PERSPECTIVES:  Projected Growth for RC Category in Developing Toy Markets

Utku Tansel, Head of Toy and Games Research at Euromonitor International, discusses the projected growth of RC toys in emerging markets. 

March 18, 2014 | Nicknamed “RC Rampage” by TIA during its annual toy trends presentation at the 111th American International Toy Fair, the influx of innovative remote control vehicles for various ages and a wide range of price points was one of the key trends noted at the fair, among others.

Radio/remote control toys have been out of the limelight for some time, perhaps being overshadowed by other fast-growing traditional toys and games categories such as construction, pre-school and dolls and accessories. 

Preliminary findings from Euromonitor’s latest research, which will be published in June, indicate that in the U.S., radio/remote control toy sales remained somewhat flat in 2013, more or less in line with the performance of overall traditional toys and games. Globally, radio/remote control toys registered a double-digit CAGR in value terms over 2007-2012 in emerging regions including Latin America and Eastern Europe. However, the category posted just a 2% CAGR in value sales over the same period globally, due partly to disappointing sales in North America and Western Europe, the world’s most developed toy markets.

Radio/Remote Control Toys, Top Performing Markets Globally,  2012-2017,  CAGR, RSP


 

















Source: Euromonitor International

Japanese toy maker Takara Tomy is the largest radio/remote control toy company in the world, accounting for just under 8% of global sales in value terms in 2012, followed by Spin Master and Mattel with shares of around 6% and 5%, respectively.

Sales to be underpinned by emerging markets
Over the next five years, radio/remote control toy sales are expected to be driven by emerging countries, while sales are set to remain flat in developed regions. The United Arab Emirates, China and Brazil are expected to record the strongest growth globally over 2012-2017, all posting double-digit CAGRs in value terms. In absolute terms, China will be by far the most attractive market, projected to add US$356 million to global sales by 2017, accounting for 58% of global growth.

The United Arab Emirates is forecast to be the most dynamic country in radio/remote control toys globally over the next five years, registering more than a 16% CAGR. On the one hand, these products are liked and played with by children and their parents, whilst on the other they encourage children to play outdoors, which is favorably viewed by parents concerned about childhood obesity. Over the review period it was also the best performing category in overall traditional toys and games in the United Arab Emirates and within this the most popular toys were helicopters and special function cars, such as those which can go up walls or drive on both water and land. Licensing has also been a major growth driver.

Brazil is projected to contribute US$66 million to the global sales of radio/remote control toys by 2017, making it the second most dynamic market behind China in absolute terms. The category is benefiting largely from increasing purchasing power among consumers as the upper and middle class in Brazil is projected to grow significantly through 2020.

The Philippines is another interesting market to watch in radio/remote control toys, with a CAGR of 8% anticipated over 2012-2017. It has been one of the top performing categories in the country in recent years, thanks mainly to new product launches and the increasing availability of more affordable brands. In addition, radio/remote control toys have benefited from the growing number of department stores and traditional toys and games stores in the country, thus allowing manufacturers to expand their reach.

Our recent trip to New York confirmed that with the projected flat sales in developed markets and strong growth in emerging economies, radio/remote control toys stands as a stark illustration of the deepening discrepancy in performance between developed and emerging economies in overall toy sales globally.