PERSPECTIVES: New Toys and Games Research — What Is It Telling Us?

In this Toy News Tuesday Perspectives column, Utku Tansel, global head of toys and games research at Euromonitor International, discusses the group’s latest data on global and regional toy sales trends, as well as the performance of key toy categories. This research was first presented at PlayCon 2014, TIA’s international conference of play professionals, which was attended by 170 toy industry executives this past May in Scottsdale, Arizona.

June 9, 2014 | Euromonitor International’s latest research reveals that 2013 saw the strongest global growth for toys and games of the past five years, with the discrepancy in performance between developed and emerging regions continuing to widen. Value sales of toys and games recorded a relatively flat performance in North America and Western Europe in 2013, affected by continuing economic problems, while global growth was underpinned mainly by Latin America and Eastern Europe.

Traditional toys and games recorded around 4% value growth globally in 2013; construction was the most dynamic category, growing almost 8% in value terms, followed by arts and crafts and preschool, each recording around 6% growth.

Some of our key findings include:

  • Global toys and games sales exceeded US$153 billion in 2013, recording over 4% value growth compared with just under a 2% gain the previous year, thus continuing to defy anemic economic activity. Steady real term growth is expected to continue to 2018.
  • In traditional toys and games, which accounts for over 55% of total toys and games in value terms globally, Latin America and Eastern Europe were among the best performing regions, both recording around 9% value growth in 2013. These regions were followed by Asia Pacific, which enjoyed just under a 7% increase in value sales in 2013, thanks largely to double-digit growth rates posted by India, Indonesia, Thailand, China and South Korea.
  • Construction was the fastest growing category in traditional toys and games for the sixth consecutive year in 2013, posting 8% value growth globally. Since 2007, the category has enjoyed double-digit growth rates thanks largely to the phenomenal performance of LEGO. The popularity of LEGO has proved resistant to any sort of decline and the success of The LEGO Movie will likely mean that 2014 could also be a good year for the company; and with Star Wars coming soon, the future looks pretty bright. In 2013, Mattel, the world’s largest toymaker, acquired Mega Brands, meaning competition is likely to intensify in the coming years in this category.
  • Preschool, which is often seen as a fundamental and staple component of the toys and games industry, was also one of the most dynamic categories, achieving global value growth of around 6% in 2013. Some young children appear to be moving towards digital play and children’s tablets is certainly an area benefiting greatly from this trend, as the market has been flooded with new launches in recent years. As children’s tablets are increasingly beginning to emulate adult tablets in function and design, children enjoy them for their vibrant colors and high level of interactivity while parents recognize their educational value. This even led Toys ‘R’ Us and UK grocery retailer Tesco to release their own children’s tablets over the review period. LeapFrog and VTech are undoubtedly the pioneers in this area and their latest generation products, namely the LeapPad Ultra and InnoTab 3S, continued to drive sales in 2013.
  • In Western Europe, traditional toys and games sales remained static in light of the economic slowdown and declining consumer confidence. Only Turkey and Germany recorded noteworthy growth rates (around 11% and 2% in value terms, respectively) in 2013 in the region. However, these were offset by declining sales in other markets such as the Netherlands, Spain and Italy.
  • In North America, the largest traditional toys and games market globally, value sales of traditional toys and games posted a flat performance in 2013. Over the next five years the region is projected to record around a 0.8% CAGR, translating into US$875 million in additional sales by 2018. The construction and arts and crafts categories are expected to underpin sales in the coming years, contributing some US$480 million combined to overall sales in absolute terms over the next five years.
  • China is forecast to be the world’s growth engine in traditional toys and games over the next five years, adding some US$5 billion to global sales by 2018. Spend per child on traditional toys and games in China was less than US$41 in 2013, compared with US$345 in Japan in the Asia Pacific region, suggesting strong future growth potential.

For further data on sales trends and toy category performance in the Chinese and Brazilian markets, TIA members can access commissioned global market research reports on the Association's website. The reports offer an analysis of business opportunities (e.g., demographics, trends, cultural customs and consumer behavior) as well as business intelligence (e.g., economic indicators, ideal target audiences and retail channels, promotional opportunities, etc.) in order to help companies develop sound market entry strategies for both foreign markets.