Karan Narang, Director, KV Toys India, says that India’s opportunity to emerge as a global toy manufacturing hub will depend not on competing with China on price, but on creating innovative products that build consumer connect
As children spend more time on screens, the toy industry must make play engaging enough to win them back, says Karan Narang, Director, KV Toys India. He states that the company’s goal is to make toys cool again and he believes India’s opportunity to emerge as a global toy manufacturing hub will depend not on competing with China on price, but on creating innovative products that build consumer connect and inspire global trust.
At the company level, Narang expects KV Toys India to maintain around 40 per cent year-on-year growth, with quick commerce emerging as a significant growth lever. He estimates the channel will contribute 10 to 15 per cent of sales this year and about a quarter of the business over the next three years.
On the manufacturing front, he notes that the company’s existing production ecosystem has sufficient headroom to support expansion, with facilities currently operating at around 80 per cent capacity, allowing it to scale without an immediate need to add more original equipment manufacturer (OEM) partners. Edited Excerpts:
You have spoken about building House of Play as a long-term consumer brand rather than remaining only a toy distributor. What will distinguish House of Play in an increasingly competitive market?
There are already a lot of brands. Whatever products were coming from China were not creating that connection with the Indian consumers. Our first mission is to make brands in India that connect with the domestic consumers. If you see Quco, it looks Indian and very relatable.
Earlier, when we used to see KV Toys, it was not perceived as a business-to-consumer (B2C) brand, but a trading company. We have brought Quco to make that connection with the consumers at the B2C level. We are creating the products, designs and concept which a child can relate to. The connection at the B2C level is very important.
Children today are spending more time on screens than ever before. How is this changing the way parents buy toys and how will this change the manufacturing approach of the industry players?
This is a big challenge. Our mission is to make toys cool again. Today, a section of society has started realising the concerns associated with high screen time. People have started to switch off their televisions. A working couple is now spending more time with the kids as they have realised that they need to play with their kids. Going ahead, other classes of society will also realise this.
We have to understand that a human touch is very important in a child’s life. When I was young, I had three types of friends: one from school, one from home/society and one from the grandparents’ home. Nowadays, if you move into a new society and ask your kid to go and play with other kids, they are not able to do it. They are not able to make friends.
It is also our responsibility, as a company, to make the toys more attractive and engaging, in a way that children feel like playing with them. We need to make toys cool again.
India is increasingly positioning itself as a global toy manufacturing hub. Where do exports fit into KV Toys’ long-term strategy and which international markets are you targeting?
Our Union Minister Piyush Goyal has urged us to target a tenfold increase in toy exports. This vision is very important. To work on this, three things are very important: ecosystem, manufacturing capacity and design. We have to become the ‘China plus One’.
We have to be different. If we make the same products which are available in China, then we will only remain an option. If we make different, innovative products, then we will become the need. What I want to suggest to all Indian manufacturers is that we need to think out of the box. If we only copy each other’s products, or copy the products that China is already making, then we will never be successful. We will always be stuck in the price war and no industry grows because of the price war. It will always get smaller. If we want to export today, we need to give something new to the market. The Middle East market is really very big. The US market and the Asian markets are really, really big. We can of course cater there.
What should be the country’s approach when it comes to competing with China?
We have the infrastructure. We do not have a problem with manpower, ecosystem, innovation or technology in toys. We are not making a rocket. It is a basic toy. We have enough technology to make toys here. Indian manufacturers need to change their mindset. They need to innovate. They need to create something new. Only then we will grow. Otherwise, we will not be able to grow.
The quote that we live by is that the future of the Indian toy industry will be defined by quality, innovation and global trust, not just cost competitiveness. Today, if I say that I am cheaper than China, it will not work. We need to give global buyers the trust that we will deliver what we commit.
Since your original equipment manufacturing partners are in the western regions. As you expand and enter newer markets, are you looking to add more partners?
We can do that. However, we can increase the capacity and production in the same facilities currently. That is not an issue. Our head office and warehouse are in Bombay. It is near the port and it is accessible. We are in the middle of India. We are currently serving the north and the south of India at the same time. We are actually located in the best place possible. Currently, we are consuming almost 80 per cent of our facilities.
Nearly half of your sales come from general trade (GT) and half from modern trade (MT). Are you looking to increase your presence on newer channels such as quick commerce?
That’s the main point. Currently, 50 per cent of our sales come from GT and 50 per cent come from MT. For us, quick commerce is totally a blank page. A huge opportunity is coming for us in quick commerce especially because it is growing very quickly and the economy and lifestyle of people are changing. We need everything now, not tomorrow, not day after tomorrow. This is an impulse product. In the near future, we will be doing big business from quick commerce.
This year, we will be doing almost 10 to 15 per cent of total sales from quick commerce and maybe in three years, the channel will contribute 25 per cent to the sales.
Doing business on quick commerce is slightly easier than doing business offline. In the last few years, we wanted to create a solid distribution network and we are there now. We have one of the best distribution networks offline and now we want to replicate it on quick commerce. We can do really, really very fast.
You spoke about making toys cool again. When you see the market currently, what kind of products or trend do you think will define the next decade of India’s toy industry?
Everything which will be a little impulse, more creative and more relatable to the kid. It is not like Ludo is not getting bought now. It has been there since ages. Now, the point is what is new. We are adding a lot of categories also, such as soft toys, educational games, board games, electronic toys, metal cars, dolls, wooden toys. We have n number of categories. In KV, you name it, we have it. We also have 30 designers in-house.
What is the long-term revenue or growth milestone that the company is chasing?
We expect to grow by 40 per cent year-on-year going ahead. We are on the right track.
