Whether you are a Millennial, Gen-Z or Gen Alpha, a brand that most Indian children would have played with is Funskool.
The toy manufacturing company caters to children from birth to over 14 years under brands such as Giggles for infants and preschoolers, Play & Learn, Handycrafts, Funskool Games and Fun Dough. In addition, Funskool also distributes and manufactures many international brands in India under a licensing agreement.
For this festive season, Funskool has launched 25 products across six major categories and recently launched the popular international board game CATAN in India. For a price-sensitive market like India, Philip Royappan, General Manager - Marketing, Funskool says that the company prices products as per their perception of the value seen in the consumers’ eyes.
Royappan says, “When a customer buys a Funskool product, they are aware that the quality will be given utmost priority. When you have quality, there is always a pricing barrier. However, we aim to give value to the customer and price the product accordingly. Our proposition is to give a wide range of quality toys, in India which we manufacture.”
Looking at how the brand marketing strategy has evolved with each generation, Royappan says that Funskool’s strength is its in-house design department which churns out an average of over 90 products every year. Royappan says, “We draw inspiration from global toy makers, their design and develop our own range of toys which has educational value. This has helped bring in a novelty season after season. The focus is on new product development and keeping our pricing affordable.”
For its brands Giggles and Fun Dough for toddlers, where the parents are the decision-makers, television is used as a communication channel. Over the last two decades, digital has also become part of the mix. He states, “Post Covid-19, there has been a shift from traditional television to towards digital. We focus on social media and use influencers to showcase products and inform the consumer about the benefits and the pieces of product.”
Funskool's strength lies in its distribution with a network of over 100 stockists that reach out to nearly 5,000 stores across India. He explains, “We have exclusive promoters in our team who, when we launch a new product, showcase these products at all stores including the mom-and-pop stores. They explain the benefits and features of a particular product which helps our distributors. The value that we bring to them offline translates into a positive consumer experience as they are acquainted with the product and ultimately explain to the customer.”
Another disruption in the toy category has been the advent of quick commerce. People have shifted to buying popular generic games such as Chess, Chinese Chequers, Ludo etc on quick commerce platforms. However, when it comes to high-end toys such as the popular licensed board game, Sequence, the traction has been on the e-commerce platforms. When it comes to sales, traditionally it has been 60% to 65% from offline and 30% to 35% from e-commerce and modern format stores. Royappan states, “This year in some categories the offline and online sales are 50:50.”
The International Play
A strategy that Funskool has adopted when it comes to international products - which are expensive - is to license the product, manufacture and then distribute it in India. For example, Funskool holds the license for Catan. Catan is a high-end product which is priced internationally around Rs 5,000 to Rs 6,000 and reaches out to a very limited audience as affordability is a factor. Funskool reached out to the makers and license holders of Catan, Catan GmbH, with a proposition to make the game in India at their manufacturing facility under license and a royalty arrangement, ensuring world class quality. He says, “We made this product at a much lower price ensuring affordability. More people can play because the game is priced now at a very affordable Rs 3,499. It's been a runaway success both offline and online.”
In addition to Catan, Funskool has licensing agreements for India with Hasbro Entertainment for the very popular Peppa Pig. This association is for board games and educational puzzles and is also distributed by Funskool in the country. Funskool has the license for Batman and Superman classic action figures. It also holds licenses for board games, like Sequence (licensed from Goliath Game Company), University (licensed from University Games), Scavenger Hunt and Chain Letter. Othello from Mega House and Scotland Yard from Ravensburger are the best sellers and the biggest board games. Funskool also set up its export division in 2019 and does OEM business for leading global companies where the products are manufactured in India for exports. Another focus area is traditional Indian board games such as Kabaddi and Lagori which have been consistent performers.
A key challenge for the toy industry is the reduced attention span among children. To combat this Royappan says, “We need to design games with quick results. We need to expose children to more toys. Playing with toys is beneficial for children in the long run and helps improve their social skills, imagination, and helps them to think out of the box. People who play traditionally with toys have a far more holistic development.”
He continues, “Unfortunately, in India, exposure to toys is still very minimal. Looking beyond the metros and mini metros many households have not really played with, toys. It's growing and getting better.” Another challenge is that the organized market in India is very small but growing. Innovation is key in the toy sector and there is a lack of specialists in toy designing in the country. Looking ahead, Funskool is planning to enter new categories and continue to innovate new products.
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