Some are calling it the “grown-up toy market” (not to be confused with the adult toy market) or the “market for kidult toys.” But, whatever moniker you choose, this segment of the toy market is one that can no longer be ignored by manufacturers and suppliers.
And if this year’s Hong Kong Toys and Game Fair was any indication, many in the industry are already taking the segment very seriously. The fair featured for the first time a new category of exhibits, called “Kidult World.” According to the Hong Kong Trade Development Council, the term refers to a melding of “kid” and “adult,” and it represents a growing market where grown-ups are becoming big buyers of both traditional toys and new toys aimed at hobbyists, collectors, and aficionados.
This year’s fair in Hong Kong brought together over 80 exhibitors who showcased an array of action figures, airsoft guns, board games, collectables, hobby products, magic sets, mechanical toys, miniature vehicle models, and puzzles. According to industry representatives at the fair, the kidult market in the US accounted for roughly 15% of the total toy market there last year, and an increasing number of toy companies around the world are beginning to target adult users. According to a May 2013 Euromonitor International survey, the segment can represent between 5% to almost 25% of the toy market in many developed and middle-income economies.
Some of the hot items at this year’s “Kidult World” included war-game equipment, such as defense rifles and pocket guns, and car models. A Hong Kong company showcased the Hongqi (Red Flag) limousine model, the first luxury-car brand designed and manufactured in China. Another Hong Kong company exhibited a set of US Marine Corps action figures, equipped with the latest gear and weaponry.
Other highlights at this year’s Hong Kong fair were high-tech toys, such as an iPhone-augmented-reality toy gun, a smartphone-controlled battle tank, and an iPad-compatible game board. Using new technology called “augmented reality,” players can not only control toy helicopters, tanks and weapons with an iPhone or iPad, but can also battle virtual aliens superimposed on backgrounds via real-time cameras.
Grown-up toy market has deep pockets willing to spend
According to the German business magazine Deutsche Welle, more German adults are buying toys for themselves. It estimated that over 20% of all toys purchased in Germany were bought by grown-ups for their own use, and noted that many fathers in Germany today play with the model railroad sets, remote-controlled vehicles, and other similar toys that they could only dream of having in their childhoods.
Korea is another sophisticated and rich market for grown-up toys. According to a recent Korea Herald report, adult hobbyists have created a $50 million industry in the country. The report said that Korean kidults “are often lavish consumers eager to pay exorbitant amounts for their beloved playthings.” For example, the bestselling Death Star Lego set from the Star War series costs around $600. A plastic model of the West German anti-aircraft tank Flakpanzer Gepard costs $430, while a Ferrari die-cast model costs around $780. And a miniature radio-controlled tank can cost over $1,800.
Despite these high prices, sales in Korea are booming. In one shop specializing in toys for kidults, sales of radio-controlled toys soared 27.3% in May and 21.7% in June, compared to last year. And online sales seem to be growing even faster. According to the Korean online shopping mall Auction, which is similar to eBay, in May and June, sales of radio-controlled toys jumped 95% from a year ago. There are reportedly now some 300 online communities for Korea’s kidults, estimated to have between 10,000 to 50,000 members, most of whom are between 20 and 40 years old.
While Korea is booming, the real prize may be Japan. Toymakers there have successfully expanded the age range of their target consumer in response to declining birth rates. According to Euromonitor, in 2011, toys targeting the over-20-year-old age group accounted for more than 23% of all toy sales in Japan. With more cash to spend, adults, particularly the older generation, are better able to indulge in hobbies and leisure activities, such as collecting, which is on the rise. Assuming current population trends continue, the grown-up toy segment should grow exponentially in the years ahead. The 35-to-54 and over-65 segments are forecast to be the only age groups to register population increases over the next 10 years.
Nostalgia and rekindling childhood experiences are key drivers
In the US, one of the bright spots in the toy market is the grown-up toy segment, which is expected to grow as the adult demographic gets older. One of the more common strategies adopted in the US is for companies to reap profits from film and television tie-ins by constantly regrouping or retooling their products to hold on to customers as fans get older. Marketing experts say that, as adults hold on to their toys longer, children are setting them aside at an ever-earlier age, a phenomenon called “age compression.” Both ends of the spectrum aspire to relive or capture a teen culture, where everyone wants to have that “eternal youth.”
As a result, US toy companies are targeting the icons or symbols from baby boomers’ youth through sophisticated campaigns drawing on their nostalgia and their pocketbooks. For example, LEGO, the Cabbage Patch Kids, and Barbie have all in recent years celebrated key anniversaries and birthdays with huge celebrations and promotions. It demonstrates the great lengths that companies will go to in order to hold onto their fans who have rewarded them with deep and abiding loyalty.
Take for example the Adult Fans of LEGO, whose membership has been growing in the double digits and who represent a sophisticated international network that could rival any teen fan club. Because of such groups, manufacturers have retooled to produce more sophisticated versions of the products kids were buying in their first encounter with films such as Star Wars. One example from a few years ago is a Spiderman collectible action figure with more than 50 moveable joints, and a Star Wars sculpture with the fine detailing of an adult work of art. Experts say this is the type of workmanship that a child would not appreciate and is clearly targeted at adults.
Another product in the US that is exploiting adults’ nostalgia for their childhoods is High Roller, an adult version of the popular Big Wheel tricycle, which sells for around $60. Unlike the Big Wheel, the adult-targeted High Roller, which comes with an extra-cushy seat made with four inches of plush foam, fetches a rich $600. It comes complete with a bell, handle bar, and tassels. A relatively small company compared to other big names in the toy business, High Roller USA says it has already sold 300 units and plans to sell another 1,000 by the end of 2013.
The company’s sales pitch is to capture the “pure nostalgia for the trike that changed the suburban landscape in 1969.” But beyond nostalgia, there is another force at work: adult play. One industry expert says that one factor driving grown-up toy sales is “an interest in introducing more ‘play’ into our already stressed lives.” High Roller’s target market is men aged 35 to 45. The company says that some grandparents have ordered High Rollers for their adult children so they can ride along with their Big Wheel-pedaling kids.
Toy industry attitudes need to change
Yet in the majority of markets, the grown-up toy segment’s market share still remains on average below 10% of the total toy market. Industry analysts think it’s time for toy manufacturers to target older consumers with both products and marketing. With adults enjoying a considerably higher purchasing power, they represent a large untapped consumer base and huge profit potential.
When David Beckham, the world famous British footballer, told the press that he had ordered and built the LEGO Taj Mahal set when he was in Italy a few years ago, the product flew off the shelves immediately and still remains a highly collectible and hard-to-get item, selling for over $2,000. While this is an extreme case, toys targeting grown-ups don’t have to be astronomical to be profitable. LEGO’s Emporium, Fire Brigade and Pet Shop sets sell for between $150 and $200.
While children will remain the cornerstone of the global toys and games industry, adults are beginning to emerge as a demographic worth taking seriously. With a little more focus on the grown-up market, together with the right R&D, toy manufacturers should be able to expand and tailor their product offerings and marketing activities. Experts say the future for toy manufactures can be a bright one, provided they establish themselves in the right markets with the right products. Thinking outside the box when it comes to target demographics will be more important than ever in determining success.