CHENNAI, INDIA (May 18, 2:45 p.m. ET) — Global retail chains are looking towards India for sourcing of toys due to rising labor costs in China and Vietnam. India's leading toy brand hopes to cash in through a long-term sourcing deal with a French retailer.
Funskool India Ltd. is negotiating with couple of major retail chains that have been sourcing toys from China.
“We are holding discussions with Carrefour [SA] for quite sometime and another major global brand, not disclosing the name as the talks are at critical stages,” said Funskool CEO John Baby told Plastics News.
The Chennai-based company has two manufacturing units, in Goa and Ranipet. Its first major domestic brand, Giggles, will hit the shelves by the end of this month. The company currently represents Lego, Tomy Takara of Japan and Ravensburger of Germany and has license arrangements with Walt Disney, Warner Bros and Nickelodeon. It recently tied up with Siku of Germany to distribute their range of die-cast, scale model vehicles and with the Hong Kong-based New Bright, the world leaders in radio-controlled vehicles.
Funskool is a joint venture among Indian tire major MRF and global leisure children leisure products Hasbro Inc. Funskool already has a supply deal with the UK's ABG Corp.
Baby said he hopes to finalize more agreements in the next few months.
“Over the years the cost of production is rising in China and as a result retail chains are looking for other sourcing channels. China has advantage of cheaper raw material but India has advantage of cheaper labor cost,” he said.
The company posted sales of about US$20 million in 2011-12.
