Brothers collapse days… "India as a delivery location is still challenged by English being spoken with strong accents, which can sometimes be hard to understand," says Cathy Tornbohm, vice-president, BPO research, at Gartner, based in the UK. Countries like the Philippines, on the other hand, have had a history of cultural exchanges with the US and are becoming a better choice for call centre operations, despite high staff cost. While an entry level BPO worker in an international call centre in India would earn Rs.17,000 to Rs.18,000 a month, a Filipino worker would get 15 per cent higher. At team leader levels, comparative salaries would be 20-25 per cent more in that country, and at senior management levels, as much as 50 per cent higher. "Each country has its own location-specific differentiators," says Keshav R. Murugesh, Group CEO, wns, a bpo firm based in Mumbai. In the last two years, India has lost 75,000 jobs in the BPO space to the Philippines alone…. Pradeep Udhas, head of IT-ITes at KPMG in India, says that rising wage inflation, declining quality of the talent pool and rising infrastructure cost have dimmed the lure of India as a bpo destination. "If the trend continues, it can have a massive impact on those employed in the sector, as well as people who see the BPO industry as a future employer," he adds. Recent reports say Vodafone is shifting 750 call centre jobs from Mumbai to Kingston in Australia, the largest BPO market in the Asia-Pacific….”

The experts across the world suggested Indian govt. to focus on manufacturing based industry rather than service industries.  But, in my opinion, the problem lies at a different sphere. It’s the Mindset of people that has to be mutated. We, being Indian were strategically educated to become excellent servers (by the colonial education system), which unfortunately being carried on by the post-independence government and the encouragement for entrepreneurship was minimal. The strength of India lies in its diversity. And the youth should be educated to think ‘out of the box’ to ideate, conceptualize and start their own. The micro and medium scale enterprises should be encouraged.  India can be an excellent ground for all R&D of the world. A low cost talent pool to think diversely, finding solutions of existing problems etc. Remember, we are the country famous for its “Jugad” and DIY inertia (even among the grass roots). Unfortunately, the premier institutions are spending peanuts in research and creativity.

Internationally, with all the chest-thumping in India about being premier, IITs  (Indian Institute of Technology) don't figure in the list of top 200 universities in the world. As per QS World University Ranking 2012/13, which evaluates 700 universities in the world, the best rank was of IIT Delhi at 212! Bombay (227), Kanpur (278), Madras (312) and Kharagpur (349) followed. The National University of Singapore was ranked 25th, Hong Kong University of Science (which started much later than IIT) was ranked 33rd and Nanyang 47th. (data source Business Today May 12th 2013). 

The IITs were supposed to lead the nation in R&D by focusing on ways to build a prosperous India by raising the incomes of the poor. And they were supposed to educate PhD students who would lead R&D in India’s industries and serve on the faculties of India’s other technical institutions. The IITs would thus have created a multiplier effect and a culture of innovation throughout the country. Despite the kudos showered on the IITs’ undergraduate education and the ensuing euphoria, none of the IITs rank in the top 100 institutions in the world in research based on any measure, and IIT professors and graduates hold few significant patents in India. MIT’s annual research output dwarfs that of all the IITs combined. Most of India’s public- and private-sector organizations continue to rely on off-the-shelf technologies.Nor are the IITs graduating enough PhD students to meet the faculty needs of their sister IITs and other engineering colleges and technical institutions, let alone create a national culture of innovation. About 25 percent of the faculty positions in the IITs and 50 percent of the faculty positions in other engineering colleges remain vacant. Several IIT professors reported that they were unable to attract students with high academic credentials for postgraduate work and that those who get their undergraduate degrees from the IITs almost never pursue postgraduate engineering degrees in India.

Had the IITs followed their original mission and had their work raised the productivity of the adults in the 77 percent of the population that are unorganized laborers to even half of the level of the leading industrialized countries with improvements in products, processes, and infrastructure, supported by education and training, India’s gross national product would have increased over ten times. This goal was central to the IITs’ mission of creating a prosperous nation.

Something has to be done fast and effectively before the educated youth gets frustrated and takes different path to protest, propagate terrorism, brain drain.

 

 

 

 

 

 

Titan Industries 'Paradox Panel' Think Tank - Youth in India

I was in the panel at Titan Industries 'Paradox Panel' Think Tank discussion yesterday.


