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STEM Toys Rally in Russia but Jigsaws Fight a Brave Rearguard Action

Locally-sourced toys increase their market share, while Russian parents opt for education over entertainment.

Photo: Puzzling developments in the Russian toy sector.
Puzzling developments in the Russian toy sector.
Photo: Puzzling developments in the Russian toy sector.
Puzzling developments in the Russian toy sector.

Gone are the days when Russian kids could be distracted by such traditional fare as dolls, teddy bears and model cars. According to recent industry research, a quarter of the toys and games market nationally has now been taken over by construction sets and so-called STEM products.

STEM – an acronymic term for Science, Technology, Engineering and Maths – refers to toys deemed to have at least as much educational as entertainment value. Within its remit are such diversions as junior laboratory sets and educational experiments designed to introduce the wonders of chemistry, physics and biology to enquiring minds.

Overall, in the first quarter of 2016, across Russia toys and games sales contracted by nearly 20% in quantity terms and 8% in value terms. This decline was driven by an overall decrease in incomes and by rising prices in the consumer sector. While previously the market had been dominated by imported toys and games, the share of locally-manufactured products rose to 20% in 2016. In 2014, it was just 10%, rising only after the introduction of sanctions by the US and EU.

Sales of construction sets, however, have been unaffected by the downward trend of the market. In fact, the sales of such items grew by 33% year-on-year in the first six months of 2016. This is despite the fact that such items cost, on average, 20% more than toys in other sectors.

In truth, this demand for construction sets has been driven by parents, with many of them keen to stimulate their kids' intellectual development while also reluctant to purchase more expensive high-tech toys, such as Robodogs and Nintendo consoles.

Another development has been the emergence of so-called combination sets, items that blend conventional toys within a construction set framework. Popular options here include dolls' houses and model farm and airport kits.

Other segments that are seeing something of renaissance are board games and jigsaw puzzles. Demand here is being driven both by affordability and by the fact that such items have a nostalgic appeal for parents. An average jigsaw puzzle costs just US$3.00, while a board game can be bought for around US$9.00. The market share of locally produced goods in this segment is as high as 40%, indicating a considerable potential for imported items to make inroads.

At present, construction sets account for around 25% of Russia's toys and games market, followed by dolls with 19%, but showing a declining trend. This is followed by outdoor games and sporting goods with 14%, though this is tipped to grow.

Next up are model cars and trucks (12%), followed by the hobby sector, which has stayed somewhat stable at 7%. Further down the scale are TV and movie action figures (6%), board games and jigsaw puzzles (6% and rising), soft toys (4%) and child-friendly electronics items (2%).

Leonid Orlov, Moscow Consultant

Content provided by Picture: HKTDC Research
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