Unveiling Latin America’s Toy Market: Fueled by E-commerce Growth

Latin America has become a hyperconnected market with the world, bringing forth new opportunities for the development and growth of the toy industry. The toys and games industry was valued at $5 billion in 2021 and is expected to reach $11 billion by 2027, with an average annual growth rate of 12.9%, according to StrategyHelix.

The region boasts a predominantly youthful population, with a median age of approximately 29 years, mirroring the global average.

Mexico, is home to a population of 130 million, with a median age slightly below the regional average at 28.3 years. Nearly half of its population is under 25 years old, with 23.58% aged 0 to 14. Similarly, in Brazil, although the median age is 32 years, children and adolescents constitute a significant portion of the population. With 53.7 million children, those aged 0 to 14 account for 20.5% of the total population, making it a market of significant interest for toy companies.

One of the main factors explaining the enormous growth in the demand for toys and games is children’s exposure to the internet, constantly being stimulated to buy the latest releases. Children are increasingly exposed to social media, influencers, streaming platforms, and digital entertainment channels. According to studies by Kids Corp LatAm, 87% of children and teens use some type of social media daily, with TikTok and Instagram being among their favorites. Additionally, about 76% of children regularly consume YouTube videos, being exposed to advertisements and promotions for the latest toys. This undoubtedly leads them to desire to acquire the latest games and toys released in the United States.

The Fundamental Role of E-commerce in Toy Sales in Latin America

The pandemic undoubtedly revolutionized the way Latin Americans shop. Following 2020, e-commerce became the primary sales channel for toys and games and remains the strongest.

In Latin America, e-commerce sales are growing at a rate of 25% annually, bolstered by the fundamental role played by marketplaces within e-commerce. Platforms like Mercado Libre, Magalu, Americanas, and VIA Varejo dominate online sales, with approximately 55% of total toy and game sales occurring through marketplaces, as stated by Felipe Sobeira, LatAm e-commerce manager for Americanas marketplace.

“In Brazil, the figure is even more impressive: 84% of buyers go through the online channel before finalizing the purchase“ said Sobeira.

As an example of the impressive growth experienced by marketplaces, let’s analyze the case of Mercado Libre. Mercado Libre witnessed a remarkable 260% growth in online toys and games sales across all Latin American countries from 2018 to 2020. Notably, Mercado Libre Mexico experienced the most significant surge in online toy sales, boasting a remarkable 352% growth from 2018 to 2020. In Brazil, sales also substantially increased by 194% during the same period.

Following Mercado Libre’s success, other marketplaces are also thriving in toy and game sales. For instance, Magalu represents 45% of total online toy sales in Brazil, according to Neotrust.

On the other hand, the Americanas marketplace has also established its dedicated channel for selling toys, known as RiHappy.

So, what do marketplaces do to boost toy and game sales? Primarily, they run numerous marketing campaigns to attract buyers to their stores. Additionally, marketplaces actively participate and engage consumers during key e-commerce events, such as Christmas, Black Friday, and Children’s Day, which consistently register the highest sales for toys and games.

High Demand for International Brands and Licensed Toys

The Latin American toy market consists of a mix of global toys from worldwide brands and licensed products, as well as more traditional toys that do not necessarily involve licensing.

The connection between Latin America and the United States has led to a surge in demand for branded and licensed toys in recent years. According to Mara Ronchin, Licensing Director at The Walt Disney Company, this market grew by 15% in 2022, and licensed products have a fan base of all ages and generations. The industry offers a variety of items to suit all tastes and ages.

Streaming platforms serve as one of the sources of research for licensing and trends, gathering both new and old content and being popular across all generations. According to David Diesendruck, CEO of Redibra, the growth of these services creates numerous opportunities for the toy industry.

The accessibility of digital content has sparked interest among kids throughout Latin America who want products based on their favorite characters, YouTube channels, or influencers.

Despite the high demand for licensed toys, the market for more traditional toys also remains strong. Latin American parents are inclined to purchase sports toys, outdoor toys that involve skill, creativity, and movement. Among the most popular categories are construction toys, beach games, sports toys, toy bicycles, and educational books, among others.

The Opportunity for Global Toy Brands and Merchants in Latin America

We’ve already seen that Latin America presents significant opportunities for brands and sellers looking to expand their products. There is a high demand for games and toys among over 20% of the population, with a strong preference for international brands and beloved characters consumed through streaming channels and television.

The easiest way to penetrate the Latin American toy market is through electronic channels, as over 68% of children discover new toys through digital platforms, and more than 50% of total sales occur through these channels. Therefore, we emphasize the importance of selling through marketplaces, the preferred channels among Latin Americans for purchasing toys and entertainment items

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