How this toymaker constructed a distinct segment Rs 5 cr model in 12 years after preliminary failure

Ease of Doing Business for MSMEs: Delhi-based Ajay Aggarwal back in 1984 had set up his toys businesses beginning with trading and later venturing into manufacturing. However, the business gradually struggled to find its feet due to poor market demand and the influx of Chinese toys in the Indian market. Aggarwal recalled by the 1990s, the market was flooded with cheap imports that forced many businesses in toy making to shut shop. Aggarwal’s toy business too couldn’t survive and was eventually dead in 2004. After a gap of five years, Aggarwal tried his luck again when the government banned the import of Chinese toys in early 2009 for a few months citing public health and safety reasons.

“In the 1990s the industry was flooded by imported toys that forced many factories to shut in 2001 and 2002. I struggled a lot before I shut my unit as well in 2004 as there was no business for Indian toys. In 2009 when there was a restriction on Chinese toys, I found an opening to get back up. Others also in domestic manufacturing were able to start up again,” Aggarwal told Financial Express Online. 

Aggarwal set up his board game and puzzle brand Ankit Toys in 2009 with Rs 6 lakh. In 12 years, he scaled the business to Rs 4.5 crore turnover to become one of India’s prominent brands in the board game and puzzle toys category for kids in the age group of 5-10 years. “I had some money saved that I invested in starting Ankit Toys. I also borrowed from my father and friends. Since 2009, we have added over 100 SKUs so far. The market for board games and puzzles is huge despite multiple new games coming into the market along with online games, digital puzzles, smart toys, and more,” he added.

Over the years, Ankit Toys has expanded to indoor games, educational and plastic toys, and now art and craft with a manufacturing unit in Delhi. However, the market remains hyper-competitive as board games and puzzles have been legacy segments in the toy market. With the large Indian and international players such as Funskool, Hasbro, Fisher-Price, and more also operating in board games and puzzle segment, Aggarwal has continued to bet on more visibility of his products.

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“Products in the toy industry are to be refreshed in quick cycles in terms of looks, design, and packaging. So, design and looks matter a lot. There are hundreds of other brands selling let’s say ludo. It depends on the presentation and marketing for your product to be picked at a store. Importantly, lowering the price of a product is not the solution in this market to compete better. There are very less people who are conscious about a particular brand in board games and puzzles. Hence you need to keep your design and visibility of the product on priority even if your product is 5 per cent more expensive than your competitors big or small,” explained Aggarwal.

In 2019, Aggarwal also experimented with exports after scaling the domestic business to a decent bandwidth capable to ship products outside India. “We got our first buyer in Dubai during a buyer-seller meet,” said Aggarwal. Since 2019, exports have been performing better for the company than domestic business. “While the margin is relatively lower in exports but you get quick payment of around Rs 15 lakh for a single container shipped in one go vis-a-vis efforts one would have to make to sell goods of similar value in the domestic market.”

“Crossing Rs 1 crore in exports in very less time has been my biggest achievement so far in the business. We have a Bureau of Indian Standards (BIS) license and have set up a lab at our premises for testing of toys as per BIS standards before they go out in the market. With better quality, exports could be ramped up. Hence, in five years, I want to double the turnover to Rs 10 crore with an export share of over 70 per cent,” said Aggarwal. Revenue of the Indian toys and games market is expected to be worth $52,442 million in 2022 and is likely to grow at a compound annual growth rate of 8.92 per cent during 2022-26 period, as per Statista.