Toy Market Growth Opportunities In Turkey & The Istanbul Toy Fair
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THE NEED FOR GROWTH MARKETS
I have written extensively in this newsletter about the dropping birth rates in most major ‘western’ Toy markets. This is a threat to sales growth, because if we have fewer children we have fewer customers. However, one avenue to sales growth over the medium term is to look at economies which are up and coming and to invest your efforts into those markets to capture market share. Then as that market grows, so does your business there.
For me one of the obvious opportunities, especially for European companies, is Turkey. It’s hard to find a better argument for growth than Turkey in and around Europe.
Before I get further into the case for Turkey, I was invited to visit Istanbul for the upcoming Turkey Toy fair (March 6th to 9th 2024), more details on that here if you are interested in attending: https://istanbuloyuncakfuari.com/en/
TURKEY: GROWTH OPPORTUNIES AHEAD
I spoke to one of my friends at a recent trade show who told me they had sold 60,000 units of one of their Games products in Turkey. That really opened my eyes, because that is a large sales volume for a game in any international market outside North America. This led to me conducting further research on the economy and Toy market of Turkey.
According to accountancy firm PWC, Turkey is set to move from being the world’s 17th biggest economy to being the 11th biggest economy by 2050, ahead of France and Italy, and very close in size to the UK. Turkey’s current population of c. 85 million people is set to hit 100 million by 2040.
Admittedly Turkey has had an inflation problem historically and is currently experiencing very high inflation c. 65%. This creates both challenges and opportunities for working with Turkey.
In terms of birth data, Turkey introduced 1.04m new potential Toy consumers in 2022, which is more than any European country. Turkey had more births than each of the ‘Big 3’ of Europe in France, Germany and the UK who all saw births of 710k to 730k new children each. That’s a lot of new children being born every year in Turkey, and so those who have yet to establish distribution into Turkey are missing a lot of youngsters to sell Toys to. As birth rates decline in many major Toy markets, there are a lot of newborns in Turkey every year that we can’t afford to ignore.
THE TOY MARKET IN TURKEY
In 2023, Turkey imported Toys worth c. $200m USD. That might not sound huge, but bearing in mind how under exploited the market is, and how the country’s economy is set to grow in the coming years there are clearly incremental opportunities on offer in Turkey. Just to prove this, the year-on-year growth trend in Toy imports in Turkey was + 28%. There are not many countries growing Toy imports by those kinds of numbers currently!
The biggest Toy categories in Turkey are (listed amounts are at import value, retail value would be higher):
1. Building blocks (plastic) - $40.8m USD
2. Toy sets - $38.7m USD
3. Other plastic Toys - $27.7m USD
4. Figures (non-stuffed) - $21.6m USD
5. Other models with electric (plastic) – 15.8m USD
6. Dolls & human figurines - $15.8m USD
7. Stuffed Toys - $13.5m USD
8. Toys made from other materials - $8.4m USD
TOY RETAIL IN TURKEY
In terms of retail structure, Turkey’s domestic market has some of its own differences, line in other countries.
For online channels, Hepsiburada, Trendyol and Amazon are the top tier in Turkey. These online channels are important in a country which is as geographically diverse as Turkey.
Toyzzshops have c. 250 stores in Turkey and is the biggest Toy specialist chain. After that, there is also Armağan Toys with nearly 80 stores across Turkey. Following that is another specialist Toy chain: Adore Toys.
Another small but growing area for Specialist stores are niche stores including TırtılKids, KeyifBebesi or Penguen. These stores tend to be in established shopping malls in urban areas of Turkey.
The Grocery channel is also a player in Turkey with Migros (c. 2000 stores) & Carrefour (c. 850 stores) having a strong presence.
Additionally there are various independent stores, stationery chains and also discount retailers.
In terms of retail dates & key events, Turkey has several: National Sovereignty & Children’s Day is celebrated in Turkey on 23rd of April. Also, Turkey has a LONG summer vacation (those poor parents!), running normally from mid-June to start September, this tends to prompt some Toy purchasing as parents try to occupy their children. Being a Muslim country, Christmas is not celebrated in Turkey, however New Year’s Eve is one of the biggest holiday dates in Turkey. There is a tradition of giving gifts on New Year’s, which instead of being brought by Santa Claus are brought by ‘Noel Baba’.
TURKEY AS A NEARSHORING OPTION
I have been investigating Turkey as a potential Sourcing hub for supply to Europe for a few years now. As some production of Toys has begin to ebb away from China, and as various crises from the Covid induced shipping container price inflation through to the Houthi rebels attacking ships heading to the Suez Canal, AND as the world of Toys begins to rethink our reliance on shipping products from the far side of the globe, so Turkey can be part of the solution.
Turkey has a comparatively very low wage level versus most European countries. Minimum wage is currently the equivalent of c. $550 USD per month in Turkey, which is around the same ballpark, or perhaps a little less than China. The benefit with Turkey vs China of course is proximity to the major European markets, total driving time from Istanbul to major European capitals like Paris or Frankfurt is under 24 hours, versus container ships from China taking c. a month.
As with elsewhere in the world though, Turkey cannot begin to rival China’s breadth of component supply chain, efficiency or depth of capabilities, BUT Turkey is a real option for basic plastic Toys today. Going forward I anticipate significant growth in exports of Toys from Turkey – for 2023 exports were c. $83m USD, I would expect significant growth of 3 times, 5 times or even ten times that level in the coming years.
For any companies seeking manufacturing alternatives closer to Europe, Turkey really does now merit further investigation.
TURKEY AS A PRODUCT DEVELOPMENT HUB
Another trend to highlight is a small but strong growth in Turkey as a product origination and development hub. By way of example, one of my client’s – TOYI – embodies this with an innovative, open ended and sustainable approach to the Construction Toy category.
Turkey’s burgeoning start-up culture is leading to the creation of a strong hub for Toy ideation, and as such is worth investigating for future products for Toy companies from elsewhere to distribute into their own markets.
ISTANBUL TOY FAIR
Now we come to the best way to access the opportunities on offer in Turkey. The Istanbul Toy Fair is held on the European side of Istanbul at the Tuyap Fair Convention and Congress Center. The 2024 show runs from March 6th to March 9th and will see people arrive at the show from more than 60 countries around the world.
The exhibitor satisfaction for the show is 97.3% and the show features exhibitors both from Turkey and from other countries as overseas companies seek to exploit the Turkish market opportunity.
If you are a Trade visitor you can access Free tickets to The Istanbul Toy Fair here:
HOSTED BUYER PROGRAM
The Istanbul Toy Fair show organisers are offering a Hosted Buyer Program, whereby you can qualify for two free nights accommodation in a 5-star Hotel next to the show ground (at the Tuyup Palas Hotel). if you would like to take advantage of this program, you can just contact the show organisers direct via the website, or I can put you in touch with the right people if you need :)
Sign up for my free e-newsletter and receive all the latest reports, analysis and insights on the Toy & Games business: sign up for free here: https://forms.aweber.com/form/54/1325077854.htm