Utku Tansel, Head of Toys and Games at Euromonitor, presented the “Toys and Games: Global Trends, Developments and Prospects” address at Hong Kong Toys Fair and Conference over 12-15 January, highlighting some of the major macro drivers affecting toys and games sales globally, including economic and demographic trends. He also showcased the findings from Euromonitor International’s global research focusing on the performance of traditional toys and games, video games and digital gaming in key markets worldwide, providing data as well as commentary. Furthermore, his keynote speech featured the most recent fundamental developments affecting toys and games’ distribution worldwide.
% Penetration of Electronics, Traditional Toys and Games, Rsp, Selected Markets
Source: Euromonitor International
The 41st edition of the fair included various themed zones, ranging from educational toys and games, electronic and radio/remote control toys, festive and party items, and outdoor and sports toys to toy packaging, smart-tech toys, plush toys, dolls and video games. The show also featured a Kidult World, exhibiting hobby goods, vehicles, mechanical toys and action figures.
One of the main trends to emerge at the show, which is organised by the Hong Kong Trade Development Council (HKTDC) and is the largest toy industry event in Asia Pacific, was the rise of technology in toys. The popular smart-tech toys zone brought together innovative toys combining traditional elements with smart technology, including mobile apps. Euromonitor International’s latest global research also confirms that across almost all markets traditional toys and games with electronics components are on the rise, changing the face of the industry. The increasing penetration and usage of tablets and smartphones, the rising popularity of children’s tablets, as well as manufacturers’ growing enthusiasm for technologically app-enhanced toys in recent years, are stimulating this trend.
Penetration of electronics in traditional toys and games: Selected country insights
The fact that smartphones and tablets are increasingly being used by children at a younger age is having a negative impact on demand for traditional toys and games. Parents are more comfortable allowing children to play on their electronic devices and while this has positive benefits for the purposes of educational development and learning, health experts claim spending excessive amounts of time on smartphones or tablets could have a negative impact on childhood development. To keep up with current trends, some toys and games manufacturers are developing e-connected toys which feature an integrated iPhone or iPad application, such as Hasbro’s electronic owl-shaped toy, Furby Boom, Nerf’s Lazer Tag and Fisher-Prices’ Apptivity branded toys.
The breakdown of electronic and non-electronic toys in 2013 was 27% and 73% respectively. The share of electronic toys gradually increased over the review period as technology is becoming more advanced and manufacturers are attempting to compete with electronic gadgets. To capitalise on the growth of smartphones and tablets, Fisher-Price and Vtech have launched their own version of a children’s tablet lately.
The value share of electronic toys increased to reach 21% of traditional toys and games in China in 2013. Electronic toys are preferred by an increasing number of parents as they feature both amusement and educational functions. Infant (19-36 months), pre-school (3-4-year-old) and scientific/educational toys are among the categories that feature more electronic toys than any other. However, manufacturing companies in plush toys and dolls and accessories have responded particularly well to introducing products containing electronic parts to amuse or to educate children, because the friendly appearance of plush toys or dolls can keep children interested while learning.
Electronic traditional toys and games, which are often priced significantly higher than their non-electronic counterparts, grew to hold a 23% share of value sales during 2013, due to the rising popularity of electronic features among children. The biggest threat to traditional toys and games remains video games. Brands usually use electronic features in traditional toys in order to achieve a better position when competing with video games in the Turkish market. The trend is also geared towards electronic board games, which include brands such as Monopoly Crazy Cash from Hasbro Turkiye.
Electronic toys, which held a 26% value share in 2013 in the US, continued to make inroads within traditional toys and games, once again due to the growing influence of children’s tablets. These tablets, which include products such as Nabi, Innotab and LeapPad, have swiftly become must-have products for many children. In addition, manufacturers in many other areas, such as scientific toys, are making use of electronic components to help make their products more stimulating and engaging.
Importance of technology to reach new heights
Hong Kong Toys Fair confirmed that the penetration of electronics and toys operated by mobile apps in traditional toys and games is not limited to certain and perhaps rather expected categories such as radio/remote controlled toys as well as many pre-school toys. As well as these areas, the show also exhibited a number of app-enhanced toys from a wide range of categories, including plush toys to dolls and even construction toys. This trend could also potentially spill into other categories such as arts and crafts and outdoor and sports toys, which have historically been known for low penetration of electronics, in the near future.
The developments in the overall play industry in recent years imply that technology’s vital importance in traditional toys and games will continue to rise. With the rising popularity of tablets and smartphones, the technology is fast becoming an inseparable part of our everyday life and no business is immune to this trend. Toy manufacturers should follow the trends in electronics even more closely in years to come.