The share of Russian brands of children’s goods accounts for no more than 10% of the market

The Russian children’s goods market will grow by 12% by the end of 2024, which is comparable to the dynamics of 2023, the industry association predicts. At the same time, local producers, whose share barely reaches 10%, were unable to compensate for the departure of Western brands. The reason for this is the successful parallel import, thanks to which products from such well-known brands as Lego, Barbie and Hasbro continue to be supplied to Russia, as well as the influx of Chinese goods, especially through marketplaces.

In 2024, the growth of the Russian market of all children’s products will not exceed 12%, the Association of the Children’s Products Industry (AIDT) told Kommersant. Approximately the same dynamics were observed in 2023, when growth was 13%, to RUB 1.174 trillion. The increase in market volumes in monetary terms in 2023–2024 occurs at the level of inflation, the association states.

The games and toys segment occupies a significant share of the children’s goods market – 20.5%, but at the end of 2023 its volume grew by only 9%. The market assumed that after Western toy manufacturers, for example Hasbro, Mattel, Lego, refused to supply goods to Russia due to the military conflict between the Russian Federation and Ukraine, they were to be replaced by Russian products. But local producers now account for no more than 10% of the market, although even before the pandemic this figure was 12%, indicate the AIDT.

Children’s products from departed brands remained on store shelves thanks to parallel imports, which, in turn, maintained competition in the market, notes AIDT President Antonina Tsitsulina. Large foreign manufacturers had a significant share in the Russian market: in 2021, as the AIDT Bulletin magazine reported then, the revenue of three foreign manufacturers amounted to 29 billion rubles, while ten large Russian companies amounted to 7 billion rubles.

Detsky Mir confirms that the chain’s stores offer new collections of toys from outdated brands through parallel imports. But the supply was redistributed with the development of a network of its own brands (BabyGo, Demistar, Attivio, Mobicaro), the company said, without naming the share of local products in its assortment.

Lego stores in Russia were managed by Inventive Retail Group (IRG), which relaunched this business under the World of Bricks brand. Products supplied as part of parallel imports first appeared online in November 2022, accounting for only a few percent, but by the end of 2023 such products, especially Lego, already accounted for 60% of sales, the vice president for children’s and jewelry products IRG Maria Golenkova. According to her, the World of Cubes tried to work with several Russian brands in 2023, but “the cooperation was not successful.”

A number of Russian companies produced licensed products, for example, Nordplast – products under the Barbie brand, but the share of such products was always insignificant, notes Antonina Tsitsulina. According to her, much more than the departure of licensing partners, the market is affected by the strengthening of the position of Chinese manufacturers.

It is more difficult to compete with companies from China due to low prices, which are maintained due to increasing production volumes, confirms the General Director of Infoline-Analytics Mikhail Burmistrov.

In addition, the expert clarifies, Chinese companies have an advantage over Russian ones in terms of manufacturability and production efficiency. It is easy for them to establish a sales channel on marketplaces, while Russian companies do not have the resources to develop their own brands and production due to high loan rates, explains Mr. Burmistrov. Thus, at Ozon, according to its representative, sales of children’s games and toys increased by 50% in units.

According to the Ministry of Industry and Trade, the production of children’s games and toys increased in 2023. The ministry told Kommersant that state support measures for this market are now in place, including subsidies to compensate for part of the costs of research work, loan servicing and preferential leasing. According to Antonina Tsitsulina, in 2024, new measures to support the production of licensed products of Russian brands, for example Soyuzmultfilm, are expected to be approved.

Polina Gritsenko