Traditional Toys and Games in Latin America

Current market overview

After enjoying years of relatively high traditional toys and games growth, Latin America plunged into decline in 2016 as numerous countries within the region faced macroeconomic and political issues in the year combined with a strengthening US dollar, all of which directly impacted incomes. As incomes declined, consumers were forced to rein in discretionary spending, including on traditional toys and games.

With low household income growth, many consumers became more price focused. Products with a wide range of prices such as arts and crafts and model vehicles have become more popular, as have domestically-produced products that can be sold for cheaper in countries with high import tariffs. In addition, lower incomes have pushed many consumers in Latin America to compare prices more frequently, a potential boon for internet retailing.

Leading companies and brands

The top five ranked companies in Latin America saw declines in their share of the market over 2011-2016. Much of this is due to the fact that global toys and games makers such as Mattel, LEGO and Hasbro occupy the top spots in most Latin American markets. As importing toys from these players can be prohibitively costly either due to high import tariffs such as in Brazil or Argentina, or more recently due to currency devaluation. The top 6-10 ranked companies are mainly local players for each market. Argentina in particular has a larger share for these companies and “Others” as the government has financially supported these local companies while discouraging imports.

The top three traditional toy and game brands ranked in 2016 in Latin America are Barbie, Fisher-Price and Lego.

Looking forward, traditional toys and games are expected to see low growth throughout much of Latin America over the forecast period, with the exception of Mexico. The strong expected growth in Mexico comes in part from expected growth in online sales along with expansion in 2016 of toys and games into small channels such as convenience stores. In addition, Mexico’s economy is expected to be much more stable than others in the region and lead to higher household incomes. Combined with modest expected growth in the child population will give Mexico a strong base for traditional toys and games sales.