Say soft toys and teddy bears, and it’s probably an imported Chinese-made one you may get to buy. But India’s own entrepreneurs have been doing it for quite a while, like Latha Suresh, who founded S G Toys some 18 years ago.
This is a story of passion and hobby that turned into a business. Latha’s enduring fascination for soft toys was what first led to learn how to make them.
“Most soft toy making is outsourced,” she points out, from her 15 member unit in Peenya. “We have 30 more women working from their homes.” What’s striking about Latha’s business however, is that it is wholly run by women, stitching, cutting, stuffing and packing. “We do not entertain men,” Suresh rules out. At one point, when almost all her products were completely hand-made, she had 70-100 women working with her. Now however, machinery and automation has pared it down to just 30.
Latha doesn’t have it easy however. The Chinese products permeating the market is a source of competition that she cannot match with scale or pricing.
“They not only have campuses spread over many acres, they also provide housing to their employees within the campus. The workers there work for a lesser wage,” she laments. It was to keep up with the Chinese that she herself opted to import Chinese cutting machines. This has helped speed up her output and increased her sales. But while productivity has risen, margins have gone the opposite way. What she wants to do however, is get on the e-commerce bandwagon. But, she says, in e-commerce rotation is very high and margins are bigger.
But loyalty plays an important part in building up a business and Latha’s is no different. Her primary buyers have been three people right from the beginning - one is from Hyderabad, Chennai and Bengaluru each. “I have the same customers for the past 18 years,” she admits.
As with any entrepreneur, she has and does face significant challenges. One issue is human resources. “Getting workers is hard. This is also a seasonal business. During the school season, the sales drop. They only pick up after Diwali. And with imports from China garnering low prices, I often end up making a loss of `3-4 per piece. This, while the margin is often only `3-5,” she points out.