Here's a report published in the faqs:

Titan Industries today unveiled the ‘Paradox Panel’, a discussion forum designed to research, debate and develop insights into India’s 21-35 year-old communities – the so-called ‘millennial’ generation. The inaugural white paper published by the panel, The Millennial Paradox and the Age of Collective Individualism, highlights this demographic group’s obsession with self-expression, individual choice and personal opinion, while at the same time exhibiting an unprecedented desire to share and belong to some form of community, both in the professional and personal context. The analysis has been compiled by an array of experts representing the fields of research, marketing, advertising and academia and is designed to stimulate discussion, debate and further insight.

To mark Titan Industries’ 25th anniversary, the Paradox Panel will be exploring the implications of the Millennial Paradox on India’s youth in terms of their consumer behaviour, family and relationships, professional lives and careers, and leisure. Throughout the year, these insights will be published in subsequent Titan Industries’ Millennial Paradox Quarterlies.

S Ravi Kant, CEO, Eyewear Business & Executive Vice President Corporate Communications at Titan Industries, described the inaugural Millennium Paradox Quarterly as a compelling insight into the motivations, perspectives and behaviour of India’s 21-34 year-olds. “Our esteemed panellists have neatly captured how individualism has become the new convention, and from where and whom this generation of India’s population are finding endorsement, validation and meaning,” he said.

“Titan Industries’ 25th anniversary represents an important milestone for us and the perfect opportunity to analyse how India’s own 25 year-olds see the world. We are actively looking forward to debating and discussing all aspects of our inaugural white paper, from the workings of ‘collective individualism’ to the ‘millennial paradox’ concept itself. Let the debate commence!” concluded Mr Kant.

Titan Industries’ Paradox Panel

- Aditya Swamy – Executive Vice President, MTV India

With an MBA in Marketing from S.P. Jain Institute of Management & Research, Aditya started his career with Coca-Cola and moved on to the entertainment industry in 2006. He has helped MTV to convert into a multiplatform entertainment destination. Today, MTV reaches out to over 130 million people on TV, has the largest social media connect with over 8 million fans on Facebook & Twitter; and has over 2 million views a month for its mobile TV service.

- Dr. Bino Paul – Professor and Chairperson, Tata Institute of Social Sciences

Dr Bino Paul GD is Professor at the Centre for Human Resources Management and Labour Relations at the Tata Institute of Social Sciences. He has a doctoral degree in Economics from IIT Bombay and affiliated with the Centre for Human Resources Management and Labour Relations, Innovation and Research Facilities: Labour Market Research Facility and the School of Management and Labour Studies. 

- Kaustav Sengupta – Associate Professor at National Institute of Fashion Technology

Kaustav is a well-known youth trend analyst, alternative media expert and a fashion theorist. He heads a research & direction team of young Indians which is organically growing and now has a network of more than 1,500 young trend-spotters across India. This initiative called INgene, is the first ever youth trend research initiative in India recognized by many international experts as the best source for youth trend insights in India. He is also representing PYMCA (www.pymca.com, the largest online archive of youth culture) in south east Asia; along with other honorary associations (Local advisor of TED, NeN NIT Trichy, IIT M etc.)

- Sam Ahmed – Vice Chairman and Creative Director, Rediffusion India

Sam Ahmed is one of the biggest creative names in the world of advertising and is currently Vice Chairman and Chief Creative Officer of Rediffusion. He is one of the world’s most awarded creative people. Sam has spent 14 years at Y & R, Dubai where he was credited with making Y&R the No. 1 agency in Dubai in creative rankings. Over the years, Sam has won more than 200 international awards including the Cannes Lions, One Show, Clio, New York Festival, Epica among others.

confession pages- an unique way of expression among the youth

In a country, where any unintentional comment in Social network can land you in Jail what else is the best possible way to express oneself, other than an anonymous confession? I can see a transparent generation growing amid the nameless confession who dares to express what they feel. The wonderful youth of India finds their ways to express even if govt. and grey hairs tend to gag them through laws. From closed group discussion in facebook, google doc share to coded texts and sign languages the youth invents various ways to sideline mainstream media / govt. gagging.

