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World wide, the market for toys is huge and offers immense potential for companies to pursue. But the interests of children who are the primary consumers for toys changing faster than ever, toy manufacturers have to create innovative toys to capture their interest. Also the distribution aspects play a significant role in the success of toy manufacturers. Meeting customer expectations has become difficult and companies have to look out for providing convenience by not only providing access through huge retail chains like Wal-Mart but also through websites which is increasingly gaining prominence as a channel to reach customers world wide.
The global toy industry is a $55 bn big business. It is dominated by two publicly held US toy makers: Mattel (makers of Barbie, Hot Wheels and Fisher-Price toys) with 2001 sales of $4,804 mn and Hasbro (makers of G I Joe, Tonka and Playskool toys) with 2001 sales of $2,856 mn. The other big players in the global toy industry are Japan's Bandai Co. (makers of Digimon toys), Sanrio, and Denmark's LEGO. These companies dominate the industry, as they are able to create cross-culturally appealing brands, and have the muscle to penetrate a large number of countries with a successful product.
US store chains lead the global toy retail market. Wal-Mart Stores is the #1 toy seller, having surpassed #2 Toys "R" Us in 1999. Other leaders are discount stores like K-mart, Target, and KB Toys (the only pure toy retailer in the top ten for, even Toys "R" Us sells children's furniture and apparel). Toy sellers such as FAO (which owns Right Start, Zany Brainy, and FAO Schwarz brands) hold small portions of the market, relying on specialty appeal and exclusive items.
Most toy retailers also have an online presence, although many toy e-tailers, such as e-Toys and even Walt Disney's toysmart.com, did not survive the dot-com fallout. The online toy sellers that remain are linked to bricks-and-mortar retailers. Even toysrus.com, despite its chain-store parent, has grappled with distribution problems, and has teamed up with Amazon.com to take advantage of the online giant's shipping and fulfillment prowess.
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