Global Industry Overview: Toys and Sporting Goods

Industry Snapshot

According to the International Council of Toy Industries (ICTI), in 2003 sales of traditional toys around the world was US$59.4 billion. While the toy market always had an international flavor – the creations of German toy makers delighted U.S. children in the nineteenth century – by the 1990s the industry had become truly global. This continued to be the case in the mid-2000s. Giant toy makers, such as the Mattel Inc. in the United States, Lego in Denmark, and Nintendo in Japan, generated much, if not most, of their revenues overseas. Indeed, parents in Moscow sometimes spent a month's wages to buy their daughters Mattel's Barbie, which was the most popular doll in the world with US$1.5 billion annual revenues worldwide.

Like the toy business, the sporting goods manufacturing segment is also global in nature. At the 2002 World Sports Forum in Lausanne, Switzerland, Margaret Mager, president of research at Goldman Sachs, and Andrew Gorgemans, secretary general of the World Federation of Sporting Goods Industry, indicated that the world sports market was worth US$92 billion, with the United States and the European Union accounting for 50 and 38 percent of sales, respectively. However, these markets were maturing and the interest for sports in the United States was actually declining. New growth was expected to come from Asia and other developing markets in the mid-2000s. Around the world, several brand names dominate the industry, including Nike, Reebok, and adidas-Salomon that account for one-fifth of the market. Sporting goods manufacturers have also come under criticism for several issues, especially involving the use of child labor.