Toys and games in Russia remains dynamic
Toys and games in Russia continued to record fast retail value sales growth in 2012, though more moderate development is expected in the short term. The launches of new software and hardware and the increasing penetration of broadband internet resulted in very strong sales results for video games. Traditional toys and games also generated double-digit retail value sales growth, though a slowdown is anticipated in the forecast period. The year-on-year improvement in the demographic situation is pushing the demand for toys and games. Branded products by international players attract the biggest audience. Licensing adaption and marketing investment have increased the interest in toys and games among Russian parents.
The baby boom and higher spending spur development
The baby boom, following the government’s 2007 birth stimulation programme, is ongoing. The growing population of young children provides fertile ground for the demand for traditional toys and games. Stable economic conditions have encouraged higher expenditure on children. Moreover, rising health and safety concerns have seen parents shift to branded and easily recognisable toys. Finally, the ongoing tendency of children to age faster has boosted the demand for high-tech, educational toys and games. Thus games and puzzles, scientific/educational toys and arts and crafts are developing fast. Construction toys have also remained among the best-selling traditional toys and games in Russia.
Regional expansion of retailing supports the development of toys and games
While the affluent consumer base, which supports high-priced toys, is concentrated in central Russia, the development of toys and games is also aided by consumers in other regions. After years of a deficit in branded products, even consumers in more remote areas aspire to buy and play Monopoly, Barbie and Lego. The potential of Russian regions is being tapped into by the main retail chains specialising in children’s goods. The rapid development of Detskiy Mir and Begemot/Begemotik is possible because of their penetration of new cities. This has resulted in the growth of modern retailing and shrinkage of traditional formats such as kiosks and open markets. Nonetheless, “other” non-grocery retailers continued to account for a strong share of retail value sales, despite often poor quality products and a lack of promotion, largely because of the absence of alternatives and significantly lower prices.
Parents seek educational toys while children prefer licensed products
Russians have always paid high attention to the education of their children. However as the economy improves and incomes grow, the purchase of educational products is more affordable. Thus children are receiving such toys and games at an earlier age. Moreover, increasingly hectic lifestyles are making early education essential for a child’s development. This is supported by the fast growth in technologies and children’s environment, which require constant updates in a child’s knowledge. Thus the worldwide concept of children getting older at a younger age is apparent in Russia. These conditions stimulate parents to pay more attention to the educational possibilities of the toys their children play with. The aspiration to raise little Einsteins correlates with the demand for educational toys and leads to fast sales growth.
Future opportunities for toys and games in Russia
Toys and games in Russia has not reached maturity; therefore, the prospects for further development are bright. The key trends have already been adopted by Muscovites, but they have yet to reach more remote areas. The expenditure on toys and games in Russia is still far below that of Western European markets, which are usually taken as the benchmark. Thus further improving economic conditions, changing consumption habits and better standards of living will support high growth rates in toys and games in Russia. The development of broadband internet and the increasing number of smartphone users, in addition to the formation of coherent digital data legislation, will boost video games. Moreover, the government has set-out a strategy for the development of children’s goods up to 2020. This will enhance the provision and sales of safe and qualitative toys, making them more accessible. The strategy is also aimed at enhancing the sales and shares of local manufacturers. The government’s attention to children’s goods is likely to have a positive impact on the development of toys and games in Russia.
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