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The European Toy Market, A Practical Overview

The European Toy Market, A Practical Overview

Europe has just under 10% of the world’s population, approximately 16% of the world’s GDP (just a little bit less than the USA & China) and more than 50m children. Europe therefore represents a significant commercial opportunity for those in the toy business – the market size is in excess of €18billion.

The challenge of course is that Europe is a more complicated region in terms of disparity and local language and cultural difference. Europe has 44 sovereign states and 24 official languages, and so it is a complicated place to try to do business. Most of Europe’s nations are part of the European Union, a political and economic union bringing together 27 countries. European law stands above local national law for members of the European Union. The EU nations use the €uro currency which is used as the national currency in 19 countries. Before the €uro was established setting pricing for European markets was a nightmare, as local currency fluctuations made it exceedingly difficult to fix a price that worked across markets. This was further complicated by one of the primary treaties of the European Union – namely The Treaty of Rome which legislated for free movement of goods across the zone.

Practically speaking The Treaty of Rome causes a lot of problems for those trying to patch together a network of distributors across Europe, as it is all too easy for them to effectively ‘steal each other’s lunches’ by selling into customers in each other’s markets. When talking to potential new distributors in one European country one of the first question’s they will ask is who is distributing for you in the other markets – because from this they can work out how big a challenge they will have with cross border shipments. The massive growth in Amazon’s power in the market has exacerbated this, with Amazon being a major opportunity as well as a major challenge for efficiently running a Europe wide business.

One of the most effective ways to enter the European toy markets is to work with distributors. There are sales reps in Europe, but they tend to work in only one or two countries at a time, and with each country having various differences in culture, law and distribution channels there is a lot of complication involved in trying to sell via reps across the whole of Europe. Distributors take away a lot of the workload, but on the flip side also take away margin from your bottom line!

There are some extremely valuable trade shows in Europe. Firstly, Spielwarenmesse, the biggest toy trade show in the world is held in Nuremberg, Germany at the end of January every year (in normal circumstances): www.spielwarenmesse.de. This massive trade show features nearly 3,000 toy companies from all around the world. There is no better place to get an idea of the European toy market and to seek commercial opportunities. In addition, Distoy takes place in London, England every May (again under normal circumstances), this less well-known show is a show specifically for toy distributors, and with over 400 exhibitors much business is done here: www.Distoy.com. There are also national shows in other markets in Europe, which may be of interest to attend if you are particularly focused on that country. But overall, if you had to attend one trade show to maximise access to the European market it would be Spielwarenmesse.

The biggest toy retailers in Europe (in no particular order) include: Smyths Toys/Toys R Us, Carrefour, Auchan, Argos, Amazon (of course!) and there are thousands of independent toy stores across Europe.

By far the biggest toy markets in Europe are the UK, France & Germany. Even within these 3 markets there is a massive disparity in terms of products, culture and retail structure, as well as 3 different national languages. The UK tends towards more licensed toys, having one of the highest market shares in the world for licensed toys, whereas Germany has one of the lowest market shares for licensed toys in the world. The UK and France toy buying structures tend to be centralised with a central buying team, whereas Germany is very fragmented and buying (or at least replenishment) is often more localised.

Warehousing can be a challenge also in Europe. Many companies will have just one central warehouse, often in Belgium or the Netherlands. Brexit has complicated the logistic situation somewhat (damn we knew we had to mention Brexit at some point!), because there are new rules & restrictions on trading between European Union countries and the now ex-EU country of Britain.

Compliance and safety regulations are demanding in Europe. Whereas the USA has ASTM standards, the European Union has EN71, a massive set of restrictions and mandatories that even teams of experts often can’t easily understand! Going forward the UK will have its own (different) standards. We highly recommend specialist expert help in the area of compliance for Europe for toy companies!

The final complication we are going to mention here is that of trying to supply your products in the right language versions, but with as much efficiency as possible. The more countries you can ship the same product version to the better and more efficient your inventory control will be. For some products this is less of an issue, for instance, basic plush might only need a label with brand name and a few other company details which can be shipped right across Europe. For other categories though things can get more complex, board games for instance are often language-based products with significant ‘content’ on cards which is integral to the play experience. This means that often different language versions are needed for each new country. With time though you learn that some countries will need dual or even tri-language packaging. In some cases (most notably Eastern Europe) there might be the need for a dozen or more languages to be somehow included in the product. Sometimes things can be simplified though, for instance in Scandinavia the level of English spoken is so good that sometimes board games companies can get away with supplying English language product with local legal lines & instructions, normally though this risks reducing the amount of sales achieved, so there is a trade off to be made for simplification.

