Asia’s Fast-Growing Economies To Drive Long Term Growth In The Toy Business

Asia’s Fast-Growing Economies To Drive Long Term Growth In The Toy Business

For the last 2 centuries or more the economic powerhouses in the world have been Western, Europe first, followed by the might of the USA. Looking further ahead into this century though, it is clear to see that future economic growth on this planet is going to grow most rapidly in Asia. Asian countries once viewed as 3rd world are now coming to the fore.

There are various data sources supporting the evident economic growth ahead in Asia, the one we will refer to in this article is Price Waterhouse Coopers ‘The World In 2050’ published report. That report shows clearly that the largest 5 economies in the world by 2050 will be (in order of size): China, India, USA, Indonesia & Brazil. Much has been written about China’s economic miracle since Deng Xiaoping’s ‘Opening up’ of China’s economy, but far less has been written about the massive economic growth prospects of India and Indonesia.

India is still today a country with many problems to resolve including massive infrastructure investment needed, terrible poverty for hundreds of millions of people and issues with public health which would be viewed as catastrophic elsewhere, but in India are just viewed as normality. At the same time though, India’s massive population is still set to grow further, unlike China’s current population trajectory. Additionally, having contributed so much to major global tech companies away from India, that trend is now reversing with India’s tech scene gathering pace. In terms of consumerism, India has a growing middle class of several hundred million people who are now finding they have disposable income and want to give their children more affluent upbringings than they may have had. The massive growth of Hamleys in India shows that India is no longer just a low quality, super low price point market, there is a growing appetite for ‘international’ standard toys.

Indonesia has around 275million people and is expected to rise above 300million sometime between now and 2050. Today Indonesia’s economy is the 15th biggest in the world – around the size of the Netherlands – just above $1 trillion USD. Yet by 2050 it will hit 4th biggest economy in the world. With economic growth typically comes an accompanying growth in consumerism.

Whereas Asia was once viewed by Western toy companies as difficult to access, difficult to scale up and therefore were often a lesser priority, this view can no longer be allowed to prevail. Lego’s massive store opening program in China (targeting 300 stores by end 2021) is just one example of a significant shift in focus for Western toy brands.

Over the next few decades, the economic fulcrum of the world is going to shift dramatically towards Asia, and alongside that will come increased sales opportunities for toy companies in the West, alongside a growth in Asian toy companies seeking to sell their toy lines into the West. Interesting times are ahead!

 

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