Imports play a key role in U.K. toy sales.

• Date: 01 October 1995
• Author: Marsh, Frederick
• Published date: 01 October 1995
• Author: Marsh, Frederick

Imports account for a major portion of the United Kingdom's sales of toys and toy components. Characteristics of this large market.

In 1994 the U.K. market for toys was worth around £1.6 billion at retail prices, the equivalent of US$2.56 billion, and imports accounted for £1.08 billion of this ($1.73 billion). Until the mid-1970s toys made and branded in the United Kingdom led sales in this market. Thereafter import penetration calculated on ex-factory and CIF ("cost, insurance and freight") prices increased from 45% to 70%. Since the mid-1980s the import share in this sector has stabilized at around 72%. The main reasons for the high import portion are that the toy industry is highly labour intensive, this sector in the United Kingdom requires heavy investment in new tooling and the toy market is very susceptible to changes in fashion and trends.

During the past few years overall U.K. sales of toys have levelled off. Demand has however increased in certain market segments. One of these for example has been the "electronic learning market." Retail sales of such products rose from £23 million in 1991 to £53 million in 1994, and some traders forecast 1995 sales of £61 million. The overall U.K. toy market is expected to grow somewhat in the coming period in line with general economic growth and a modest increase in the number of children in some age groups.

Developing countries have certain comparative advantages in supplying this market, in terms of lower raw material and labour costs in some cases and production skills relevant to various finished or semi-finished toy articles. Sales possibilities must however be carefully identified and the most appropriate marketing channels used if exports are to develop successfully.

What is a toy?

The European Union's Toy Safety Directive defines a toy as "any product or material designed or clearly intended for use in play by children of less than 14 years of age." This definition is not however always easy to apply. Many articles are considered as toys by some persons, and not by others. For instance, when is a child's tennis racquet a toy, and when is it sports equipment? To take another example, articles that are described as dressing-up toys in the United Kingdom are instead categorized as carnival costumes in Germany. The above-mentioned directive explains that certain products are specifically not classified as toys, such as children's fashion jewellery and collectors' items such as scale models.

Product range

Trade sources state that more that 250,000 different kinds of toys, or in commercial terms "stockkeeping units" (SKUs), exist commercially in the United Kingdom. This means that product groups number literally hundreds. The catalogue for the 1995 British International Toy and Hobby Fair in London classified toys and games under 340 categories. The British Toy and Hobby Association (BTHA) has defined 26 toy product groups. These include: jigsaw puzzles; indoor games; riding vehicles; outdoor play toys; car and train sets; miniature die-cast vehicles; other vehicles; model kits; construction sets; arts and crafts; musical toys; science and education; playhouses; dressing-up toys; adult imitation toys; television and computer games and hardware; radio-controlled toys; other electronic or battery-powered toys or games; dolls and accessories; girls' collectibles; action toys (for instance space figures and soldiers); soft toys; talking toys; activity toys (for example water pistols and string puppets); infant toys; and other toys.

Examples of niches

This broad range illustrates that many niche markets exist of potential interest to suppliers in developing countries.

An example of one such niche is the "dressing up and life-play" market segment, consisting of toys that focus on adult role-playing. Worth £8 million at retail prices annually, it includes play outfits and accessories for traditional professions such as nurses, doctors, police officers and cowboys; for modern characters such as "Batman" and "Disney" figures; and for the latest fashionable personalities of film and television. These outfits are made of durable everyday-wear material and often come with a range of accessories.

Another category that could be of interest to developing countries, for the supply of either components or entire articles, is dolls and accessories. The U.K. market for dolls has been worth £183 million annually at retail prices during the last several years. It has two main sectors: fashion dolls accounting for £68 million, including dolls such as "Barbie," which claims a 46% brand share, and traditional and baby dolls reaching £115 million yearly in sales. Many niches exist within the doll market - for instance baby and girls, ethnic, fashion with accessories, national costumes, paper, porcelain and rag.

Yet another wide and diverse market category of potential interest to foreign suppliers is toy vehicles, worth approximately £180 million a year at retail prices. Within this category miniature vehicles, including scale models, have a 41% share. Many are diecast, while others are of plastic.

A number of other smaller segments also offer potential to developing countries. One example is toys directed at specific ethnic groups. Distinct niche markets exist for...