Toymakers struggle to compete with low-cost imports
London, United Kingdom (PRWEB) February 01, 2013
The Game & Toy Manufacturing industry experienced challenging conditions over the five years through 2012-13, with revenue expected to decline by a compound annual rate of 4.4%. According to IBISWorld industry analyst Iyman Uvais, “trading conditions continued to be affected by foreign-made toys and games, which flooded the domestic market and proved to be tough competition for locally produced goods”. Weak or negative growth in disposable income during the period also negatively affected the industry, as retail demand for games and toys remained constrained, and consumers chose to purchase imported products due to them being relatively cheaper.
Although the real effective exchange rate of the pound declined and made exports more competitive, bleak economic conditions in key export markets resulted in exports declining during the period. This had a significant adverse influence on the industry as exports represent a major portion of industry revenue. Trading conditions across the game and toy manufacturing market were also influenced by growth in the size of the UK population aged one to 14 years, with this age bracket considered a key market for the industry.
Industry revenue is set to contract by 4.7% to £483.8 million in 2012-13. Toy and game manufacturers will continue to experience a weak trading landscape in the United Kingdom due to strong import competition and weak economic conditions continuing to put pressure on spending. Meanwhile, the expected rise in the real effective exchange rate during the year is also expected to put further pressure on exports.
Revenue for toy and game manufacturers will continue to trend downwards over the five years through 2017-18. Uvais adds, “revenue prospects will be hindered by several factors including continued strong competition from foreign-made goods and the forecast appreciation of the real effective exchange rate during the first two years of the five-year period making exports more expensive and imports cheaper”. Annual fluctuations in disposable income and the relative share of the UK population aged 14 years and younger are also expected influence industry performance over five years through 2017-18.
The Game & Toy Manufacturing has a low level of market share concentration with no dominant players. Players such as Mattel, Hasbro and Lego are regarded as key players across the global toy manufacturing market, and while they operate in the United Kingdom, their activities are largely as agents or wholesalers rather than pure manufacturers.
For more information on the Game & Toy Manufacturing industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Operators in this industry manufacture games and toys for professional, arcade or personal use. Businesses source raw materials from a number of different suppliers before transforming them into a range of toy and game products including dolls, action figures, board games, wheeled toys and puzzles. It is important to note that the manufacture of automatic bowling alley equipment, video game consoles and bicycles are excluded from this industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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