As I explore in Euromonitor International's new global briefing "Toys and Games in Emerging Markets: Consumer Fundamentals Falling into Place", emerging economies already account for a considerable share of the global toy market, and will provide the strongest boost to global toy and games sales between 2012 and 2017. Latin America has been one of the fastest growing toys and games market globally, while in a few short years Asia Pacific is projected to become the largest toys market, overtaking both North America and Western Europe. Hence, all major global toys manufacturers are increasingly seeking ways to enter and expand their presence in these markets. The strategies they adopt now will determine their success in coming years.
Disposable income is more important for toys
Nine of the world’s top 10 countries in terms of child population are emerging economies. However, it is the rise in disposable incomes in emerging economies that is contributing most to market size gains.
Latin America among the most dynamic regions in toys and games in 2012
Sales of traditional toys and games in Latin America exceeded US$10 billion for the first time in 2012. Brazil is projected to become the fourth biggest traditional toys market globally by 2017, overtaking both France and the UK along the way. In video games, Mexico accounted for almost 36% of the region’s sales in 2012
Asia Pacific is set to become the largest traditional toys market
In just a few short years, Asia Pacific is forecast to surpass North America, becoming the largest traditional toy market by 2014, accounting for 26% of global sales by 2017. In 2012, China became the second largest traditional toys and games market globally, overtaking Japan. The region is also the digital gaming market capital of the world, accounting for 42% of global sales in 2012.
Eastern Europe – Russia is the country to target
Over 62% of Eastern Europe’s projected growth in overall toys and games is forecast to come from Russia, equating to more than US$1.2 billion, making it the most attractive regional market.
Traditional toy stores remains as the key channel
Although internet retailing is one of the most dynamic sales channels, it represented just a fraction of toys distribution in almost all emerging markets, accounting for less than 10% of traditional toys and games sales in all but two markets.
The right category and price could determine success
Pre-school is generally the category to aim for when considering emerging market expansion. A carefully implemented pricing strategy is also one of they key areas to focus on, as most of these markets are still price sensitive.