Licensing – A Key Parameter Driving Global Toys Sales

As I explore in our “Key Global and Regional Trends Shaping Toys Licensing” global briefing, toys is one of largest industries for licensed products globally. Half of the top 10 most heavily licensed toys markets are in Asia Pacific, while the US is the world’s largest. As the Frozen franchise took the industry by storm, 2014 was a particularly good year in toys licensing. As the power of social media in creating successful properties becomes more pronounced and with the much-anticipated Star Wars movie in the pipeline for 2015, the stakes could not have been higher, presenting great opportunities as well as risks in both developed and emerging markets.



Key findings

  • Toys are very licence driven

Licensing is an extremely important area driving sales and new product launches within toys. The penetration of licensed toys in overall toy sales increased across almost all countries over 2009-2014.

  • “Frozen” franchise takes the industry by storm

Frozen was one of the biggest film releases of 2013, and its popularity spilled over into 2014 making it by far the most successful property of the year. The movie’s unprecedented popularity surpassed all expectations taking the industry by surprise while driving licensed toys sales in many markets.

  • Half of the top 10 most heavily licensed toys and markets globally are in Asia Pacific

South Korea, Indonesia and Singapore are the top three countries in terms of licensing penetration, with more than 40% of toys being licensed properties in 2014. Japan is the largest licensed toys market in the region in actual terms, with a value just under US$1.7 billion in 2014, accounting for 35% of Asia Pacific’s total sales.

  • The US is the origin of many international licences

Through the influence of its Hollywood blockbuster movies, the US has a huge impact on global toy licensing trends. It is also the world’s biggest licensed toys market, penetration of licensed properties in toys reached 27% in 2014 translating into almost US$5.9 billion in absolute value sales.

  • 2015 holds great potential

While, Frozen, Teenage Mutant Ninja Turtles and The LEGO Movie made 2014 a very good year for licensing, the much-anticipated Star Wars as well as Avengers, Jurassic World and Minions movies could make 2015 even more robust.

  • Creating evergreen properties requires the right approach

Music, family appeal, pre-school targeting, careful timing and intelligent co-branding could hold the key. The importance of social media  should also not be underestimated. The unprecedented success of Frozen proves the market is still far from saturation and there is still scope for the development of new properties as well as evergreen franchises.