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2013
Case study
Jot – toy case
Industry background
There is a large number of companies of various sizes which design and sell toys to retailers
globally. Most toy companies outsource the manufacture of their toys and currently 86% of the
world’s toys are manufactured in China. Most of the rest of the world’s toys are manufactured in
other Asian countries, with only low volumes of products manufactured in Europe and the USA.
The toy market is divided up into a variety of sectors, by children’s age range and the type of
toy. There are different sectors with toys aimed for babies under one year old, children aged 1 to
3 years and pre-school children of 3 to 5 years. There is a further sector for children of school
age of 5 years and upwards. Additionally the toy market is broken down into categories of toys.
Research has shown that children aged 2 to 4 years old receive the most toys in quantity but
that the most money is spent on toys for the 6 to 8 year age group.
The current trend in toy sales is towards electronic toys and computer assisted learning. Many
of these electronic toys are highly developed to be attractive to children. Sales of traditional toys
and games have achieved relatively low growth in the European market over the last 10 years,
whereas electronic toys and merchandise from popular films and TV programmes have seen
reasonable growth. Merchandise from films and TV programmes are licensed to toy
manufacturers or toy retailers which can achieve high short-term profits depending on the
licensing arrangement and the volume of sales. However, fashion trends are difficult to predict
and toy retailers can be left with large volumes of unsold inventories if the toys are unpopular or
less in demand than originally anticipated.
The toy market is highly seasonal and is dominated by the pre-Christmas sales period.
Typically, around 30% to 55% of
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