Canadian Toy Market

Part
01
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Part
01

Market Size - Canadian Toy Market: Breakdown by Province

The provinces of Ontario (36.09%), Quebec (21.03%), British Columbia (16.15%), and Alberta (14.73%) have the largest shares of the Canadian toys market. The toy markets in Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island, and Saskatchewan are worth less than $90 million. Owing to lack of publicly available estimates, the geographical breakdown was triangulated.

FINDINGS

  • Marketline estimates the market size of the toys market in Canada to be $2.625 billion.
  • The size of the toy market in the ten provinces of Canada:
    • Alberta: $386.77 million (14.73%)
    • British Columbia: $423.91 million (16.15%)
    • Manitoba: $86.52 million (3.3%)
    • New Brunswick: $47.11 million (1.79%)
    • Newfoundland and Labrador: $24.1 million (0.92%)
    • Nova Scotia: $59.85 million (2.28%)
    • Ontario: $947.27 million (36.09%)
    • Prince Edward Island: $10.47 million (0.4%)
    • Quebec: $551.93 million (21.03%)
    • Saskatchewan: $79.30 million (3.02%)
  • The United States toy market is worth $28 billion, and the global toy market is valued at $90.4 billion.
  • According to the NPD Group, the Canadian toys market grew by 3% in 2017.
  • IBIS World estimates the toy, doll, & game manufacturing--not retail sales--industry in Canada to be worth $235 million.
  • The traditional toys market has been slowing in recent years. The consumer confidence took a hit after Toys "R" Us terminated operations, and other toy stores reduced their inventory leading to reduced sales.

RESEARCH STRATEGY

In order to fulfill this request, we began by searching the Statistic Canada portal. Statistics Canada provides province-specific sales data for multiple categories; however, it does not provide any data specific to the toy category. Next, we looked through research reports published by Euromonitor, NPD Group, Techanvio, IBIS World, and Marketline, but failed to find province-specific information. All the reports were pay walled and provided very little information. Even the ones that contained market size related information, provided the same for the whole of Canada (not provinces). Lastly, we searched the Canadian Toy Association for information, but this too did not result in any success. Given the above limitations, we triangulated the province wise geographical breakdown of the market.

Statistics Canada provides sales data for the sporting goods, hobby, book, and music stores by province and territory. We assumed that geographical breakdown of the toy category to be the same as the sporting goods, hobby, book, and music category. We used the percentage provincial share of sales of sporting goods, hobby, book, and music products to determine the geographical breakdown of toy sales in Canada. However, Statistics Canada has not provided the sporting goods, hobby, book, and music products sales data for Prince Edward Island; it has only provided the retail sales data for Prince Edward Island. As the percentage share of each province in the total retail sales does not differ much from that in the sporting goods, hobby, book, and music products category, we used Prince Edward Island's share of retail sales to calculate the value of its toy market.

Calculations for the size of the toy market of all ten provinces have been shown in the attached spreadsheet.

Part
02
of two
Part
02

Demographics - Canadian Consumer: Buyers of Toys

The demographics of consumers that purchase toys in Canada are individuals aged between 35-44 years, who are parents, who are married, who have kids, that mainly have advanced degrees, and that have an income of over $125 thousand.

OVERVIEW OF THE CANADIAN TOY INDUSTRY

  • The Canadian toy market is a $2625 million industry, with the major market share captured by Walmart (29.5%) and Toys "R" Us (25.3%). Other players in the industry, such as Chapters and Mastermind, have very nominal share.
  • Toys "R" Us is a 100% Canadian owned and operated company, with more than 230 stores in Canada and 4,000 employees. The company has more than $1 billion a year in sales, and their Canadian stores have had a steady track record of sales gains and earnings of more than $100 million per year for the past nine years.
  • Toys "R" Us is a toy brand for kids ages 0-14 years and above, according to their website. The company sells many categories of toys for both genders, including educational, gaming, and electronic toys, among others.
  • Walmart's major market segment comes from the United States, rather than Canada. It also has retail consumers across various product lines, including toys and other segments. Therefore, Walmart consumer demographics may not accurately reflect Canadian toy consumer demographics.
  • Based on the above findings on the Canadian toy industry, the most appropriate representative of the market specific to Canadian toy consumers are Toys "R" Us consumers.

CANADIAN TOY CONSUMER DEMOGRAPHICS

  • Given that Toys "R" Us consumers should represent the typical Canadian consumer that purchases toys, the following demographics were extracted from a Toys "R" Us consumer demographic report and an NPD study.
  • Age: Individuals aged between 35-44 years make up the major segment of consumers who are purchasing toys in Canada.
  • Gender: According to NPD study, parents make the majority of toy purchasing decisions in Canada. Therefore, it is fair to assume that females and males, or both parents, have an equal proportion of the toy buying ratio when it comes to gender.
  • Income level: Most Canadian consumers who purchase toys are in the income bracket of over $125 thousand.
  • Education level: Consumers that purchase toys in Canada are mostly advanced degree holders.
  • Marital Status: The average age of marriage in Canada is over 30 years. Based on the aforementioned consumer segment of 35-44 years, it is likely that the marital status of most consumers who buy toys in Canada is married.
  • Have kids: Most consumers that purchase toys in Canada have kids.

RESEARCH STRATEGY:

To identify information on the demographic profile of consumers that purchase toys in Canada, the research team first looked through credible industry reports and market analyses for the toy market in Canada. We used this approach as it would provide information on market growth, trends, and consumer segment details driving the industry. Some reports we looked at were from marketsandmarkets, Zion, and Seeking Alpha, among others.

Through our search, we found a Seeking Alpha Canadian toy market analysis, which shared key insights about the industry. We found that the Canadian toy market has a value of $2625 million, wherein the major market share is captured by brick and mortar stores owned by mass retailers Walmart (29.5%) and Toys "R" Us (25.3%). The other players in the Canadian toy market, such as Chapters and Mastermind, have very nominal share in the market, some even below 5%.

Since we found that two key players dominate the Canadian toy market, the research team then tried to identify which of the major players' core consumer group would provide the most appropriate representation for demographics of consumers that purchase toys in Canada. We looked at Walmart's and Toys "R" Us' websites, along with product segmentation, to determine which of the key players to use for demographics. We found that Walmart's major market is the United States, rather than Canada, and has multiple product lines making it a nominal segment in terms of offering. On the other hand, Toys "R" Us is a 100% Canadian company with a large base of consumers in the country, it sells products across most toy categories, and it has a core business of toys for all ages. Based on this, we determined that the most appropriate representative of the Canadian toy market is Toys "R" Us consumers, rather than Walmart consumers.

Next, the research team conducted a consumer segmentation analysis for Toys "R" Us' segment of the Canadian toy market. Through this, we were able to provide details on the demographics of consumers that purchase toys in Canada. This included the required age, gender, marital status, education, income, and children demographics that were provided above.
Sources
Sources