Tag Archives: global toy industry

Global Toy Industry: SWOT Analysis 2020-2025

These are interesting times for the global toy industry. In an industry which has over time proved to be remarkably resilient, there are arguably more threats and risks in the vicinity than at any other time in modern history.

The following SWOT analysis takes a holistic view of the medium term outlook for the toy business globally. The following toy market analysis has been conducted by toy experts who are actively involved in the business, this is not an academic exercise from our perspective:


The last decade or so since the global financial crisis has seen significant growth for the global toy business. The innate need of children to play, and the ongoing desire for parents to develop, educate, entertain, occupy and reward their children are the fundamental pillars of demand for toy products.

The industry has a wide range of companies of varying sizes, from multi $billion global companies with iconic brands through to a vibrant start up scene. Therefore there are sufficient existing toy companies to ensure broad consumer choice as well as to take advantage of opportunities of all sizes.

There are a broad number of retail access points where consumers can purchase toy products. This includes both physical retail and online retail. In all major markets, a multitude of distribution opportunities abound.

There is a large capacity and capability for developing new toys, both from a creative standpoint between in house designers and toy inventors and from a production and engineering standpoint between the in house resources of toy companies and those working in the factories that produce toys.

There are also many certified, experienced toy factories offering toy production at commercially viable pricing, albeit primarily in China.

From a marketing perspective there are a number of global, regional and local marketing platforms offering cost effective marketing solutions for toy companies looking for marketing opportunities for their products.

There is a plethora of kids entertainment brands for toy companies to produce toys around, alongside this there are a number of major entertainment brand licensors actively pushing toy licensing opportunities and an ongoing move slate offering major global entertainment events around which to launch new toys. Licensing remains a major part of the global toy industry.

The toy industry is not far from being a $100bn category globally, with a large number of globally iconic brands which look certain to stand the test of time, in short the strengths of the global toy industry are many.


The toy industry is arguably over reliant on a never ending cycle of product development. Each year in the region of 2/3rds of all toy products on shelf are ‘new’ in some way, yet this 2/3rds of all products only accounts for 1/3rd (approximately) of total sales. In other words, the same old products which were on sale the year before account forthe vast majority of sales. Therefore an inherent weakness of the global toy industry is the huge investment of focus, money and resources on products which deliver a minority of sales.

The development and selling cycle for toys tends to be quite slow e.g. between 10-24 months, which means it can be an industry which is slow to react sometimes. Certainly forecasting is notoriously difficult, with either too much stock or too little stock being common place when a toy performs better or worse than predicted. (For more on the difficulty of accurate forecasting, check out this interview conducted by the BBC in London back in 2014 where our CEO Steve Reece explains why there was such a shortage of toys for the surprise hit ‘Frozen’) https://www.bbc.co.uk/programmes/p022bk27

Toy companies and toy retailers are very reliant on stock to sell, and as such the business is inherently risky as a large proportion of annual turnover can be held in stock which can be dependent on a comparatively narrow selling window (toys sell disproportionately higher amounts during peak season from late October to mid December).


Toy demand is increasing globally. Strong opportunities exist in the fast developing economies of Asia, especially China and India, which have traditionally and historically been of lesser importance but are now offering major growth opportunity for the toy industry. These two markets look likely to see annual double figure growth for the foreseeable future. Major toy companies are investing heavily in these markets to position themselves for future growth and market share.

We see an ongoing opportunity in terms of increasing need and demand for toys as the trend to device obsession continues. Parents are increasingly seeing toys as a vehicle towards prying tablets and phones from the hard gripping hands of their children.

The toy industry has opportunity to reduce manufacturing costs and therefore profitability by moving some toy production from China where wages have been rising for some time to other Asian countries where wages are significantly lower e.g. India and Vietnam. (For more on the Indian toy manufacturing scene, we run a venture in this space) https://www.toyteamindia.com/


We see 2 major threats to the global toy industry at this point:

Firstly, we’re starting to see a consumer backlash to excessive and needless plastic consumption and waste, which in turn has lead to polluted oceans and other environmental damage. This backlash is in the early stages, but we see the risk of a future threat to demand for toys since somewhere between 80-90% of all toys sold are either entirely made of plastic or contain a significant amount of plastic. We see this as a major short to medium term threat, although longer term we expect other materials to come to the fore to lessen the risk for the toy business. We also expect toy companies to get better at utilising other existing materials over time.

Secondly, we see the over reliance on China as a toy manufacturing hub as a threat, as it is not easy to move the vast majority of production capacity in a hurry. This has been exacerbated by the Trump-China tariff situation. Some major companies have been strategically relocating production for some years, but as the top 10 toy companies account for only around a quarter of the total market, the risk is that the thousands of smaller companies who make up the bulk of the market fail to relocate in time to avoid cost inflation as China’s economy develops further leading to even higher wages and labour shortages. This could lead to price rises, supply shortages and lost revenues for the global toy industry.

At the time of writing (Sept 2019), we appear to be heading towards a cooling off of the global economy caused by a number of factors, lessening consumer demand, uncertainty over Brexit, the USA-China tariff spat and other factors. However, we don’t see this as a major risk to the global toy market because the toy category has proven itself to be recession resistant during previous economic downturns.