So overall, there are many challenges involved in selling across Europe, but it is also a strong and vibrant toy market, with many great people working in it, and with consumers who love toys and see them as an integral part of childhood.


Our team has been working across the European toy and game market since the end of the last millennium. We have sold products into every country in Europe, and regularly help toy & game companies access the European toy market. For more information on our Consultancy services: www.KidsBrandInsight.com/services

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How To Secure Toy & Game Distribution Across Europe

In the last article in this series we looked at how to secure distribution into North America. This time we’re looking at Europe.

The start point in looking at Europe is that despite the existence of the European Union (which makes things much easier for trading across the continent), you are looking at more than 40 countries, each with it’s own culture, history, retail market and regulatory framework. Europe adds up to roughly around the same market value as the U.S.A., but that large market comes in many bits and pieces in Europe!

The three biggest markets (by quite a long way) are the UK, France & Germany. Depending on which published figures you believe, these 3 markets make up around 50% (give or take a bit) of the European toy market.

Followers of the ’80-20′ rule could be forgiven for thinking they will just focus on these 3 markets & take 50% of the potential opportunity. The challenge though is that these 3 markets alone are actually really quite different from each other, and so it isn’t always possible to use the same strategy in all three:

UK Toy & Games Market: The UK is one of the most license driven toy markets. Movie related toys have always been a big thing, as are ‘TV’ properties and even YouTube content/personality licenses these days. In distribution terms, the market has a strong mass market channel with generalist retailers like Argos & grocers like Tesco, Asda & Sainsburys having good market share. Online has been strong for a long time in the UK, with Amazon leading the market. The toy specialist retail channel in the UK is also strong, with Smyths & The Entertainer achieving ongoing success, which looks set to continue as they take advantage of the gap left in the market by the disappearance of Toys R Us from the UK market. The ‘independent’ toy retail sector in the UK is comparatively small, which means that 5 or 6 retailers can still drive the majority of the opportunity, so most companies approach the UK market either via distributors, sales agents or via setting up their own subsidiary & sales team.

Germany Toy & Games Market – the German toy & games market is quite different from the UK. Overall it is far less license driven, with an emphasis on higher quality components/materials i.e. overall less plastic! And if the toy is still plastic it is more likely to be of higher quality plastic. The parenting culture is strong and German parents tend to be very responsible & interested in the development of their children, especially versus the U.K. Therefore product categories such as board games, construction toys, learning toys are all comparatively strong in Germany. The retail market in Germany is quite fragmented, with thousands of independent toy stores, and a number of retail chains who are important but not dominant players. Germany has long been one of the most internet savvy markets in Europe, as such online channels including Amazon (of course!) are strong. Germany would be a harder market to set up your own distribution due to the fragmented market & store by store of some key retailers/channels in Germany. Therefore distributors would normally be the chosen path to market in Germany.

France Toy & Games Market – France is a strong toy market, but with some distinct local differences. For instance, France has a content production ecosystem of its own, along with long standing comic culture which means that while licensed toys are fairly strong in France, some are based on licenses from France’s own entertainment content. The retail market has 3 key channels: hypermarkets or ‘hypermarché’ inc. Carrefour, Auchan & Leclerc. These retail behemoths have less market share now than in the past but they are still significant. They are known for running massive toy promotions in the last part of the year. While the toy ranges may be small throughout Q1-Q3, they tend to expand significantly in Q4 with aggressive pricing to match. The toy specialist retail channel in France is long established but has had some issues in the past few years as key players ran into financial difficulty. Again the online channel is established in France and as elsewhere is an increasingly significant contributor to the market. France has some strong distributors, as well as the usual network of sales agents/reps. Setting up your own subsidiary can be risky as hiring staff in France is comparatively easy, but firing staff in France is difficult and costly because of local employment laws.

CONCLUSION – in summary, Europe represents a significant opportunity for toy & game companies to expand their distribution. Bear in mind though that despite the helpful presence of the European Union, it is not one uniform market place. Product culture varies from market to market, as does the retail landscape. A winning strategy for European toy & games distribution is to allow for local differences in your plans!

If you are interested in selling into European toy & game markets we offer a Consultancy service to toy and board game companies across the world (past clients have come from countries as diverse as the USA, Australia, India, China, Bulgaria, Korea etc). Our brand, product and export sales management service allows us to get deep underneath the skin of toy companies and to help them sell more into North America & elsewhere both via effective selling using our extensive toy industry connections, but also by helping them to correctly align their brands and products to the market. We offer this service with a limited capacity with a maximum of 5 spaces at any one time. At the time of writing, we have only 1 space left heading into toy fair season. To find out more about working with us on this service & to get our help to grow your business please just drop us a line or visit here for more details: www.KidsBrandInsight.com/services/