 
Here’s a report from The Hindu on the recent surge of Confession pages in Facebook:

“Confession pages are distracting. I log onto Facebook every two minutes only to read these hilarious confessions,” read Aadhya Sharma’s status on Facebook. Aadhya’s examinations are in a week’s time. But every-minute updates on her college confession page have made it difficult for her to focus on her studies. Like Aadhya, there are many others for whom college confession pages have become a great source of mindless entertainment.

 

ANONYMITY

Confession pages is the most recent trend among college students on Facebook. Started as a portal to confess anything anonymously, a lot of these pages now have begun posting derogatory comments about peers, professors and institutions. The confessions range from college students posting about their professors to students poking fun at their classmates by commenting on their attire and body language. Students have also used confession pages to confess their ‘love’ for fellow classmates. Interestingly, confession pages of many premier engineering institutions, including the IITs have become just another dating portal.

 

One of the posts on a Mumbai-based college confessions portal read, “I like this girl but then I was going through her photographs and her mom is hotter! lol Can't help it, will have to propose her only.” Another comment read: “Why do these chicks put on so much make-up and wear heels to college? I come to college with slippers and loose t-shirt's. And, I just look at them, and think wth? /:”

The idea behind confession pages was unclear. “Although confession pages may have started off as an attempt at fraternising, they have now become indicators of the skewed priorities of young students. They showcase the poor language skills, an unhealthy focus on appearance and a tendency to take shelter in cliques,” said Malathi Jogi, student of Economics in Jai Hind College.

Less than a week after Facebook experienced a surge of college confession pages, several troll pages came up with numerous memes countering content which went viral. Many students were both irritated and distracted. Something had obviously gone wrong.

Many college students do not endorse the idea of confession pages. Initially, it may have started off for having a good time, but eventually students began posting nasty comments. Unnati Maharudra, a journalism student, believes that it may not be right to curb the freedom of expression. However, a certain level of decency in language must be ensured. “Students are using these pages as just another portal to target others they may not like. Thus, comments on looks, clothes, personality have become common,” she said.

Yet, there are a significant number of other students who really do not care about what goes up on such pages. “It doesn’t make a difference to our lives when others are busy talking out loud about classmates. It is just another amusement,” said Arunima Joshua.

 

LEGAL MEASURES

While the anonymity available here no doubt encourages and enables people to express with candour, the flip side cannot be ignored. “We have seen too often that anonymity becomes a front and a reason for using invective. Sexist comments, misogynist statements, harassment, bullying, intrusions into privacy — these aren’t unlikely fallouts. Such actions have the potential to end up on the wrong side of the law, especially the IT Act. Section 66 A, though antediluvian in many aspects, becomes an efficient tool for checking such abuse. Section 66E, dealing with violations of privacy and electronic transmission of obscene materials and pictures, can also be enforced,” said Saurav Datta, professor of Media Law in KC College.

With students poking fun at each other, it is extremely important to maintain the critical dividing line between expression and expletive.

Experiential Generation : Youth in India (a sneak peek from my forthcoming book)

Ever worried why youth are shuffling between brands so frequently and the obvious cry that this generation is “not loyal”? Tiered of their low attention span?...  the critiques jumping in conclusion that youth are not ‘serious’ cause they ends up any potential revolution with ‘nothing’ and suddenly shifts their attention to ‘something else’ (ie. The sudden hibernation of anti -corruption movement, anti -rape protests etc.)…  confused, why they shifts their jobs so often?

Here’s one reason that might answer few concerns. This generation of Millennial (born after 1980) are basically an Experiential generation who seeks ‘experiences’ from anything and everything. Maslow’s higherarchy of need no more remains valid! The need shifts to having the ‘feel’ of it, rather than ‘be loyal to it / doing it in long term’. The experience of ‘being right there’ and ‘having it at the right moment’ matters most. The phases of experience are depicted below.  

 

The overflow of opportunities to gain experience/ information/ intimation/ clues etc. (which can be as simple as ‘sharing a cup of coffee with a date’, ‘shaking hand with xxx’, ‘gathering likes in facebook’, wearing a brand till the peers utter ‘ah that’s so zombie’ or just a new app to download) makes it easy to select the best and then ‘experience it’  ( to have a voyeuristic overview while others are using / doing it, doing it oneself...experience it, actually and then have a post experiencial hangover to talk/criticize/ relish)  to shuffle again for the newest one… this cycle of experiences not only implies to product usability but also in their lifestyle, relationship, AIOs and peer clusters.