Taking India's toy story global: Inside the rise of Delhi-based Sunbaby
Founded in 2003, Sunbaby is a Made in India toy company. After establishing itself in the domestic market with over 2,000 SKUs, it is gradually making its way abroad.
Over 20 years ago, when Sonali Aggarwal was looking for toys for her child, she saw the market lacked quality pieces and decided to take the matter into her own hands.
In 2001, she started with her husband Sunil Aggarwal as a side business with an initial investment of $15,000-20,000. Initially, they would import toys and other children-specific items like milk bottles, walkers, and more, from China and Thailand and sell them in India. Two years later, in 2003, seeing an increase in demand, Sonali decided to run Sunbaby full-time.
"India lacked quality products. Except for basic baby walkers, not many baby toys were available," she tells SMBStory.
Today, Sunbaby is a well-known Indian toy brand that is also making its way into the international market, starting in the Middle East. The company, which was registered in 2006, offers over 2,000 SKUs (Stock Keeping Units) across 15 categories of baby care and children's play products including strollers, baby chairs, car seats, baby bedding, baby carriers, and more.
In an interaction with SMBStory, Sonali charts out the journey of Sunbaby in the last twenty years and going forward, how it plans to establish a global footprint as well.
Creating a brand for Indian parents
According to Sonali, her focus was to build a brand selling toys that were not only of top quality but also pocket-friendly.
"The idea was to present products that were safe and quality-driven,” she says.
In the initial phase, feeding bottles, baby walkers, and strollers were imported from China and Thailand. Sonali made sure she didn't pick up anything "randomly" but only items that passed qualitative standards. She claims that she would verify the certifications of the factories Sunbaby was buying from.
These quality checks helped the brand gain popularity without spending much on marketing, and the founder claims that Sunbaby was profitable from its very first year of operations when it recorded a profit of about 30 percent.
The next step was to set up a manufacturing unit when the demand was getting difficult to fulfil only through imports. Sonali set up a facility in Delhi to produce locally and says the objective was very clear — to make everything in-house and not even explore contract manufacturing.
"Somehow, we didn't believe in contract manufacturing. Today, we have a 40,000 square feet manufacturing unit that has its injection molding machines, assembly lines, etc.,” she says.
Over the years, Sunababy's team has also grown from 15 in the first year to a workforce of about 150 in the present.
Source: Pixabay
Witnessing the evolution of the industry
According to a report by Invest India, the Indian toy market, which is currently pegged at $1.5 billion, has the potential to double up and reach between $2-$3 billion by 2024. Moreover, India’s market share in the global market is only 0.5 percent, indicating a massive opportunity to leverage.
The Indian toy manufacturing industry has evolved significantly and so has Sunbaby. Sonali lists a few changes the company has been witness to and how the pandemic has ushered in a new wave of toy manufacturing in India.
Even though its website was functional from day one, Sunbaby was mostly selling offline through its distribution channel until 2010. However, the challenge was that the entire cycle operated on credit. This made things incredibly difficult when the company was importing as well as manufacturing at the same time.
"The offline segment was highly unorganised. The credit cycle apart, we faced stiff competition from some of the players who sold products at cheaper prices,” says Sonali.
When the brand started getting acknowledgement from the customers, some of these creases automatically smoothened. Sonali also began to refuse to sell to dealers on credit, instead of operating on a model of advance payments only.
"This ensured that nobody could default on payments, which is so common in the market."
The opening of online marketplaces also changed the game for the toy industry. Sonali says that getting listed on platforms like Amazon, Flipkart, FirstCry, and more, has been "a welcome change".
"The online channel enabled us to sell our products directly to the customers without any middlemen. It has also given us a wider acceptance for our products from the market," she notes.
Even during COVID-19 when the offline market crashed completely, it was the online business that came to the rescue of several companies and Sunbaby was no exception. "The dealer network came to a complete standstill for one and a half years." But offline buyers shifting to online is what saved the boat from capsizing.
Sunbaby saw an almost 50 percent jump in the demand coming from online channels. Today, 30 percent of its sales come from offline whereas 70 percent come from online.
The company's revenue took a hit in FY21 owing to the pandemic. It clocked Rs 9 crore, which then rose to Rs 15 crore in FY22, thanks to both offline and online markets getting better. She says that Prime Minister Narendra Modi has also been instrumental in promoting India's toy industry.
Sonali says the Good and Services Tax (GST) regime, along with offline exhibitions, has opened several avenues for Indian toy players. The industry has also seen several brands emerging in the space, including the likes of Ankit Toys, Toonz, Zephyr, Mirada, and more.
Becoming a global brand
While Sunbaby has established its domestic footprint (with Delhi, Bangalore, Mumbai, Kolkata, and Hyderabad being its top markets), it is eyeing the international market in the coming months. Already present in Dubai and Saudi Arabia, it hopes to strengthen its presence in the existing markets, as well as explore newer territories like Egypt.
Furthermore, the founder believes leaning on data to get market insights, and improving its delivery, dispatching, and return services will help enhance business even more.
Sonali is confident that she will be able to make Sunbaby a global brand, and says, "People go all out when it comes to buying quality products for their kids."
In India, it is serving customers through online and offline channels in more than 650 cities.
Edited by Saheli Sen Gupta