Toy Industry

Mattel owns Fisher Price and if you go to a toy shop or online the products are mostly from this company if one needs a good quality options. All others are kind of knock off of the product from there and its very easy to see a quality difference. Whatever the quality of product all products are mostly “Made In China” probably 95% of them. Are these really complicated ones and does it need lot of R&D, the answer is not really. These are simple enough from either mechanical design or if battery powered even the electronics design.

China is the largest manufacturer and exporter of toy products, manufacturing over 70% of the world’s total.

Let’s open a toy

CGM35 is one of the toys that my kid who is one year old had got as a gift and I opened it just to see how they manufacture something like that. Here is picture of the Toy

The toy has these Horse, Sheep, Duck, Pig and Cow that can be removed and put back like a puzzle. Whenever Kids tries to put them back there is a switch that gets pressed and a specific sound related to that particular animal is played. The doggie is the fixed one and works as a switch.

What’s in the hardware?

The picture shows the internal and I will explain each of these as per my understanding

Here are basic hardware details

• The microcontroller was covered with a thermal black material, so my guess is it will be a 8 bit microcontroller that can drive a speaker directly and has flash where these audio files can be stored (256KB/512KB)
• Six switch inputs
• Speaker
• 3V Power AAA cell based power
• Very few resistors and capacitors
• Single layer PCB with capacitors placed on the bottom side

This hardware quite simple and can be designed very easily and manufacturing is also very straight forward. The firmware for such a simple device is also not that complicated.

But nobody is actually making those probably because the margins that Chinese manufacturing provides makes everybody less competitive.

The mechanical tooling for this toy will be one time cost and most expensive that will definitely run in lakhs of Indian rupees and there is definitely a certain volume need to start getting a positive ROI.

But it is not going to so expensive that a company if it manufactures outside China can’t make profit at all even by selling at similar price like what it is currently retailing.

The China is manufacturing for the world and we can go from Industry to Industry and its will be similar story. China has volumes from the world and for anybody else that wants to crack that economies of scale are not on your side.

The Final Note

The complexity of the product and localization is one of the important strategy that any product is important if one wants to compete with products from China. It has taken China years on concentrated growth in manufacturing where they have become a integral and central part of supply chain. In a globalized world it is not that easy to completely isolate someone who is so ingrained in anybody’s supply chain.

Can we have a blockbuster toy manufactured by a company in India and available in all the toy stores on India or online retails? Is there a scope and possibility of creating competitive products? Yes there is but is it going to be easy not at all. Does it take lot of money? Not really. It needs the courage to start making these and ultimately selling in volumes which can first help to recover fixed and NRE cost over a period of time.