Behavioral interventions for an Atmanirbhar toy industry

The growth of the Indian toy industry has been compromised for more than a decade by a deluge of Chinese imports. Recently, the government increased import duties on toys by 200% and made toy quality certification mandatory in order to revive the indigenous industry. However, high import prices may not shift demand to local toys unless a shift in the preferences of Indian consumers accustomed to Chinese toys takes place. With the covid-19 crisis triggering a reconsideration of our beliefs in globalization, never before has this reorientation become as relevant as in 2020.

Behavioral science research suggests that policy interventions best alter people’s habits when favorable changes naturally occur in their environment. In a covid-19 world, consumption habits are witnessing an evolution of their architecture of choice towards safer and quality products. The government has taken due notice of this change with a clear call for “Go-Local”. The toy market is no exception to this trend. This is where the role of behavioral economics becomes paramount in bridging the intention-outcome gap towards development. of an Atmanirbhar toy industry.

The first intervention should be to set a new standard for purchasing safe and good quality Indian made toys compared to cheap and low quality imported toys. The government could incorporate this message into the branding of toys made in India and popularize dedicated toy stores with regional brand logos. Ads can be designed to target children and parents as influencers in building Made in India brand loyalty, as Amul and Maggi did in their marketing campaigns. Schools can observe a “Safe Made in India Toy Day” and further enforce the standard by purchasing local toys from manufacturers through various government education programs.

Second, make it easier to make, sell and buy toys made in India. Uniform import duties and tax rates on goods and services for all categories of goods, without ambiguity of classification, will help toy manufacturers. An easy-to-read business guide to the toy industry, bringing together all the incentives offered by the government along the supply chain, will also be useful. Consumers will also find it easier to purchase Indian-made toys when they are placed at eye level and in attractive corners in stores, department stores, local bazaars, fairs, zoos, and museums, among others. others. Consumers will be even more excited to see local cultural ethics incorporated into product design and toy packaging. Ed-tech startups, for example, can incorporate Indian temple architecture into sets of building blocks, Chatrunga in chess sets, Paches in ludo and Amar-Chitra Katha and Panchatantra themes in general merchandise.

Evidence suggests that the ethnocentric preferences of consumers are stronger during the period of youth. Thus, at this stage, it becomes necessary to repeatedly reinforce the messages to reorient the choices of young people towards Made in India toys. Messages invoking country of origin effects, such as “Every rupee purchased from toy made in India provides employment for 5 young Indians”, can be reinforced on billboards, online outlets, shops and other public places. Personalized messages can be sent to consumers thanking them for purchasing a Made in India toy and showing them photographs of craftsmen who will benefit from a new purchase.

The toy market is characterized by wide product differentiation, especially since Chinese imports are opposed to Indian toys. Product differentiation can be realigned in favor of India when positive review reports and customer reviews of toys made in India are disclosed and popularized to generate word of mouth online and offline. In addition, prices for safe and sustainable traditional toys can be instituted to encourage local producers.

Finally, consumers’ aversion to losing cheap imported toys can be reduced by offering a safe and sustainable alternative made in India, such as the Chennapatna wooden educational toys revived by the NGO Maaya Organic and traditional board games. like “Chausar” and ‘pallankuzhi promoted by Sutradhar. These alternatives emphasize the concept of the circular economy as opposed to the linear “make, use and dispose” economy that characterizes low-cost imports. This is demonstrated by the Indian Quality Council survey of December 2019, which found that 67% of imported toys are dangerous for children.

Behavioral tools are therefore essential for building a new indigenous toy story in a post-covid Atmanirbhar Bharat. Adam Smith, in his 1759 book Theory of moral feelings, noted: “For these toy lovers, it is not so much the utility, as the accuracy of the machines which are fitted out to promote them”.

The authors are respectively Deputy Director and Deputy Director in the Department of Economic Affairs of the Ministry of Finance.

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