A major part of toys on Georgian market are imported from China. Key problems are related to not only quality and inappropriate prices, but also safety standards. Therefore, we may conclude that toys business in Georgia is unpopular.
According to spread information, a major part of cheap and imported toys contains an excessive dose of leader. There are very weak control mechanisms in Georgia in this respect and parents should have to make right choice.
The Caucasus Business Week (CBW) has inquired how popular toys business is in Georgia, what its perspective is and why the country does not have valuable production of toys.
Ana Inashvili, founder of Babuta The Doll Maker company of handmade dolls, explains that her company cannot and will not try to compete with cheap imported toys, because the company keeps its own niche on the market. We started manufacturing fabric toys 2 years ago and sell products by order, she said.
I would like to expand my business, not to do business alone, but currently this business is an artistic direction for me and I do not rule out to launch mass production in the future, Inashvili said.
«I create products that may be applied by both children and adults, creative things. As to Chinese products, I would not introduce myself as a competitor to imported toys. They are in other category and our products belong to other category», Inashvili noted.
An averaged price of dolls produced by Babuta the Doll Maker ranges from 50 to 80 GEL, she said.
Geo Tous Company
Geo Tous, wooden toys manufacturing company, appeared on the market 2 years ago. The company founder partner David Katsitadze explains that toys business is not attractive in the country because of several factors and this signifies people cannot see potential in toys business, despite the market competition is sharp in this segment, he said.
Today we have unhealthy competition in this direction, Katsitadze said.
Another reason is related to complicated crediting procedures at commercial banks. Toys business is a new line in the country. Therefore, commercial banks consider this business as a startup and require co-financing component from clients, as well as guarantees and this factor creates problems.
Production of high-quality and safe toys is quite expensive and this is one of the serious problems. Raw materials are expensive and this factor grows the prime cost. At the same time, cheap and harmful products penetrate the market. «The toys made of wastes costs far cheaper and domestic production cannot compete with them», Katsitadze noted.
Regulations harmonized with EU legislation will be introduced in June 2019 to regulate imports of harmful toys and make the market competitive, Katsitadze noted.
Informative awareness of our population should increase so as they know how harmful imported cheap products are. Retail sector should set control on products, he said.
«It is very simple to control this process. The label must indicate the structure of a toy. Therefore, retail sector will decide simply which products are harmful and which not. This process will enliven competitive environment», Katsitadze noted.
Can Georgian toys compete with imported products? Yes, they can, Katsitadze answered and referred to Geo Tous toys.
«We have managed to offer competition to them in terms of quality and structure. A big niche will freed and many companies will be enabled to occupy this niche. Business sector has already expressed interest in investing money in toy business», Katsitadze noted.
The country also lacks for professional staff. It is difficult to find due specialists, however, many programs were launched in this direction, including with the support of the state sector and donor organizations, Katsitadze noted.
Nino Chikovani, one of the founders of Tamashobana educational toys company for children and adults, says that Tamashobana company produces all toys by its own design. There are no toys of Georgian production on Georgian market. There are only small enterprises in the form of workshops, but the country does not have large-scale production of toys, she noted.
«Georgian toy manufacturing companies are not widely represented in the country. Toys imports grow by 20% every year. In reality, the market is undeveloped and there is no production in Georgia. This is a regretful fact. Imported toys should be controlled and regulations should change. Small business should be supported as part of Startup Georgia project», Chikovani said.
In foreign countries, age restriction is indicated on toys. For example, a specific toy may be applicable for children from 3 years old or above 5 years old. This issue is not regulated in Georgia, Chikovani said.
Children are not accustomed to toys because of lack of children-adapted infrastructure in yards. The market is developed at slow paces and in several years parents will conclude not to buy low-quality and cheap toys and they will prefer to pay comparatively expensive price, she said.
As to toy business profitability in Georgia and expediency of making investments in this field, Chikovani explains that profitability depends on adequately arranged business model.
Kodala, wooden toys manufacturing company, launched operation about 4 years ago. The company director Kote Svanidze explains that the company has developed several lines for production of ecologically clean wooden toys: assemblage toys, mechanic toys, figurative and corporate toys. The company also manufactures various souvenirs.
The company supplies products to such major networks as Smart, Goodwill and Super. Currently, the company manufactures 150 units of toys, he said.
As to Kodala toys prices, they are acceptable for all categories of population, taking into account cheap and harmful toys. Kodala products prices range from 5 to 25 GEL.
Toys business requires due knowledge. Moreover, it is a startup and it is difficult to get established on the market, he added.
«We have been operating on the market for 4 years and make advancements stage by stage. There is no public demand for ecologically clean toys produced in Georgia. I believe this attitude will change in the future and the demand for our products will grow», Svanidze said.