Toys form a very essential part of children's growing up and may sound like a farfetched idea, but they are the first representation of the world in a miniature artificial world and its objects, which form the thought process of kids. As childhood changed and evolved over time, so have the toys and their nature and features. However, the role of toys for children remained the same-make childhood more memorable and aid in the growing up process of kids.
From Hamley’s first store in Holborn, London in the 1760s to now a widespread global market worth USD 113 Billion, the global toy market has come a long way by manoeuvring itself through changing social, economic, technological, and environmental landscapes. The toy market globally intersects with various other industries like the media and entertainment industry, education industry, plastic industry, video game industry, etc. Some create opportunities and trends for the toy market to ride on, and some create threats and challenges for the market and force the companies to reinvent themselves. Based on these factors, the market is anticipated to grow with more than 6% CAGR for 2022-2027.
Toy companies globally are facing intense competition from the video game industries, as consumers are shifting and adapting to the use of video games and e-sports very early on. In the last half a decade, the video gaming and e-sports industries have grown exponentially by making games and consoles to support them easily available on the market. This has created a threat to an entire category in the toy market focused on older children. At the same time, video games and their series have the potential to give rise to new fictional and gaming characters, which can create a cult, and the action figures segment of the toy market adjusts itself to accommodate such trends, creating impetus for its growth.
There have also been changes in the toy categories for 9–15 year olds, which account for roughly 50% of the toy market, as well as the 0–8 year old category. During the review period, Actual Market Research also discovered a trend of parents gravitating toward educational and interactive toys to help their children develop mental functioning by stimulating and enhancing motor development, increasing intelligence quotient, and instilling creativity and imagination. An inclination towards STEAM and STEM-oriented toys is creating fresh demands among parents as well as schools to use these toys to aid the learning process of kids. Toys were used for educational purposes even during early periods of the toy industry, but the category had not received enough focus due to the emergence of new innovative categories in the toy market in the last few decades. This new wave of increasing demand for toys is creating new opportunities for toy companies to expand their product lines. We can already see some well-established companies such as LEGO Education, littleBits, LeapFrog, etc., already venturing into this newly developed space. This is also creating fresh opportunities for Ed-Tech start-ups to leverage their technological backing to develop the sector. However, it remains to be seen whether the toy companies and technology companies will collaborate or compete in this category.
There has also been growing movement among the consumers about environmental and climate change and sustainability. As more and more consumers are getting aware about this shared human goal, changing consumer behaviour trends can be observed in other markets where use of plastic is an essential part of manufacturing and production. About more that 99% of the toys globally are made from plastic, and a negative consumer sentiment in purchasing such toys can severely hamper the growth prospects of the market. More eco-friendly ways of production by using reusable plastic, recycled plastic, wood and other fabrics are expected to be used for production of toys to maintain the sustainable practices of economic growth as well as reducing environmental threats.