“For multinational toy players the country still represents one of the last biggest markets in Europe to tap into,” say the officials of market research company Euromonitor.
This potential is what several businesspeople sensed, as well, who bet on the kids’ need for toys and games and opened stores that sell them, writes BUSINESS Magazin (bmag.ro).
One of these people is Lorand Szarvadi, the founder, chief executive and shareholder of Domo Retail, the second leading electronics, home appliances and computer retailer on the local market. He will continue to expand retailer Toyplex, which reached 19 stores throughout the country. The latest store of Toy Concept, the operator of the Toyplex network, was opened in Botosani Shopping Center (NE Romania) early this year. The network, where Szarvadi holds a minority stake, owns stores in Bucharest (5) and in various other cities in the country such as Constanta, Pitesti, Ploiesti and Oradea.
Szarvadi announced in mid-last year that he would bet on expansion of the toy retail network because he was confident in the market potential. The businessman who created the Domo electronics and home appliances retailer invested in the toy business in 2008, the last year of economic boom. Even though consumer spending fell in each of the following three years, the businessman continued to invest in Toyplex, designed as a toy supermarket targeting kids aged 3 to 7.
Szarvadi is the not the only one to have sensed the potential of the toy market in Romania, once dominated by dolls made in Arad (west of the country) and cars made in other cities before 1989. Meanwhile, Barbie dolls and Cars vehicles have taken the top spot as children’s favorites.
The doll factory in Arad, however, tries to cope with only 34 employees left of the 900 it had in 1989 and keep prices low on a market dominated by Barbie, Hannah Montana and Cindy. After over sixty years in business, Aradeanca continues to make its well-known Ioana and Maria dolls but also released dolls modeled on celebrities like Nadia Comaneci to be able to complete with the imports that have flooded the market after 1990.
“We’ve noticed an upward trend in the sales of educational and creative toys on the local market. At the same time, more and more customers are buying license toys, i.e. Disney, Cars and even Spiderman, as the movie is due out this year,” says Flaviu Pastor, marketing and public relations manager of Diverta chain, controlled by businessman Octavian Radu.
The bookstore chain, which numbers dozens of stores, went insolvent in 2010 as a result of the consumer spending decline and difficult economy.
The Diverta official says sales of toys throughout the chain will increase at the same pace as the market, 3% to 6% this year.
“We want to put trendy products in stores because Romanians do not only look at the price; they also look for quality products suitable for their children. Children’s safety comes first in this industry. The price is not a decisive factor,” Flaviu Pastor says.
Mircea Bivolaru, general manager of toy distribution company Smart Toys says that buying a toy is actually an investment in one’s own child. “Toys have an educational role; they are not just something to keep a child entertained for a few hours.”
He says that Romanians most often go to hypermarkets to buy toys.
“When they go shopping they prefer to go to stores with a broad supply. They want to buy all the products they need in one place. Moreover, there aren’t many specialist stores on the market.”
The hypermarket chains in Romania carry a broad supply of toys and games, which is made possible by their ample floor space.
“The best-sellers in Cora stores are plush toys and those products promoted on TV. As for games, people prefer both traditional games for the whole family and creative and skill games,” says Ana Maria Florea, the representative of hypermarket chain Cora Romania, an over EUR300 million business. She says sales of toys rose 6% year-one-year in 2011. Considering the sales of the chain went up by merely 1% or 2% the toy segment performed even better.
(English version by Loredana Frățilă-Cristescu)