Toys and games sees a positive performance in 2012
Despite consumers being thriftier with their disposable incomes due to the continuous rise in the cost of living over the review period, toys and games continued to achieve growth in 2012. Within traditional toys and games, action figures and accessories, construction toys and dolls and accessories registered strong performances. The first two categories were boosted by the popularity of licensed characters, whilst the third continued to be girls’ favourite toys, with many new themes and ranges being launched. Nevertheless, video games still saw more notable growth in 2012, due to a series of successful launches, such as the long awaited online game Diablo III, the only video game console by the leading players, PS Vita, and the innovative video games software with figurines which come to life on screen, Skylanders: Giants.
The return of popular toys and games
Probably due to the pessimistic global economic situation, traditional toys manufacturers and video games developers were more conservative and cautious in venturing into new product developments. Instead of taking the risk of investing resources in innovating and building whole new brands and ranges, many major players invested in improving their successful toys and games which were already familiar amongst consumers. Some of the best-selling new versions of toys and games launched in Malaysia included the new high-technology generation of the 14 year-old Furby range, compatible with handheld electronic devices, and Diablo III, which was a sequel to the Diablo video game launched in 1996. Moreover, the Lego brand, established for more than half a century, registered remarkably strong growth in 2012. It launched new product ranges such as Lego Friends, which targets young girls, which is rare amongst other Lego ranges, and coupled with the opening of a Legoland theme park in Malaysia, spurred significant consumer interest.
International players lead toys and games
Traditional toys and games in Malaysia continued to be dominated by international players in 2012; the most successful were Hasbro, Mattel and Lego. As their sales volume are large, Hasbro and Mattel have set up wholly-owned subsidiaries in Malaysia to have better control over the ownership of their products imported into the country. Local manufacturers such as SPM maintained its dominance in games and puzzles while Dooodolls Design continued to be ranked second in plush toys right after Toys “R” Us Inc over the review period. However, the overall market shares of the two local players were still limited, as both were focused on strengthening their foothold in only one category. Furthermore, video games in Malaysia was led by international players such as Sony, Nintendo and Microsoft in 2012, which are capable of injecting resources into continuous product development, whilst domestic players are still in their infancy.
Store-based retailing leads the distribution of toys and games
Store-based retailing was the leading distribution channel for toys and games in Malaysia in 2012. Due to the success of chained hypermarkets in the country, leading retailers such as Tesco and Giant rapidly expanded their presence nationwide, and thus held high shares of distribution. The distribution share of leisure and personal goods specialist retailers continued to rise, as toy specialists such as Toys “R” Us opened more new outlets and renovated many old outlets to target more consumers and achieve higher sales. On the other hand, internet retailing was slowly gaining share, as increasingly information technology-savvy consumers were more confident in making purchases of toys and games online.
Optimistic outlook for toys and games
During the forecast period many generation Y consumers will become parents. As a generation of parents with a high level of education, they are expected to be more knowledgeable about the development of cognitive and motor skills during the earlier stages of children’s life. Thus, they will be more willing to spend on high-quality or premium educational toys, infant toys and pre-school toys for their children. Furthermore, video games and collectible toys such as action figures and accessories and dolls and accessories are anticipated to gain from the higher purchasing power of young adults in the country. With the developing trends mentioned, the growth of toys and games is less likely to be strongly impacted by the imposition of 6% goods and services tax (GST) starting from April 2015, which was proposed in the Malaysia Budget 2014.
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