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Germany-based Simba Toys is looking at the possibility of increasing prices by nearly 8 per cent if the dollar continues to move up against the rupee in the next three months.
Shree Narayan Sabharwal, Business Head, Simba Toys, said, “Since all our toys are completely imported, in the long term we will have no option but to hike prices by the same percentage of dollar appreciation which has been at 7-8 per cent last month. While we continue to hold on to prices with the current stocks, the future shipments will attract higher prices and we will be forced to pass this on to Indian consumers.”
manufacturing
The company continues to import its merchandise from its manufacturing facilities based in Spain, France, Italy, China and Thailand.
Having completed two years in India, the toy company which is here through master franchise Exelexi Management Company, is trying to locally manufacture toys to bring down costs and thereby prices.
discretionary item
While the segment may be growing, it has yet to mature in India.
“Unlike in developed countries where toys are seen as educational and for learning purposes, in India it is not perceived the same way. Besides, it continues to be a discretionary item for the Indian consumer,” said Sabharwal.
With the dollar getting stronger against most of the developing market currencies, India is being targeted by the toy major as a manufacturing base for price sensitive markets such as Russia, Poland, Africa and West Asia.
“As manufacturing in India is going to be cheaper than in Europe, we expect to cater to those countries which are price sensitive to the toy category. We have asked to create products with low margins for certain markets outside Europe especially now that the dollar is increasing,” added Sabharwal.
After completing two years in the Indian market, Simba Toys believes its distribution is now in place. It continues to supply to host of big retailers such as Hamleys, Shoppers Stop and Landmark, apart from having its own 10 standalone stores.
Distribution model
“We have established our distribution model and should have 50 stores by the end of the year and also get profitable during the same time,” he said.
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