An additional complication/change factor affecting the toy business is the ever changing face of retail. Over time we have seen a big shift from physical to online retail, with Amazon becoming a major global player in the toy category. Yet the toy market has adapted comparatively easily to this change, and we expect to see this trend continue. The bigger risk we see is an over reliance on a limited number of mass market retailers in the bigger markets. As per the failure of Toys R Us in the USA previously, any issues with a major national retailer in a major toy market can have a very disruptive effect on the toy market around the world. We don’t see any issues on the immediate horizon, but post Toys R Us we would be amiss not to mention this risk factor.


While there are many change factors ongoing affecting the global toy industry we are optimistic about demand in the short and medium term.

This article is written by Steve Reece & the team from Kids Brand Insight, a world leading toy business consultancy offering the following services:

  • Toy Business Consultancy
  • Export Sales Consultancy
  • Sourcing Consultancy (India & China)

For more information on Kids Brand Insight/our services, please visit our website here: http://www.kidsbrandinsight.com/services/



Around about this time of year toy companies begin to have a fairly clear idea (+/-10%) of how 2018 is going to pan out financially. Some will be right now readying the red pen next to their org charts as 2018 pans out tougher than anticipated. Some will be fighting desperately to avoid getting carried away with a runaway success of a year (batten down the hatches – can next year possibly be as good?). Most will be somewhere in between the two extremes of success and lack of success.

So what is the outlook from this mid year vantage point for the toy industry as a whole? Well, there are numerous trends & activities to identify:

Global toy industry set to grow a few percentage points in 2018 – our analysis suggests a single figure growth position for the global toy market in 2018.

Licensed toys are set for yet another successful year – as Hollywood continues to churn out multiple (dare I say countless!) blockbuster toyetic movies, this year seems set to continue the trend. The fact that the toy industry has seen significant growth in the last few years appears to be primarily due to fantastically consistent and frequent franchise management on behalf of Hollywood. 2018 is (at the time of writing) slated to be another strong year, and 2019 is if anything looking even better with Toy Story 4 & a Minecraft movie joining the plethora of super heroes of all shapes, types & genders.

These are interesting times among the major global toy companies – I can’t remember a more interesting time in terms of the competitive position & status of our major leading toy companies. Lego has moved from being just a toy company to also being a kids entertainment company – with 2 Lego movies hitting global box offices in 2017 and with much more to come. Hasbro is in an interesting position having been hugely successful with the content ownership strategy of the last ten years or so, the question now though perhaps is what happens next…how do they keep that massive momentum going? Mattel has not had a great few years truth be told, with pressure to modernise corporate strategy, pressures on traditional cash cows like Barbie and a significant depreciation in stock market value – the (comparatively) new CEO Margaret Georgiadis (ex-Google) seems like the right person to help Mattel embrace the 21st century media & online worlds, but we’re yet to see concrete steps in that direction from Mattel. And finally, with regard to Spin Master, what an amazing last few years they have had – and I struggle to see how they won’t continue to grow for the next few years at least – I see their key growwth advantage being acquisitions in the coming years, because Hasbro & Mattel need deals to the value of at least several hundreds of millions of $USD to make a deal substantial. Spin Master can scoop up the next level down of acquisitions at the rate of a few per year with little bid competition and thus continue to grow.

Fidget Spinners likely to fade away (?) – most industry veterans I have spoken to anticipate finger spinners will burn bright and quickly before fading away. Typically such fads die when the major western markets hit school summer vacation season, and the viral/word of mouth effect of the school playground fades away for a few months. We seem to get one of these super fads every couple of years, and for 2017, this was certainly it. I’ve seen various estimates as to the likely total sales value of fidget spinners globally…I’m not going to comment here, as numerous financial companies read these articles & lose speculation is not helpful to such institutions…bit nevertheless bearing in mind the total annual value of the toy market varies (from data source to data source) between around $80-100 billion, the reality is that fidget spinners are unlikely to make that significant an impact on total 2017 toy market value.

Manufacturing diversification = work in progress – as price inflation has been an ongoing issue in China, the heartland of toy manufacturing, the toy industry as a whole has been assessing the various alternatives to China’s huge capacity. Based on my experience in helping toy companies with alternative sourcing, the reality still remains that China dominates global toy production capacity still, and will do for years to come. However, we have seen some of our clients shift a proportion of their toy manufacturing to countries such as India, Vietnam, Thailand etc., and so far we’ve seen our customers save around $4m USD p.a. Peanuts in the grand scheme of things, but not chump change either!

Emerging/non-traditional markets still the focus – for as long as I’ve been in the toy business (since the late ’90s), toy companies have chased the glitzy exotic upside offered by ’emerging’ or non-traditional markets. The reality historically has tended to be that focus on the major western markets has yielded the best results. However, in terms of market growth potential, China, India and other such non-traditional markets are growing at a pace beyond what is likely or even possible in very mature toy markets like the USA, UK & Western Europe.

I’ll be back in a few months time to take a first look at how 2019 is likely to pan out for the global toy market.


by Steve Reece, CEO of Kids Brand Insight www.KidsBrandInsight.com,  a leading Consultancy to toy companies around the world, which helps people & companies to get ahead in the toy industry, find the right toy & game factories and to consumer research test their products with kids and parents.