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May 9, 2019

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I agree with you Richard. Toys and Licensing industries have long overlooked Africa – except South Africa – which offers good prospects. Yet, businesses should be aware that while the continent is projected to be the fastest growing region in terms of children population over the coming years, in comparison to developed markets, disposable income and spend per child is forecast to remain low. So, pricing strategies should be very carefully thought through.
This is the area that I investigated in my “Global Child Population Growing, but there’s a Twist” article back in 2012:
• A combination of growing spend per child in developed markets, and rising disposable incomes in emerging markets, means that there is power in pricing.
• Toy manufacturers ultimately worry that the declining numbers of children in core markets will constrain their growth prospects. Yet, where fewer toys are bought, their value tends to be higher.
• One consequence of the overall downturn in birth rates in so many countries has been smaller household sizes and higher consumer expenditure per child, which in turn has led to more discretionary spending on non-essential products, especially toys & games. Since disposable income is a more important indicator for toys & games sales than demographics, the industry can still find growth through innovation, up-trading and pricing.
• And if that is not enough to allay concerns, it should be noted that in those emerging markets where demographic indicators are in relatively good shape, so too is the underlying trajectory of disposable incomes.

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