2016 has been another strong year of toy sales, with the global traditional toy market expected to grow by over 3% in constant value to reach USD83 billion in the year. The year saw the rise of collectables, a recovery in the emerging toy market, continued growth of STEAM toys, and licensed toys found more competition without the looming shadow of the Star Wars franchise. These trends all had different factors behind them and are expected to carry on and evolve in different ways in 2017 and collectively will help keep the year growing at the same level of 3% constant value growth, with the market reaching just over USD85 billion.
Source: Euromonitor International
Collectables become key selling point
Collectable toys were a major seller in 2016, with brands like Shopkins and Hatchimals benefitting greatly from this. These toys not only rely on having a large collection of toy types for children to collect, but also a random payoff element where children do not know which toy type they will get with each purchase. This helps to encourage repeat purchases and allows toy makers to keep children interested by releasing new products to collect. Given the success of brands in this space, it is very likely that more toy companies will want to enter this random payoff model of toy selling, possibly releasing products as brand extensions of existing popular lines.
Emerging markets begin to recover
Emerging markets were negatively impacted by macroeconomic volatility and a strengthening US dollar in 2015. As 2016 found a greater level of stability, emerging market toy sales are expected to be healthier, growing by 4% in constant value to reach USD28 billion. 2017 is likely to continue this trend of economic stabilisation, with emerging markets expected to gain momentum and grow by 5% in the year. China will once again be a leader in absolute value growth for emerging markets, and will be bolstered, albeit moderately, by the formation of multi-child middle-income households following the end of the one child policy in 2015.
STEAM still a parental focus
In 2016, science, technology, engineering, arts, and mathematics (STEAM) toys were still very much a focal point for parents. STEAM sales grew in the year by 4% in constant value to reach sales of over USD30 billion. Parental investment in STEAM products could grow even more in 2017 due to the large number of enticing computer programing educational toy products being released into the market. As many new jobs continue to focus on computer proficiency, many parents are increasingly focusing on educating their children early in this area.
Licensing moves beyond Star Wars
In 2016 licensing in the earlier part of the year was impacted by spill over sales of Star Wars merchandise, but by the end of the year the focus was on a greater variety of licenses. New movies, like Trolls, and the resurgence of popularity of the Pokémon brand created greater licensing competition even with the release of a Rogue One: A Star Wars Story. In 2017, however, with another movie release in the core Star Wars franchise of films, it is possible the brand could once again eclipse its competitors.