A closer look at India’s overlooked $2B toy segment and its surprising retail potential. 

As India marches towards a projected $1.6 trillion retail economy, much of the spotlight remains fixed on the usual suspects—fashion, electronics, and grocery. These are mainstream, no doubt. But true disruption often brews in the margins. 

The real inflection points? They’re in the underexplored. The complex. The chaotic. 

Let’s understand one such segment from one of our recent reports, ‘India’s Got Retail’ – The Toys market – a US$ 2–3 billion market today. Often dismissed as niche. Largely unbranded. Overlooked by mainstream retail narratives. 
But scratch beneath the surface, and it’s a sector that’s quietly brimming with potential. What it lacks in organization, it makes up for in demand velocity, shifting consumer preferences, and an urgent need for structured supply chains. 

It’s exactly the kind of category that captures the essence of India’s retail paradox: fragmented supply meets rapidly consolidating distribution. 

Most of the toys sold in India don’t carry a brand name or at least a marquee brand name. In fact, unbranded and regional players account for the maximum part of the market with small, often hyper-local manufacturers, many of them MSMEs, serving neighbourhood retailers and informal sellers. 

That doesn’t mean the demand is small or unsophisticated. Indian parents are spending more on toys every year. They care about safety, value, and learning-led play. They’re just navigating a market where discovery is patchy and price remains a primary driver. 

This is where retail companies have a clear opening! 

Solving for Chaos: Why SKU Complexity is a Retailer’s Opportunity 

The real complexity lies in the sheer variety. Over 7.5 million SKUs exist across toys—from plush animals and puzzles to DIY robotics and ride-ons. Preferences shift by age, use case, and material.  

But this fragmentation also tells a story. While the top 1.2 million SKUs account for half the demand, the rest of the long tail—colour variations, licensed characters, interactive features—matters just as much in shaping perception and driving discovery. 

And this is precisely what organized retail is well-positioned to solve. 

Time to Treat Toys as a Strategic Growth Category? 

Today’s platforms have the infrastructure and data to make sense of this complexity. They can curate better assortments. They can streamline sourcing. And they can build trust with parents who are actively looking for safer, smarter options. 

Yet very few retailers have built a focused strategy around toys. It’s often treated as a supplementary category—tacked onto broader merchandising efforts, without the kind of rigor that drives real growth. 

But the signals are clear: this market is entering a new phase. Quick commerce players are seeing rising traction in impulse-led toy purchases. D2C brands focused on learning toys are gaining loyal followings. And online marketplaces are beginning to categorize and personalize toy recommendations more effectively. 

The opportunity is to own the category narrative through better discovery and smarter pricing. 

Key Questions for Industry Leaders 

• Are we approaching toys and similar other verticals with the same strategic rigor we apply to other mainstream verticals? 

• Can we build or partner to own the long tail—local suppliers, regional tastes, seasonal trends? 

• Are we investing enough in understanding play behaviours by city, age, and income cohort? 

• Can our platform become the go-to for safe, discovery-led, value-focused toy buying? 

• Are we ready to build private labels or exclusive collections in this space, before someone else does? 

Because while toys may seem like a “low-stakes” category, they are often a gateway into family-led consumption journeys—driving discovery, loyalty, and cross-category spends. 

The Redseer Edge 

 With the right lens, even traditionally overlooked segments can reveal untapped demand, whitespace in assortment, and emerging consumer behaviour across geographies and income tiers. 

Redseer has partnered with leading retailers to decode these shifts, combining data, on-ground intelligence, and category insights to inform sharper, more scalable strategies. The toy market isn’t about selling plastic cars and plush bears, nor is it just a side aisle. It’s about capturing attention, building trust with young families, and shaping cross-category growth. A future where growth will not come from uniformity, but from mastering variety. Where leadership won’t be about owning SKUs, it will be about organizing them. 

The players who build systems that embrace complexity with 7.5 million+ SKUs and evolving play patterns will be the ones that define the next decade of consumption. 

Our latest report breaks down where the next value pockets lie and what it takes to win in this new environment. Download the full report to explore how leading players are reshaping strategy across categories—and how your brand can stay ahead.