Anand Mahindra, chairman of Mahindra Group, recently affirmed in a tweet, “The answer to the question in your headline is Yes…” in response to a New York Times article titled “Is India the future of international brands?”
The article highlighted a significant shift for Melissa & Doug, a prominent American toy brand. For decades, the company relied on Chinese factories to produce its wooden puzzles, stuffed animals, and play mats.
However, the Covid-19 pandemic, which led to widespread lockdowns and disrupted Chinese manufacturing, prompted Melissa & Doug to reconsider its production strategy.
Trade tensions between the United States and China further exacerbated the situation, with tariffs imposed by President Donald J Trump and continued under President Joe Biden, increasing the cost of Chinese imports.
Yes, @nytimes
The answer to the question in your headline is Yes…
— anand mahindra (@anandmahindra) June 29, 2024
“Not sure about the brands but India’s youth is India’s greatest strength. Especially with knowledge is getting generalized with Internet and AI access, things become much easier,” one user responded.
“Marked by strategic policy implementations, favourable demographics, and a strong digital infrastructure, India is emerging as an attractive investment destination,” another said.
“This is underscored by a significant surge in FDI flows,” he further said.
In February 2021, facing these challenges, Melissa & Doug sought alternative manufacturing locations. This search brought their chief supply chain officer to a factory in Greater Noida, India, owned by Sunlord, a family business. The executive was pleasantly surprised by the factory’s ability to produce high-quality wooden toys at prices competitive with those in China, as per the report.
By late 2022, Sunlord had completed its first order for Melissa & Doug, consisting of about 10,000 items. The collaboration quickly expanded, and Sunlord now produces 25,000 items per month for the American toy company. This move signifies a broader trend of diversifying supply chains away from China, driven by the need for greater resilience and cost management in the face of global uncertainties, as per the report.