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The arts and crafts category is dominated by Crayola (part of Hallmark Cards Inc). Crayola is particularly strong in the US, its home market, where the company held the second highest share of any company in a single category, only surpassed by LEGO in construction toys.
However, with international demand for arts and craft toys set to outpace US demand, Crayola will need to develop a successful expansion strategy to gain ground overseas, where its position is currently significantly weaker than in the US.
Their competitive positioning varies greatly in different regions. In Turkey, for example, Play-Doh accounted for a 38% share of arts and craft sales in 2010. Apart from being the leading brand in arts and crafts, Play-Doh has also been one of the best-selling Hasbro brands in the country. In Japan, Epoch’s AquaBeads and Akusekurura brands are quite popular.
In Western Europe, Crayola and Play-Doh are top two brands in the category, but competitive environment remains more challenging to Crayola, with strong offerings from Giochi Preziosi (Plasticine), Bandai Namco (Harumika), and Clementoni keeping its share at comparatively low 13%.
The global market for arts and craft toys is forecast to grow at a 2% CAGR in constant value terms over the 2010-2015 forecast period, outpacing US demand, which is expected to remain stagnant. With a 44% share of global sales, the US remains by far the largest market for arts and craft toys.
However, since 2005 the growth of international sales has outpaced US demand, boosted by rises in disposable incomes across emerging market countries. This trend is expected to continue into the forecast period.
Successful expansion abroad, either through price promotions, improved distribution or advertising, will be key to Crayola’s future growth.