Toys and Games in Argentina

Growth driven by inflation but lower purchasing power encourages trading down

Toys and games continued to see double-digit current value growth in 2018, mainly driven by rising inflation in the country. However, consumers again faced a loss of purchasing power as a result of inflation and falling employment; therefore, demand for cheaper toys increased.

Discounting, payment currency shift and domestic brands’ push for distribution benefit sales

In 2018, companies and retailers used a number of different strategies to boost sales. For instance, Toy Store offered discounts of up to 40% on traditional toys and games, whilst constant offers and special activities were seen in stores and online.

Latamel maintains lead while domestic player Lionel benefits from offering value

Latamel (Sony) continued to lead overall toys and games in 2018, thanks to its strong lead in video games. Video games is a fragmented category which is led by key multinational companies.

Move towards internet retailing encourages omnichannel focus

Many consumers in Argentina still prefer to visit physical stores, especially when it comes to buying traditional toys and games, as they like to see and touch these products and choose from the different options available. Although the share of internet retailing is much lower in traditional toys and games than in video games, this channel continues to see growth and take share from store-based retailers.

Younger gamers and electronic traditional toys and games to boost sales

Toys and games is expected to continue to see current value growth in the forecast period, with increases seen for both traditional toys and games and video games. Video games is expected to see stronger growth, as children start gaming at a younger age, often starting with games on tablets and mobile phones, and as younger gamers continue playing into adulthood.

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