Setting Priority Countries For Toy Export Sales
One of the most fascinating features of the toy business is the vast array of countries to sell toys to around the world. For those who are interested in travel and experiencing different cultures, the toy business offers much (at least in normal times, maybe the travel opportunities are restricted right now but nevertheless export sales opportunities abound).
Clearly some countries offer far bigger commercial opportunities than others, and some are likely to offer a better fit with your product lines in particular. For those who have been around a long time (ourselves included!) it is all too easy to have a fixed mindset in terms of which markets are the priorities, but as economic development has surged ahead in the world over the last decade or more things are perhaps not quite as simple as they once were.
There is one golden rule though for sure, which is that the USA is by far the world’s largest individual toy market and looks set to be so for at least the next five to 10 years. Therefore, when we work with companies to boost their export sales, we always start with the U.S. toy market, because even if a company already has distribution into this most lucrative of markets the reality is that any efforts and investments of time, resources and money is more likely to pay back in a big way in the U.S.A.
What has changed quite remarkably in the last decade is the position of the toy market in China. China’s domestic toy market is growing fast, and whereas it was once a toy market dominated by generic ‘me-too’ products, in recent years the place in the market for toy brands like Lego and entertainment driven properties has been growing substantially. Whereas China would not have been an obvious country to prioritise for export sales at one point in time it is now an important sales opportunity today, but perhaps more importantly looks set to be of even bigger significance going forward.
After the U.S. and China, we normally point toy companies looking for increased export sales to Europe. Europe’s toy market is roughly on a par with the market in North America, albeit much more fragmented and with a much larger number of different countries. Just to put this in context, a Europe wide contract might include 40+ countries, whereas North America would typically be defined as just three countries.
Of the markets in Europe, the ‘Big 3’ markets are the UK, France & Germany. These three markets are all substantially larger than any other European toy market. While all are quite different in terms of the product mix, emphasis on quality versus price, distribution channels and the relative importance of licenses, it is normally best to find good options for distribution in these countries before looking too much further afield.
After these 5 markets (USA, China, UK, Germany, France) there is a plethora of toy markets of smaller but still substantial size, and one of the most interesting dynamics is the rate of growth and importance of some of these markets. For instance, India is a comparatively small market at this point in time, with potential sales which are typically not found to be worthy of much effort and investment for international toy companies. However, in terms of growth rate of both the toy market and the economy, India offers good long-term growth opportunities. Ten years ago, countries like Turkey and Greece would have been far down the pecking order, but now can deliver significant opportunity.
We find when consulting for our clients on toy export sales that the bigger the company is the more they benefit from targeting the larger markets. For the smaller companies who don’t have such a track record of sales success they often benefit more from selling to smaller countries which are often off the radar of bigger companies. As ever though, each company is different and aside from their product mix, the management approach and sales team capabilities often direct which export markets are the most important.
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/