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Rediff.com  » Business » Senior-level exits spark worries at toy maker Mattel India

Senior-level exits spark worries at toy maker Mattel India

April 02, 2014 10:43 IST

Senior-level exits spark worries at toy maker Mattel India

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Viveat Susan Pinto in Mumbai

All is not well with the Indian operations of Mattel, the world’s largest toy maker and creator of the famous Barbie doll.

Karun Gera, the company’s country manager, and a few other senior executives, including sales director Uday Bambulkar, stepped down last week.

Senior executives in the finance and logistics departments have put in their papers, too.

The resignations follow an audit of the Indian operations of Mattel by a well-known audit firm, experts say.

Mattel did not respond to emails sent on Monday morning.

An email to Rahul Bhowmik, marketing director, Mattel India, elicited no response till the time of going to press, while another to Mattel’s US office also remained unanswered.

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Image: A room is pictured inside a 'Barbie Dreamhouse' of Mattel's Barbie dolls in Berlin.
Photographs: Fabrizio Bensch/Reuters

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Senior-level exits spark worries at toy maker Mattel India

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Mattel, once the leader in the country’s Rs 2,000-3,000-crore (Rs 20-30 billion) organised toy market, has been losing ground to rivals like Funskool, the joint venture promoted by MRF Tyres and Hasbro, the world’s second-largest toy maker.

In August 2013, an Assocham study pegged Mattel’s market share at 20 per cent and the combined share of Hasbro and Funskool at 40 per cent (43 per cent if the market share of the Lego line, sold by Funskool, is added).

Industry insiders say Mattel has struggled to keep pace with Funskool, which has pushed Lego and toys based on characters from action films like Transformers, Spiderman and Iron Man aggressively in the past two years.

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Image: A Barbie toy house.


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Senior-level exits spark worries at toy maker Mattel India

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Lego, which involves construction blocks, has helped Funskool surpass Mattel. Though Mattel saw no significant launch last year, it endorsed cricketer Virat Kohli, during the Diwali season, for its Hot Wheels range.

During his visit to India in October 2013, Peter Broegger, senior vice-president (Asia-Pacific), Mattel East Asia, had said the company was counting on Bollywood merchandise, with tie-ups with films like Dhoom 3.

However, sales for the company in December, when the film was released and a month considered the best for toy sales, were not very high.

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Image: Customers eat dessert during the media preview of a Barbie-themed cafe in Taipei.
Photographs: Pichi Chuang/Reuters

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Senior-level exits spark worries at toy maker Mattel India

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In the past five years, about 40 per cent of Indian toy companies have shut shop, while another 20 per cent are on the verge of shutting, as Chinese products flood the Indian market, according to the Assocham study.

Also, the market for toys has evolved in the past few years, with products for boys outnumbering those for girls.

Mattel, best known for its Barbie range of dolls for girls, has no major product in the boys segment.

Besides video games and action hero miniatures and toy cars, the boys segment has board games.

Funskool has various tie-ups to release merchandise for Captain America and the sequel to Amazing Spiderman (to be released by the end of April), the fourth part in the Transformers series and Guardians of the Galaxy.

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Image: The art work titled "Yellow," which is made out of Lego bricks, is seen as a visitor poses next to another Lego art work titled "Skulls" (L) during 'The Art of the Brick' exhibition at the Brussels Stock Exchange.
Photographs: Francois Lenoir/Reuters

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Senior-level exits spark worries at toy maker Mattel India

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Mattel and Funskool: Where the two rivals stand

MARKET SHARE

Funskool+Hasbro+Lego: 43 per cent

Mattel: 20 per cent

Source: Assocham study on toy market (2013)

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Image: Models pose with the popular 'Barbie' doll during the press preview of the 65th International Toy Fair in Nuremberg January 28, 2014.
Photographs: Michaela Rehle/Reuters

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Senior-level exits spark worries at toy maker Mattel India

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State of the toy market

Organised toy market’s size

Rs 2,000-3,000 crore (Rs 20-30 billion)

Size of the overall toy market (organised plus unorganised)

Rs 6,000-8,000 crore (Rs 60-80 billion)

Source: Industry

Concerns

  • Assocham study says that 40% of Indian toy companies have closed in the past five years
  • Another 20% are on the verge of shutting shop
  • The reason for the closure of domestic toy companies is cheap Chinese imports flooding the market

Image: Designer Katharina Lukacs sews a dress for the Barbie doll in her Dirndl tailoring shop in Munich.
Photographs: Michaela Rehle/Reuters

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