Indian ecommerce unicorn Flipkart owned fashion subsidiaries Myntra and Jabong are now taking the plunge into the $400 Mn (INR 2750 Cr) Indian toys market.
Reportedly, Myntra has joined hands with online seller Primarc Pecan Retail as an exclusive partner in its initiative. The category will go live on the Myntra platform from today in line with children’s day celebrations. On the other hand, Jabong has partnered with the UK-based toys retail chain Hamleys. As per the terms of the deal, Jabong will soon launch Hamleys products on its platform.
Primarc Peccan Retail: Eyeing $153 Mn Revenue In 3-5 Years
Kolkata-headquartered Primarc Peccan entered into ecommerce in 2015 to operate under the marketplace model and as a fulfilment partner for brands. At the same time, the company also announced its plans to invest $10 Mn (INR 60 Cr) in the ecommerce segment by 2017.
Primarc had earlier partnered with Amazon India to build its consumables products business such as toys, health, personal care, household, gourmet and grocery.
As stated by Primarc Pecan CEO Kinjal Shah to ET, “Primarc Pecan Retail is poised for a 200% year-on-year growth and works with more than 400 brands. The company processes more than eight lakh units per month making it amongst the top ten ecommerce firm in the country. The company is eyeing $153 Mn (INR 1,000 Cr) revenue in the next 3-5 years”
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He also stated that Primarc now aims to accelerate its growth with the monthly retainer model and will provide end-to-end ecommerce services to brands such as the option to run and operate their own online stores. Primarc will also foray into sales of apparel, home and beauty soon.
Jabong: Targeting 10-15% Revenue Contribution From Hamleys Products
As per reports, Jabong is expecting its toy segment to contribute 10-15% revenue to its overall kids’ portfolio. Since 2015, Jabong is aggressively expanding its Kids Fashion category and has even roped in brands like Disney, Angry Bird, Pokemon, etc along with the Indian mix of Lilliput, Gini and Jony, Nautinati, among other.
“Our foray into the toys segment will help us in fulfilling the overarching needs of the parents and also help us in strengthening our customer outreach,” said Gunjan Soni, head, Jabong said.
Hamleys currently has 42 brick and mortar stores in India and its products range from soft toys, board games, construction sets among others. “We are excited to launch the brand on Jabong. Since both brands speak to a similar audience, Jabong is the right partner for Hamleys and the strengths of the portal will help us reach a wider geographic area and gain a major share of the fast growing online market for toys in India,” said Karandeep Singh, business head, Hamleys India.
Indian Toys Segment: Will Myntra And Jabong Make A Lead?
The Indian toys market is led by almost 20% population in the age group of 1 to12 years. In last few years, the cities like Ahmedabad, Bengaluru, Hyderabad and Pune have emerged as the leading manufacturing destinations for the Indian toys industry.
Further, as per a study conducted by ‘World Of Toys’, an international fair programme, among the local manufacturers in India about 59 % are still focusing on the production of cheap and unbranded toys which appeals to the price-sensitive Indian consumers. However, with the increased online user engagement and smartphone penetration in the country, these manufacturers are expected to join the online bandwagon in the near future.
The toys segment falls into the high-margin side, with an opportunity to seal good revenues. With the Indian government going tougher on the Chinese toys import earlier this year, opportunities have increased further for both the retailers and the manufacturers in the Indian toys industry.
However, the market is still dominated majorly by the physical stores. Thus, not only the local mom and pop shops or kiosks, but Flipkart owned Myntra and Jabong will have to face fierce competition even from brands following omni-channel approach such as Firstcry and Mothercare. Further, even their parent company Flipkart and rival Amazon India are both catering users in this segment. Thus, how well, Flipkart owned Jabong and Myntra will be able to strategise their position in the Indian toys segment remains to be seen.