Category Archives: Toy market analysis

China’s Societal Shift: Increasing The Birth Rate & Impact On The Toy Business

China’s Societal Shift: How To Increase The Birth Rate & What This Means For The Toy Business

In China’s recently released census, it became obvious that China has a decreasing birth rate, and therefore a structural demographic challenge is looming. Needless to say, China’s government is working to change this situation and to stimulate birth rates.

In the last week we have seen a number of media articles looking at this issue. The Wall Street Journal, for instance, highlighted an initiative to reduce education costs. Many interviews have been published with Chinese people stating that it is too expensive to have children, so over time the society has become used to having just one child and putting everything they can into that child’s education and development. This has in turn led to a situation where private and supplemental education has become a major cost for Chinese parents. As such, we anticipate many more initiatives across the board to reduce the cost of raising children across China. Here’s the link to the Wall Street Journal article:

China Takes Aim at Educational Costs as It Seeks to Reverse Birthrate Decline – WSJ

We also came across another article talking about ‘Chicken Parenting’ in China, which highlights how intense and pushy some parents have become in China. Included in this article is a sample daily schedule for a child which basically is all about education and very little about fun and play. In many ways this is concerning because of course we know that playing is an important part of the development of children. More specifically though this suggests that the Chinese toy market would offer a lot of potential for toy & game companies offering educational products. Here’s the article referenced:

Chicken parenting is China’s helicopter parenting on steroids – SupChina

The outlook for the toy business in China looks positive overall. Despite decreasing birth rates, it is clear that action is ongoing to incentivise more births and to reduce barriers or discouraging factors to families having more children. We can’t be sure when all these measures will take effect, but it is clear that significant action is under way to reverse the trend. Moreover though, China’s parents are increasingly investing very heavily in their children’s development, and as the relatively recent advent of consumer society continues to mature, it looks likely that toys with educational and developmental benefits have increasing opportunity in China, especially as disposable income continues to develop alongside further economic growth.

Do you need help to understand the toy & game business? We help people from all around the world to understand and successfully enter the toy business. For more information on how we do this, check out our services here: www.KidsBrandInsight.com/services

 

Have you listened to our Playing At Business podcast? We talk about selling toys & games, interview successful people from across the toy business & we look at key trends in the toy & game business: https://playingatbusiness.libsyn.com/

The U.S.A. 2020 Census Results Have Been Released: Growth Opportunities Ahead For Toy Companies

The U.S.A. 2020 Census Results Have Been Released: Growth Opportunities Ahead For Toy Companies

The results from the 2020 Census in the USA have been released. Aside from changes in the balance of political representatives from state to state, the headline result is that the U.S. population grew from 308.7million in 2010 to 331.4million in 2020.

So, what does that mean for the toy industry? Well, although the population growth was the slowest since The Great Depression, the reality is that more people means a bigger economy in general, and more specifically more people to buy toys & other gifts. Now for sure the demographic structure of population in terms of birth rates and increased life expectancy doesn’t guarantee that a bigger population automatically equals more children. However, what it absolutely guarantees is more people, and people tend to have families, including kids. Maybe there will be more grandparents living longer, acting as secondary purchaser of toys for a child for longer on average. Maybe it is more Aunties and Uncles, or maybe it’s more young adults set to become professionals. The bottom line though is that in 2020 there were more than 20m additional human beings in the U.S.A. versus 2010, and there is no way that can act as an inhibitor to toy sales.

The bottom line is that the U.S. population looks set to continue to grow over time, albeit perhaps at a slower rate than seen previously, and this cannot fail to be at least a moderate growth driver for the toy & game business.

 

Do you need help to grow sales for your toy company? We help people from all around the world to sell more toys, both in their home markets and into export markets. For more information on how we do this, check out our services here: www.KidsBrandInsight.com/services

 

Have you listened to our Playing At Business podcast? We talk about selling toys & games, interview successful people from across the toy business & we look at key trends in the toy & game business: https://playingatbusiness.libsyn.com/

 

 

Massive Retail Store Closures To Follow The End Of The Pandemic?

Massive Retail Store Closures To Follow The End Of The Pandemic?

There have been a number of reports in the media about impending store closures on a massive scale after the pandemic dissipates. Check out www.RetailDetail.Eu for example, they highlight a worse case scenario where the U.S. loses 150,000 retail stores, Germany loses 80,000 and the UK having already announced the loss of 15,000 stores.

These seemingly apocalyptic figures may prove to be right, or they may turn out to be exaggerated, but what is clear is that the pandemic has (probably permanently) changed shopping habits. For some countries where technology was already a massive driver for retail (like China for instance) the pandemic is likely to have less impact, but for most major western markets the outcome of these crazy times is likely to be a permanent acceleration in the shift to online/mobile shopping.

With national lockdown recently easing in our home market of the UK, we took a look around retail and found things to be pretty desperate overall. A quick trip around the shopping area in the centre of Shrewsbury in the UK suggests at least 25% of stores (of any category not just toys) have not reopened following a 3-month national lockdown.

The reality though is that while retail in general seems likely to see store closures, the toy business is booming in comparison with other retail sectors, and once physical retail becomes a routinely available option once again post pandemic why wouldn’t it remain viable? The world around toy stores may be set for massive change, and all remaining toy stores must have already embraced a physical/digital hybrid model to still be trading, but when you take a look at toy store chains around the world, they have a better chance than many other categories of retail because toy sales have boomed during the pandemic, and we all know the underlying drivers suggest there is unlikely to be a catastrophic drop in demand.

Those who have been in the toy business a while know that there has never been a time when toy retail has been easy. It is supremely competitive and has been for all of living memory. While high streets and shopping malls around the world may have to deal with a significant change from retail to entertainment and dining/coffee outlets, at this stage it is hard to see physical toy retail disappearing en masse.

Our recent interview with Rick Derr of Learning Express toys for our Playing At Business podcast suggests that physical retailers can thrive if they adapt & learn new ways to compete and play the game. Check out that interview here:

https://playingatbusiness.libsyn.com/running-a-successful-toy-business-with-rick-derr

While we’re all waiting to see what the world will look like post pandemic, we can at least take heart from the reopening of specialist toy stores in various markets. This week we visited a Smyths Toy store in the UK, and found it to be impeccably merchandised, full of happy families and full of must have toy products. It was a truly joyous experience, and that type of joy will not drift away after the pandemic. Toy retail will remain tough but nevertheless, there are significant reasons why there is still a place for toy stores going forward, for which we should be thankful.

 

Do you need help to grow sales for your toy company? We help people from all around the world to sell more toys, both in their home markets and into export markets. For more information on how we do this, check out our services here: www.KidsBrandInsight.com/services

 

Have you listened to our Playing At Business podcast? We talk about selling toys & games, interview successful people from across the toy business & we look at key trends in the toy & game business: https://playingatbusiness.libsyn.com/

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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