Iran’s Toy Market Lackluster

EghtesadOnline: Iran’s toy market and industry are relatively very small.

News ID: ۷۸۷۳۲۲

21 November 2021

The domestic toy market is worth $300 million, of which the share of domestic producers is around 30-35%, the head of Toy Manufacturers Association said.

“Nearly $20 million worth of domestic toys are produced annually and about $160 million worth enter legally and as contraband, but the turnover is about $300 million because of the massive gap between production and market prices,” Gholamreza Dizaji was also quoted as saying by Fars News Agency.

According to the official, although toy imports are legal, a total of $90 million worth of toys were smuggled into Iran in the fiscal 2020-21.

Per capita toy consumption in Iran with 20 million consumers, including 18 million children under 14 as well as two million adults, is around $15 per year while the global average stands at $400.

It is at $500 in Australia, France and Germany, and $70 in Turkey.

“Although toy production is considered a cultural activity, its manufacture is subject to both VAT [9%] and income tax,” he said, noting that 17% of manufacturers have left this field over the past two years due to economic pressure.

According to Hamed Ta’ammoli, a board member of the association, some 20 factories produce toys at an industrial scale in Iran, in addition to 100 large and small workshops.

The Toy Manufacturers Association has 60 manufacturers as its members.

According to Statista, toy industry is a term used to refer to the massive industry concerned with making playthings for youngsters. Previously, the term “toy” was employed to refer to tiny items like buttons and hooks. As this use is presently superseded, most references to the toy industry, in modern contexts, relate to children’s playthings.

The global toy industry is highly competitive with low barriers to entry and traditional toy manufacturers are seeing a rise in competition from digital gaming products, digital media and products that combine traditional analog products with digital play.

Several external factors may influence demand for traditional toys. One is the aging of society in mature markets, witnessed already by a more or less stable number of children in the European Union and the United States.

The child control policy and rising incomes have even led to a sharp decline in child population in the most populous country, China.

Consumers are fairly price sensitive. This means producers face cost and price competition to a significant extent. This competition over costs is reflected in the production strategy of producers, with many producers offshoring and outsourcing production to China to reduce production costs.

According to Statista, total revenues of the world toy market was recorded at around $94.7 billion in 2020. The market has grown by over 13% since 2010.

The United States was the leading importer of toys, games and sports requisites in 2020, with imports of approximately $36.37 billion.

Last year, China had toy, game and sport requisite exports amounting to approximately $71.53 billion in value.

Danish company Lego, known for its interlocking plastic bricks, was the leading toy company worldwide with over $7.2 billion in revenue in 2020. Tokyo-based Bandai Namco followed with a revenue of almost $6.6 billion, among the major toy companies. Hasbro, Mattel and Jakks Pacific complete the top five.