Category Archives: Toy market analysis

The 21st Century Is Asia’s Century: Implications For The Toy Business

The 21st Century Is Asia’s Century: Implications For The Toy Business

Those of us ‘Westerners’ in the toy business who have lived our entire lives believing that the USA and Europe were the centre of the world are heading for a rude awakening, and if we don’t prepare them for the change our children and their children will miss many opportunities in the remainder of the 21st Century.

The reason for this is the unstoppable economic growth of the most populous continent on the planet – ASIA. Let’s not look at this in generalities though, let’s get specific – the following stats have been taken from a combination of the IMF, the World Economic Forum & the World Bank. Some of these stats are projections, as any one who has ever tried to forecast toy sales in terms of units and shipment phasing will know – future projections are nearly always wrong in some direction! Having said that though, even if some of the projected statistics don’t get to exactly where predicted they nevertheless represent major trends and shifts in the global economy.

So let’s cut to the chase, here’s the projected Top 10 economies in the world in 2024, in order of size:

  1. China
  2. USA
  3. India
  4. Japan
  5. Indonesia
  6. Russia
  7. Germany
  8. Brazil
  9. UK
  10. France

Source: https://www.weforum.org/agenda/2020/07/largest-global-economies-1992-2008-2024/

This means that four of the five biggest economies in the world will be in Asia by 2024 – that’s not very far in the future! To be specific about the toy business though, GDP doesn’t necessarily correlate exactly with toy market size and ranking by country, but having a far larger number of people with higher disposable income is likely to lead to higher toy sales.

This then is a massive growth opportunity for the toy business, but in some cases we will have to work hard on our marketing to make sure our toy ranges are relevant to consumers with newly found spending power.

The reality we have to take from these projections is that while we are not likely to lose significant opportunity in the USA & Europe, we should be turning our eyes and ears eastwards to capitalise on the opportunities which are going to abound across the next decade in Asia. It will take work, it will take effort & it will probably take a willingness to get things wrong a few times. It may also take patience as society, economic behaviour and consumer spending take time to adapt, but if you are still focused only on the USA & Europe right now you may be left behind.

The sheer speed of economic advancement in the up and coming powerhouses of Asia (most notably China, Indonesia & India) has to offer growth opportunities to toy businesses from outside Asia, the question is how many of us will be flexible enough to pivot East and to trailblaze new opportunities?

We run a Consultancy business advising toy companies on how to grow their business by a combination of strategic analysis and export sales facilitation. We have helped more than 100 toy and game companies grow. For more information on our process and methodology for growing toy sales: https://www.kidsbrandinsight.com/blog/toy-co-growth-booster-program/

We also run a venture helping Asian toy companies to find more customers and to build their own toy brands, for more information: www.ToyTeamAsia.com 

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Why New Evergreen Classic Toys Will Come From The Pandemic

When you take a historical view of troubling times in relatively modern history, the toy & games business has usually traded through with some degree of success and certainly without existential threat to the industry. The reasons for this are well known and we have recently written on this at length, but in summary this durability of our business is due to children still needing stimulation and play, and parents wanting to still look after their children’s emotional and developmental needs. In tough times, these underlying drivers actually get stronger in many ways.

This is one of the reasons why classic toy and games brands survive, or even thrive in difficult times.

But the other angle to look at this from is the likelihood of new perennial classic toy brands being formed out of this horrible situation. People tend to have an emotional bond with their favourite toys from childhood, it’s such a formative period of our lives and so both in terms of practical impact at the time and in terms of rosy nostalgic memories people tend to think very positively of the toys they played with.

What happens when times are tough is that people’s emotions run higher as we all deal with a new type of challenges from medical to economic through to managing tough emotions and even balancing mental health under circumstances most of us have never experienced. Therefore the emotional imprint of this experience is much deeper, which means that the things that help us get through these times will touch us more deeply and create a far stronger bond.

For everyone this is a difficult time, but for children in particular it can be very difficult to understand what is happening, and for them to be carrying a lot of fear with them right now. Toys can help children to feel more secure and imaginative play can help them to express and develop their feelings and find ways to manage. Board games can help them spend quality time with their parents in a fun way without the boredom which can come for many children from being made to follow strict educational curriculum.

The upshot of all of this is that new brands which manage to successfully establish themselves in the marketplace and the minds of people could find themselves becoming massive hits over a very long time. And here’s the best example of how this effect can work – aside from world wars, arguably the toughest period of time for most people in the ‘West’ in the last 100 years would be The Great Depression of the 1920s and into the 1930s. As people struggled to find work and food, the disruption to normal life was comparable in impact to what is happening today, albeit it lasted for a lot longer than the current crisis will hopefully. Out of this period of time came the king of board games – Monopoly. The bonds formed by people going through tough times playing Monopoly, arguing and negotiating away with their family and friends and eventually winning the game (if they could get to the end!) has lead to the massive long term success of the game and brand.

So, while all indications around us are that we should be fearful as businesses and slash the red pen through everything, furlough or fire our staff and slash all new product development and batten down the hatches for a crisis, the reality is that while some of this will sadly be necessary it needs to be balanced with the massive opportunity driven by the stronger than usual needs of humankind for comfort, fun and support. There is no doubt that some companies and some brands will come through this crisis as winners, and new classic toys and games will become firmly fixed alongside the likes of Monopoly, Barbie, Rubiks Cube and others.

 

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