Showing posts with label Leading retailers in the KSA toy market. Show all posts
Showing posts with label Leading retailers in the KSA toy market. Show all posts

Thursday, August 10, 2023

Mattel or Hasbro: Will the long-term Rivalry turn into a partnership or Vice-Versa?

Hasbro and Mattel, the leading players in the KSA toy market, dominate as the top toy giants, captivating children and competing fiercely for market dominance. With Hasbro's revenue of USD 1324.4 Bn and Mattel's revenue of USD 2312.5 Bn, there exists a substantial difference of approximately USD 980 Bn between the two companies. However, the distinction goes beyond just revenue figures. Examining their market reputation, investment landscape, and analyst preference provides a broader perspective of the industry landscape. Discover more about these toy industry leaders below.

1. A long history of trials & error with KSA: Mattel's Barbie Backlash and Hasbro's Safe Play in KSA

 

KSA Toy Market Dynamics:  Click Here

When Hasbro first penetrated KSA’s toy market, Mattle was already on its way up, generating a decent revenue & expanding the market size. On one hand, Mattle has had a bitter-sweet relationship with GCC countries. For instance, Barbie which has been Mattle’s flagship product for over 60 years faced a substantial backlash when it entered the Middle East in 1990s, mainly because of violation of Islamic dress code but the effect on the overall sales was not as much as one would have anticipated.

As per an article published by Arab News, “Even temporary bans — in 1995 and 2003 — have failed to dim her appeal in the Kingdom.” Hasbro on the other side, has adopted the policy of, ‘play safe’ when it comes to KSA but has had other controversies on a global scale.

2. Exploring New Frontiers: Hasbro's Digital Expansion and Mattel's Operating Challenges in the Evolving Investment Landscape

KSA Toy Market

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Hasbro and Mattel both have been focused in recent years on diversifying their revenue bases beyond traditional toys. Hasbro has been investing in digital gaming in order to expand its presence & go with the trend.

According to company’s CEO Chris Cocks, “low barrier-entry digital experience is really going to be kind of the flywheel that drives the brand’s growth over the next couple of years,” The company’s first quarter operating profit as per its official website, “amounted to $17.9 Mn and adjusted operating profit of $47.2 Mn.”

The brand has also signed a second licensed agreement with SEVEN to develop the world’s first transformers indoor entertainment center in Saudi Arabia which according to, Zawya, “will offer thrilling and highly immersive experiences for people of all ages.” Mattle on the other hand, recorded an operating Loss of $115 Mn, a decrease of $195 Mn & adjusted Operating Loss of $87 Mn, a decrease of $177 Mn.

The combined viewpoint of the market experts seemed to be the one of dilemma. As per Morningstar analyst Jaime Katz, "Expectations are pretty tepid given that the year (2022) ended in a less favorable-than-anticipated way. I don't think that this is going to be a banner year for the toy industry by any means.”

3. The Future of Hasbro and Mattel in the KSA Toy Market: A Dynamic Rivalry and Collaborative Potential

KSA Toy Market

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With a series of investments & partnerships with other players such as Al Hokair Group, Hasbro’s future in the kingdom looks decent enough for a robust growth. On the other hand, Mattle definitely has consumer preference when it comes to product quality & its flagship products like Barbie.

The two brands have been in an on-off relationship with each other. For instance, as per an article published by Forbes, “Rivals Mattel and Hasbro, for the first time, have entered into a multi-year licensing agreement to create co-branded toys and games.” Before this, an offer was made by Hasbro to acquire Mattle in 2017 & much before that in 1990s, both of which were rejected by the latter.”

As per our views at Ken Research, both the brands have their own USP’s, the advantage of which is expected to be availed by the other as a result of their new agreement. The rivalry for market dominance in KSA will however continue.

Wednesday, August 2, 2023

KSA's Import-Driven Toy Industry: Exploring Tremendous Growth Potential: Ken Research

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$2.1Bn Import-Driven Market with Huge Potential. Dominated by China at 72.2%, driven by growing e-commerce, retail, and 9 Mn young population. Major players like Lego enter despite regulations, unveiling untapped opportunities. In this article, we uncover the market space as a whole. Read below to know more.

Storyline

  1. KSA's toy market experiences demand surge from online shopping and global players.
  2. Regulations post-2007 don't deter major brands' entry or expansion.
  3. Distributors play a vital role in industry growth.
  4. As per Ken Research, collaborative ecosystem drives innovation and reach in KSA toy market.

KSA Toy Market

KSA Toy Market Dynamics:  Click Here

1. Unleashing Imagination: The Evolution of KSA Toy Market - A Timeline of Distributor & Player Entry

KSA Toy Market

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KSA’s Toy Market which was characterized by the presence of a few players uptil early 2000, but witnessed a demand surge in the aftermath majorly because of the growing popularity of online shopping & entry of global players in the market. Major regulations which started taking place after 2007 including the ‘G-mark conformity certificate’ surprisingly did not have a much effect on major brands eyeing the market for expansion or entry. Distributors have played a big role in the growth of toy industry with 9 of them supporting industry growth over the years (their role can be ascertained by the fact that distributor margin stood at 50-60% on FOB as of 2022).

2. GCC Regulations and Collaborative Distribution: Driving Innovation and Reach in KSA Toy Market

KSA Toy Market

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The market ecosystem of KSA's toy industry is composed of four key player segments: manufacturers, distributors, regulatory authorities, and retailers. With over 1,000 manufacturers, the industry offers a diverse range of toy production capabilities. Distributors, numbering more than 10, play a crucial role in efficiently distributing toys from manufacturers to retailers. Regulatory authorities enforce standards and regulations to ensure toy safety and compliance. Retailers, with over 2,000 establishments, serve as the primary point of sale, offering a wide variety of toys to consumers. The regulatory mechanism implemented by authorities directly impacts the operations of all segments, ensuring the availability of safe and high-quality toys. This collaborative ecosystem shapes the dynamics of the KSA toy market, meeting the evolving demands of consumers while upholding safety standards. As per Ken Research estimates, the KSA toy market is expected to grow at a robust rate in the upcoming years.