Building a curious and innovative mind almost always starts with playing with toys during early childhood. “Through play, children learn to persist, interact, engage, invent, and act out their ideas and share them,” said the National Association for the Education of Young Children (NAEYC). “Play affirms and stimulates children’s creativity and nurtures the ‘thinking outside the box’ approach that children will use to contribute their own ideas to the world.”
In Egypt, toy manufacturing has long suffered government negligence and mounting challenges. However, a devalued pound and tight import restrictions are significantly increasing the prices of imported variants, giving local manufacturers a small window of opportunity to regain market share.
To succeed, toy manufacturers should focus on getting ahead of global trends. “Despite the presence and design of [playthings] in Egypt, up to the present time foreign [toys] are still the favorite toys for Egyptian children,” noted research published by Hewan University in 2022.
Shifting children’s preferences to locally made variants could prove lucrative since nearly a third of Egypt’s population was under 14 years old in 2023, according to data aggregator Statista. That segment is growing by 1.6% of the population (more than 1.6 million new babies) annually, based on government data.
Left to die?
Egypt’s “golden age” of toy manufacturing started in the late 1970s and continued until the 1980s. At the time, “most of the toys sold in Egypt were manufactured locally,” experts told Al Watan, a local newspaper, in an investigative report on local toy manufacturing. “At the time, there were very few toys made in China or Europe sold in Egypt … Local producers even took part in international children’s toys exhibitions in other Arab countries, including Saudi Arabia, Libya, Yemen and Palestine.”
Since the 1990s, China’s gradual rise as an industrial powerhouse and the Egyptian government’s negligence has led to the sector’s gradual demise.
Al Watan’s 2019 investigative report found “80% of mass-market toys sold in Egypt were imported, mainly from China.” The remaining 20% were small-scale local factories using plastic, rubber, metal, cloth and wood.
Some of those “made-in-Egypt” toys feature moderately advanced technologies, like The Dancing Cactus, which contains a mic to mimic sounds around it and “dance” to a short music playlist stored in its memory. Another example is PopIt, an electronic toy that requires players to quickly press buttons that light up in quick succession.
Others have rudimentary features like color light bulbs and sounds. Those features often appear in scooters, plasma cars, toy cars, weapons, doll houses and toy sets for different professions, such as doctors, engineers and cooks.
Difficult market
The local toy marketplace has several standout features. According to Osama Gaffar, former head of the Stationery and Children’s Toys Chamber in the Cairo Chamber of Commerce, “50% of Egypt’s annual toy sales start a couple of days before and throughout Eid El Fitr’s three-day holiday.” Eid El Adha is the second-best season for children’s toys (lasting four days), followed by Valentine’s Day and Christmas.
Further complicating matters is the two top seasons occur at different times every year as they follow the lunar calendar. That could mean that in one year, Eid El Fitr or Eid El Adha might overlap with Valentine’s Day or Christmas, spiking demand for diverse toys and gifts compared to historical trends.
Gaffar said such narrow sales windows also mean “prices fluctuate heavily before, during, and after those periods.” Amplifying that volatility is that in the past two years “some toy shops offered surprise discounts weeks before the high demand season started to attract buyers earlier than usual.”
Another peculiarity of the local market is that high consumer demand doesn’t necessarily mean retailers increase their orders from their suppliers. “In 2021, there was a lot of stock from the past year, so traders didn’t order new toys,” Gaffar said. “The number of imported toy containers was a quarter of what we saw the year before.”
Adding even more uncertainty is the possibility that trending toys could lose sales momentum from one holiday season to the next. An investigative report by Youm7, a local newspaper, said El Manshya Market in Alexandria, Egypt’s second biggest toy marketplace after Cairo’s El Mosky, has seen a sudden “demand shift from the [passive] dancing cactus to [the actively engaging] PopIt toy.”
Window of opportunity
Government restrictions on imports and the pound’s devaluation have meant imported toy prices are rising significantly. Barakat Safa, a member of the Stationery and Toys Division under the Federation of Egyptian Chambers of Commerce, told Al Masry Al Youm in January 2024 that imported toy prices had jumped 100% versus a year earlier. “We saw low demand for gifts and toys during Valentine’s [2024] as a result,” he said.
Between late April 2024 and early May 2024, imported toy prices jumped 30% to 60% for Eid Al Fitr. Two months later, Eid Al Adha pushed imported toy prices between 50% and 150% higher.
To capitalize on the increasing unaffordability of imported toys, local toymakers need to keep abreast of global consumer trends in the industry.
Fueling those changes is that “nearly two in three parents (65%) will consider how the toy they choose helps build a skill set, particularly when it comes to helping boost kids’ understanding of [science, engineering, and technology] concepts and even skills like cooking, sewing, baking and cleaning,” noted the 2024 Holiday Toy Shopping Insights report from The Toy Association in the United States. “Just over half (51%) of parents also consider whether a toy promotes mental well-being.”
Ultimately, toys should “bring out the best in children, … focusing on those that offer both challenge and freedom,” Ryan McFarland, a member of the Forbes Council, said in July. “The goal is to equip children not just with specific knowledge, but with the resilience, creativity and problem-solving abilities that will serve them throughout their lives.”
Another rising trend capitalizes on toys’ “enduring impact on pop culture [and] vice-versa,” the 2024 report from The Toy Association said. That was evident since last year, as it was “a banner year for blockbuster toy-related movies like “The Little Mermaid,” “Barbie” and “Teenage Mutant Ninja Turtles,” the report explained. For local toy producers, that trend could open the door for franchise deals with global players.
A November paper from U.S.-based Exploding Topics, an entertainment-focused think tank, also noted that more toymakers increasingly cater to parents. From October 2023 to October 2024, those toy sales increased more than 250%, Exploding Topics said. “In 2024 and beyond, the toy industry looks to be investing in …nostalgic toys [for] parents.”
Other trends include increased awareness of the environmental impact of children’s toys. “Your kid’s toys are killing the planet … is a message that parents are starting to internalize as they demand action from toy manufacturers,” the report noted.
There also is an increasing preference for fancy packaging. “Toy companies are now creating incredibly elaborate packages to provide the best unboxing surprise for children.”
Lastly, integrating technology and robotics into traditional toys and linking them to dedicated smartphone apps is on the rise, the Exploding Topics paper noted.
A global trend that is almost nonexistent in Egypt is “toy subscription services, [which] are starting to soar,” noted the Exploding Topics report. “The basic premise is that parents rent toys instead of buying them.” Along with saving money, it also “appeals to parents who are environmentally conscious and want to cut down on the waste their discarded toys create.”
Coping with such changes is essential for existing and new Egypt-based toymakers to grow their business inside Egypt, let alone MENA. According to Exploding Topics, forking out significant upfront investment to update toy manufacturing will pay off. “The foundation of the toy industry seems extremely stable,” the research note said. “Even in uncertain times, parents want to provide joy for their children. That’s a fact that will never change.”
This article first appeared in February’s print edition of Business Monthly.
