Global retail chains are looking toward 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 French retailer Carrefour SA.
Funskool India Ltd. is negotiating with a couple of major retail chains that have been sourcing toys from China.
“We [have been] holding discussions with [global chain] Carrefour for quite sometime and another major global brand. [We are] not disclosing the name as the talks are at critical stages,” Funskool CEO John Baby said earlier this year.
The Chennai-based company has two manufacturing units, in Goa and Ranipet. Its first major domestic brand, Giggles, hit the shelves in April. The company said it currently represents Lego A/S, Takara Tomy of Japan and Ravensburger GmbH of Germany, and has license arrangements with Walt Disney, Warner Bros. and Nickelodeon. It recently reached an agreement with Sieper Lüdenscheid GmbH & Co. KG in Lüdenscheid, Germany, maker of Siku toys, to distribute its range of die-cast, scale-model vehicles, and with Hong Kong-based New Bright, a leader in radio-controlled vehicles.
Funskool is a joint venture among Indian tire major MRF and Hasbro Inc. Funskool already has a supply deal with the U.K.'s ABG Corp.
“Over the years the cost of production is rising in China and as a result retail chains are looking for other sourcing channels,” Baby said.
The company posted sales of about $20 million in 2011-12.