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Playworld: toys make their way in Middle East

Although considered a difficult market, the region offers oportunities for toy companies

  • Key4Communications
30/03/2011

Toy multinationals want a piece of the Middle East Market, and they have plenty of reasons: the Arabic peninsula is a young market, with a high spending power and with a very important commercial sector.

Epoc Messe Frankfurt organized in Dubai the first edition of Playworld Middle East, a fair held between the 7th and 9th of March that helped to reinforce the commercial bonds between the region and the toy world manufacturers. The event was organized together with Paperworld, focused on stationery. Both fairs gathered 6,246 visitors, 45% of them from outside the UAE, and 46 exhibitors from 20 different countries, most of them from Asia.

One of the initiatives promoted by the fair was the creation of a regional GCC Toy Trade Association, that embraced the new toy security rules issued by the Gulf Standardisation Organisation (GSO) that will be enforced in June 2011. This rules are mainly focused on toxic and dangerous materials.

A difficult market
This event was a first sep in order to strengthen the entry of the global industry in a region “which can be traditionally difficult to penetrate”, in words of Ahmed Pauwels, CEO of Epoc Messe Frankfurt. Besides these traditional difficulties, one also has to take into account the political and social instabilities experienced in North Africa and Middle East since the beginning of 2011.

But these markets are also inviting. The United Arab Emirates GDP per capita is the third largest in the world, only behind Luxemburg and Macao, and in front of Norway (4th) and the USA (6th). Bahrein is 22nd, Oman and Saudi Arabia are 35th and 37th. Spain is 23rd.

Toys demand follows the global trend of moderate growths expected for the next years. In 2012, global toy sales should increase 5%, up to a total amount of $122,2 billion. After China and India, the Gulf countries are the third toy market in Asia, a continent that could become in a handful of years the first world market, displacing North America and Europe. 

Population is also expected to rise: 33% in the next 12 years. This will also mean a growth in young and juvenile population: the 26,14% of people from these countries will be under 14 in 2020. In fact, population in Bahrein shows already this percentage of young people, which is surpassed in Oman and Saudi Arabia. The current number in the EU is 16%, and in the USA, 20%.

Some toy trends
Another particularity of the regional market is the increase in sales of outdoor playground equipment. A large number of families are leaving cities and moving into self-contained communities, and there is also a growing interest in welfare of children and the promotion of their exercise. This follows a global trend, as published in a study by the Association of Play Industries, but it is even more pronounced here because of the better weather compared to other countries. All this means more sales of equipment such as slides and swings. 

And bicycles. The bike industry is expected to register revenues of $77,7 million worldwide in 2015, given its use not only by kids and sport lovers, but also because of its increasing use as an alternative mode of transportation in cities. Middle East is not an exception: Dubai itself is starting to introduce bicycle paths.

Another regional trend is that in spite of globalisation and the presence of Western products and brands, “there is definitely a trend towards more regionally adapted toys”, as Monica Kubik, Playworld Middle East Manager, explained. For example, the Lebanon based company Edu Fun sells a board game that teaches Islamic rules. Also, Simba Toys Middle East manufactures Jamil and Jamila, dolls that wear traditional regional clothes.

Immigration and commerce
Nevertheless, all the Gulf region countries can’t be treated as an indivisible block. For example, Oman and Saudi Arabia have an immigrant population of around 20%, mostly Asian labourers (Pakistan, India, Bangladesh) that work in oil wells. These two countries are also ruled by very strict and closed monarchies, even compared to the rest of the region countries –these are not near anything similar to a democracy, but they are open to business and trade. In fact and for example, in the UAE, the percentage of resident aliens is 80% (in Qatar, 70%; in Kuwait, 63%, and in Bahrein, 38%; as compared to a 12% in Spain).

There are also differences concerning shopping centres and consumer behaviour. It’s true that the region shops are dominated by the presence and importance of malls (due mostly to the heat), but undoubtedly the UAE and especially Dubai are the commercial centre of the GCC. With a little more of 10% of population (4.5 million people), the Emirates have the 36,5% of commercial floor. Dubai also holds every year since 1996 the Dubai Shopping Festival, a fair dedicated to shopping and open to the general public. 2,300 retailers from all fields were present in the last edition. Also, the Dubai Mall is located in this Emirate. This is the largest shopping mall in the world, with 2,300 different stores, 1,000 more than for example Diagonal Mar, the largest in Barcelona.

It is quite clear that the Emirates want to become a trade and business world centre, as oil reserves from the country will eventually be exhausted. According to the most pessimistic analysts, this could happen in 20 years.
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