Reliance, Circle E Retail in Joint Venture to Aid Hamleys and Rowan Toy manufacturing

On April 23, 2023, Reliance Retail announced its decision to merge with Circle E Retail, a Haryana-based toy company, in order to gain control over the toy manufacturing process. This move is expected to be very beneficial for the Indian Toy Industry, which has high growth potential in exports of plastic toys and board games to countries like the United States, the European Union, and the Middle East.

According to a collaborative estimate by industry association FICCI and KPMG, the Indian toy market was projected to be valued at over $1 billion in 2021 and to double that amount to $2 billion by 2025. Another report, “State of Play: India’s Toy Story – Unboxing Fun and Beyond,” also suggests that India can target a 2% share of global exports by 2025.

The Reliance, Circle E Retail Joint Venture

Reliance Retail’s decision to merge with Circle E Retail will allow it to integrate its toy business vertically and control the entire toy ecosystem. Circle E Retail is widely known for its specialty in toy production, owning cutting-edge production facilities, and is also fully authorized to produce and sell a wide variety of toys. The company’s collaboration with Circle E Retail will help it integrate processes ranging from design to shelf and gradually reduce its dependence on other toy producers.

Reliance’s Acquisition of Hamleys and Rowan

This merger will also benefit Reliance Retail’s recent acquisitions, Hamleys and Rowan. Hamleys, a UK-based company known for being the oldest toy brand in the world, was acquired by Reliance Retail for Rs 620 crore in cash. The company also acquired another toy store, Rowan, to operate with small shops in an affordable segment. Hamleys will continue to operate in the premium market, while Rowan will help Reliance Retail reach the mid-premium and mass markets with its cost-effective products. Rowan retailers will offer greater discounts and toys with a significantly reduced unit value, making the products more accessible to the general population. Reliance Retail’s new venture with Circle E Retail will cater to Hamleys and Rowan.

Future of India’s Toy Industry

Reliance, Circle E Retail Joint Venture, and acquisitions have played a major role in developing India’s toy industry, which is now profitable compared to two to three decades ago. With Circle E Retail’s specialization in toy production and ownership of world-class production facilities, the toys produced in India are highly resilient and intelligent. Greater creativity and technical development in the toy sector have resulted in a wider selection of toys, raising the overall volume of toy sales in India.

These mergers have also helped broaden public interest in designing and manufacturing toys, and many institutes around the country now offer toy-making courses. Some well-known institutes offering willing students the opportunity to learn toy production include the National Institute of Fashion Technology in Delhi, the National Institute of Design in Gandhinagar, and the School of Design at CMR University in Bangalore.

In conclusion, Reliance Retail’s decision to merge with Circle E Retail is a significant development for the Indian toy industry. With the company’s control over the entire toy ecosystem and its recent acquisitions of Hamleys and Rowan, it is well-positioned to expand its reach and improve the accessibility of its products. As India’s toy industry continues to grow, there will be more opportunities for innovation, creativity, and development in this field.

Read more: Reliance set to close a deal with Roposo

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