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SATURDAY, JUNE 14, 2025
Global toy market could be Bangladesh's next forex giant after RMG

Economy

Jasim Uddin
28 November, 2024, 08:45 am
Last modified: 28 November, 2024, 11:33 am

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Global toy market could be Bangladesh's next forex giant after RMG

According to projections by market analysis and data firm Statista, the global toy market will reach approximately $150 billion by 2032, up from $102.8 billion in 2023.

Jasim Uddin
28 November, 2024, 08:45 am
Last modified: 28 November, 2024, 11:33 am
Infograph: TBS
Infograph: TBS

The booming global toy market remains largely untapped by Bangladeshi entrepreneurs, despite its potential to become the second-largest foreign currency earner after ready-made garments (RMG), provided there is necessary policy support from the government.

Industry leaders told The Business Standard that many global fashion retailers also operate toy businesses alongside their fashion items, presenting a significant opportunity for Bangladesh. However, most local companies remain unaware of the sector's export potential.

According to projections by market analysis and data firm Statista, the global toy market will reach approximately $150 billion by 2032, up from $102.8 billion in 2023.

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Currently, China dominates the toy industry, much like its position in the RMG sector, holding over 86% of the global market share and exporting toys worth $88.58 billion in 2023.

In contrast, Bangladesh's toy exports were valued at just $77 million last fiscal year, despite reaching around 88 countries in recent years, according to data from the Export Promotion Bureau (EPB).

Similar to the RMG sector, toy manufacturers are required to produce according to buyer specifications. The toy industry is broadly categorised into four segments: metal-based, wooden-based, plastic-based, and fabric-based products.

According to data from the National Board of Revenue (NBR), foreign companies in Bangladesh dominate toy exports, with local businesses contributing only a small share.

The global toy market includes a diverse range of products created for play, entertainment, and educational purposes, primarily for children but sometimes for adults as well. It covers categories such as traditional toys, electronic toys, action figures, puzzles, board games, educational kits, and more.

Foreign firms dominate Bangladesh's toy exports 

Sonic (Bangladesh) Limited, a subsidiary of Sonic Group, a Hong Kong-based company, is the largest toy exporter in Bangladesh. Its factory is located in the Uttara Export Processing Zone in Nilphamari.

Every month, Sonic produces 1 million die-cast scale models, including those of the winning cars from international rallies. Its major export destinations include European countries such as Spain, France, the UK, Germany, and Italy, as well as Japan in Asia.

The company is the largest die-cast model manufacturer exporting to the European market, producing models for all major car brands.

Sonic International was established in Hong Kong in 1988, and in 2013, it began production at its factory in Bangladesh.

In 2023, Sonic's toy exports were valued at $43.17 million, according to EPB data.

Cupcake Exports Ltd, a subsidiary of the US-based multinational Cupcake Group, is one of the leading soft toy exporters in Bangladesh.

The fabric-based toy company began production in 2019 with just 65 employees and now employs over 600 people. The factory's total investment was around $3 million.

In an interview with TBS, its Chief Executive Officer, Yasir Obaid, said, "In our first year, exports were about $35,000, and this year, we expect our export value to reach $2.5 million."

"On the day we started production, the government announced a countrywide lockdown due to COVID-19, which delayed our progress. Operations resumed in September 2021 with an initial buyer from Ukraine, though this venture was later impacted by the Russia-Ukraine conflict," he said.

Initially, the company targeted medium-sized stores in Europe and the United States but has since shifted its focus to large retailers with toy lines, he explained.

However, he noted that exporting from Bangladesh remains a challenge due to the lack of dedicated toy buyer offices in the country.

Currently, Cupcake Exports Ltd works with six buyers, with more in the pipeline. However, a significant barrier is the absence of buyer offices in Bangladesh, which forces exporters to travel abroad for business dealings, Yasir explained.

Large retailers such as Walmart, Inditex, and H&M have toy segments, but they are primarily focused on licensed products. Bangladesh has limited involvement in this area, as it requires specific certifications, he added.

He further explained that Disney, a key player in toy licensing, has certification through the Better Work programme to export licensed products. If Bangladesh's toy industry were included in this programme, it could attract both foreign and local investment.

Bangladesh is already participating in the Better Work initiative for its garment and footwear sectors, which could serve as a foundation for developing the toy industry. Engaging Disney and similar entities in production within Bangladesh could unlock substantial opportunities for the sector, the Cupcake CEO added.

Local firms can grow with govt policy support

Local exporters believe that while China currently dominates the global toy market, Bangladesh has the potential to become the second-largest toy exporter within the next decade, given the right government policy support.

Kamruzzaman Kamal, director of Marketing at PRAN-RFL Group, a key exporter of plastic-made toys, told TBS that Bangladesh's entry into the global toy market requires supportive government policies to foster growth in this sector.

The company initially produced plastic toys for the local market, but in recent years, it has expanded its exports to several countries.

According to NBR data, the company exported about $1 million worth of plastic toys and tricycles in the last fiscal year.

Kamal said that the local toy market, once fully dependent on imports, has now become an export-driven industry, meeting about 80% of domestic demand.

The company is still in the early stages of exporting low-cost products but sees opportunities to diversify its export portfolio by introducing higher-end toys. To expand its export footprint, Kamal said the company is gradually increasing its production capacity for the export market.

He hoped that global economies would recover as geopolitical tensions ease, as stability is essential for boosting exports.

Exporters said the experience gained by the RMG sector in dealing with international buyers and managing supply chains could offer a significant advantage in tapping into the toy market, especially since many of their established brands already feature toy lines.

Packaging remains a key challenge, as exporters must import packaging materials to meet buyer specifications. Additionally, product testing is crucial, with exporters currently required to send samples abroad for evaluation.

Bangladesh can capitalise on China's decline 

"In 2016-17, China controlled about 98% of the global toy market, but now they are gradually exiting this industry," said Dr Mashrur Reaz, founder and chairman of Policy Exchange of Bangladesh, a private think tank focused on applied public policy and market solutions for economic growth.

Plastic toys are also a low-cost industry, and due to rising wages in China, the country will no longer be competitive in this sector, he said, adding that this creates an opportunity for Bangladesh to capture a significant share of the market, as it is also a labour-intensive industry.

"If we adopt the right policies, Bangladesh could potentially export $10 billion from this sector," he said.

Mashrur further said that after the RMG sector, Bangladesh has no other large-scale export earner, with sectors like leather, home textiles, and frozen foods hovering between $1 billion and $2 billion in exports.

 

 

 

Bangladesh / Top News

Toys / export / Economy

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