R. Jeswant, Chief Executive Officer of Funskool India Ltd, promoted by the MRF Group, oversees successful toy brands like Giggles, Fun Dough, Handycrafts, Play & Learn, etc., in addition to several international toy brand tie-ups. Here, Jeswant takes us through the two decades that he has spent at Funskool and also gives a whiff of what to expect from it in future
Not much fun to begin with...
I joined Funskool in April, 2000 as Head of Sales. The industry was very different then. Funskool was small, but it had the infrastructure in place - warehouses across the country, which allowed us to service any order within 24 to 48 hours. That was an advantage, but the distribution had to be set right. We had four regional offices – North, East, West and South- but not all had regional managers. Only West was stable. There was a lot of churn too; frontline sales people were leaving. Our distribution model involved very few stockists or distributors and most customer accounts were directly handled by the company. It was difficult to recover money. The first change I announced was that we would operate only on cash and carry terms with all, and that we would handle only the biggest customers and the smaller ones would be brought under the distributors. I faced a lot of resistance, but I took a hard line on it. In about a year, things improved and a business model was put in place, which is still in use. Over time, we also arrested the churn and stabilised operations. We have the right type of people and a cultural fit. There is a lot of ownership, which really helps.
An absolute cricket buff
Sports in general, and cricket in particular fascinate me. If India is playing Australia and the match begins at 5 am, I don’t need an alarm, I automatically get up and watch it! Sometimes I wonder when will I get rid of this habit, but I can’t!
Bonding over Monopoly, Scrabble
I have grown up playing games like Monopoly. I also used to play a game called Spellathon. Now, as a family we sit together and play Monopoly. We also play a lot of Scrabble. It’s good family bonding time, which is very, very important for me.
Go home and be with family
It’s absolutely important for a professional to spend quality time at home and that's what I try to tell people - don't sit in office till 8 or 9 pm. Go home early. Spend quality time with your family and you will be able to put in much better-quality work.
Steadying the ship...
We had started out as a joint venture with American toy major Hasbro Inc. in 1986, and this went on for close to 30 years. Over the last 10 years, we sensed that Hasbro was looking at a direct presence in India. That made us look beyond Hasbro and realise the industry’s potential. Compared to the $ 90 billion toy industry worldwide, the Indian toy industry is still very small. We decided if Hasbro decides to go on its own, we can still make it big with the kind of distribution reach we have. Over the last seven years, we focused on building our own brand. Today, I'm proud to say that Giggles, our infant and pre-school brand, is a market leader. Most importantly, it is affordable for the Indian customer, whereas imported brands cater only to the top end of the market. We also have Disney licensed products on Giggles. Our own dough brand called Fun Dough again is a big success. We have a presence in arts and crafts through our brand Handycrafts. Play and Learn is our range of educational puzzles. We also have products under license from Ravensburger of Germany and Scotland Yard. We have Sum Genius from an Australian inventor, Stratego from Jumbo, Netherlands and Othello from Mega House, Japan – all made under license. We are moving towards self-sufficiency with our own brands, many of which are available globally. We are present in 22 countries with brands like Giggles and Fun Dough, and our export business has grown manifold, helping us tide over difficult conditions in the domestic market.
From 2010 to 2016, we had taken over the distribution of Lego. It made the business boom. But along with sales growth, the expectations of Lego also grew, and they wanted us to grow even faster. Sometime in 2016 -17, we decided to part ways with Lego and concentrated again on developing our own brand.
Getting into Indian games...
Today, our games portfolio is getting stronger as we are about to enter the traditional Indian games segment. There's been a lot of interest in the toy industry as a whole after Prime Minister Modi talked about developing India into a hub for toys. Now, we are all set to launch about 15-20 toys, focused on traditional Indian games, at a virtual toy fair coming up sometime in February.
Another area of focus is upping our rural distribution reach, an initiative we started about three years back, and coined ‘Operation Reach’. We identified 60 towns across our four sales regions, where we wanted to have first mover advantage, and established our presence there. Unfortunately, during the COVID period, it could not get an aggressive push. The branded toy industry has not really taken off in smaller towns, though e-commerce has helped a lot in Tier 3 and Tier 4 towns. Post pandemic, our focus will be to have a stronger presence in these 60 towns, with affordable toys.
For the toy industry, April and May are big months. May is summer vacation month, when store sales peak and in April, we sell to the stores. The pandemic hit us badly, though exports continued to do well. New launches planned for April couldn't move forward. From July, we started getting back on track, with mom-and-pop stores opening, followed by bigger stores. August to December were all good months. But we did miss out on the most important summer vacations.
Great opportunity ahead...
Most parents in India have not had exposure to branded toys. Because parents do not understand the need for toys in the development of the child, it hampered the growth of the industry, but it's all changing now. Over the next few years, we can see exponential growth in the category because India today is at 0.5% of the world's toy market, even with such a huge population. Even traditional toys will grow at double digit rates in the next 10 years. Imports are getting increasingly difficult, because of high customs duties introduced in the last Budget. Meanwhile, the Bureau of Indian Standards (BIS) has mandated that toys need to get certified by them with effect from January 1, 2021. Though 70% of the market is catered to by imported toys, when imports get difficult, there are gaps for us to fill. We see great opportunity ahead.
My bottomline is ownership...
In whatever you do, have a very high level of ownership. At Funskool, I work as if it is my own company. I'm lucky to be in an organization which allows you to do that. Before Funskool, I had a fairly long spell with TI Cycles of India – there too, it was a similar culture. I couldn't have had better workplaces than these two organisations. Never have I had to do something against my ethics or values. It’s been a wonderful journey.