Frenemy with Benefits: How can Toys Makers Capitalise on the Rise of Toy Rental in Asia? – Part 2
As highlighted in the first article, a deep understanding of the factors affecting consumers’ renting behaviour is necessary for toymakers to capitalise on the toy rental trend. In general, consumers choose the rental option if toys have a high price, low usage or take up a lot of space. In Singapore, kitchen sets and playhouses are among the top rented items. Price is not the major concern for local people, but the amount of space these toys occupy really matters. In Indonesia parents often rent bulky toys such as ride-on vehicles and expensive pre-school toys. In Vietnam, branded toys imported from the US, Japan, etc., are high in rental demand as parents do not trust the quality of generic brands in the market.
Note: Preliminary data, based on 11 markets researched
These insights into consumers’ renting patterns should be placed in the context of existing demand and future prospects for individual categories in traditional toys and games. It helps toymakers to formulate win-win strategies which allow them to exploit the sharing economy trend and still not forgo existing opportunities in traditional business.
The table below highlights potential activities which manufacturers of traditional toys and games and rental companies can undertake, in the context of Asia.
Traditional toys and games’ manufacturers
|Aces: refers to categories with robust growth (above industry average) in both historical and forecast periods.||Outdoor and sports toys: Measure cannibalisation effect of toy rental services to forecast demand and optimize prices. Construction toys: distribute obsolete products for toy rental companies.||Outdoor and sports toys: offer large items such as playhouses, water slides, etc…|
|Rising stars: refers to categories with accelerating growth over the forecast period.||Not priority.||Ride-on vehicles: offer unique items such as cycle rickshaws, etc., and give consumers the option to buy rented toys. Baby toys: offer bulky baby toys such as bouncer seats, etc., and target families on holiday.|
|Past champions: refers to categories whose growth was robust over the historical period but is expected to decelerate over the forecast period.||Distribute obsolete products for toy rental companies.||Offer subscription services for toys which are not in rent demand and emphasise the variety of offering.|
|Laggards: refers to categories with below-par growth in both the historical and forecast periods.||Distribute obsolete products for toy rental companies.||Offer subscription services for toys which are not in rent demand and emphasise the variety of offering.|
Source: Euromonitor International
Note: Recommended strategies are derived from the toy rental trend only and do not undermine the importance of licensing, new product development or cross-platform strategies, etc.
Fierce competition from video games and the dominance of copycat products in many countries in Asia call for new growth strategies. Although it is too early to confirm whether toy rental is a fad or will continue to be a trend in future, toymakers should consider joining this collaborative economy before toy rental services become rivals. They can reap the benefits of an expanded customer base and minimise the impact of seasonality. Nevertheless, careful assessment of individual product categories should be carried out to avoid the pitfalls of a diversification strategy.