4 Jan 2017
Early Learning and Local Licensing Dominate Moscow Kids' Show
Despite on-going economic uncertainties, Russian parents continue to prioritise spending on early learning products, while the country's recently resurgent animation industry has spurred massive growth in the sale of licensed properties.
At any Russian trade show aimed squarely at children, it would be a fair bet that a bear or two would be roaming the aisles, while a stroller glittering with (presumably) fake diamonds would hardly cause a solitary eyebrow to be raised. As such, the 2016 edition of Moscow's Mir Detstva – Childhood World – certainly didn't disappoint.
Perhaps less expected, though, was the event's huge emphasis on early learning and the apparent determination on the part of many parents to jump-start their child's academic career almost before they'd been weaned. Although "Don't Save on Your Child" has long been a popular maxim in Russia, the current economic conditions, coupled with greater consumer awareness, has dictated a more conscious style of parenting. Russian mums and dads are no longer willing to buy just any old toys and accessories. Instead, they want to buy smarter toys and accessories, preferably items emblazoned with their child's favourite characters.
Throughout 2016, children's goods retailers struggled to come to terms with this new business environment. Overall, according to RBC Information Systems, a Moscow-based business news group, the past 12 months have been dominated by the continued decline of the rouble and uncertainties as to the extent and depth of Russia's economic woes.
Back a little further and 2015, too, was a difficult year for the Russian toy industry, with the overall volume of sales dropping by 8.3%, the first fall since 2009. Over the same period, prices shot up by 15.6%, a considerable rise over the 5.7% increase seen in 2014. Unsurprisingly, this hike in prices – coupled with a fall in disposable income levels and double-digit inflation – saw Russia's toy industry, along with a number of other sectors, face something of a crisis.
For 2016 as a whole, RBC predicts the sales volume of the toy and games' market will have shrunk by some 8-9% year-on-year. With regard to 2017, though, the company is more optimistic, expecting incomes to increase while inflation becomes a little more manageable. As a consequence, there is a belief that consumer confidence will improve and Russians will start buying again. Inevitably, this will set the toy market on the road to recovery, although there is no guarantee of a return to the pre-crisis level of spend.
All this doesn't mean, however, that Russians won't go all out when it comes to buying the perfect baby stroller. There's a real conviction among many Russian mothers that they are all but obliged to spend as much time as possible outdoors with their baby, regardless of the weather. This represents a real challenge given the less than pleasant conditions that prevail during the colder months.
As a consequence, the ideal stroller has to be close to a four-wheel drive in terms of functionality, but also testify to the parents' status and sense of style. That said, it's still occasionally possible to come across a more classic carriage, one with wheels that don't swivel and a permanently-attached bassinet.
This year, the show was home to an entire hallway of strollers, ranging from budget buggies to the celebrity-endorsed. One exhibitor particularly well-versed in the vagaries of the domestic market was Alexander Danilin, Head of Sales for the Anex Group, the Warsaw-based company that claims to be the world's second-largest designer and manufacturer of strollers.
Addressing the particular challenge facing his business, he said: "Russia has multiple regions and every one of them has different preferences with regard to strollers." In the case of his own company, its top sellers all tend to have light, foldable frames and – in seemingly a must for Russian parents – a coconut-filled mattress, something believed to be particularly beneficial to new-borns.
This year, Anex was looking to take things up a notch or two, introducing a range of strollers with flecks of silver in their organic-cotton linings, as well as an eco-leather that repels water, breathes and absorbs sunlight, all without fading. There was also the introduction of one special mums-requested feature – headlamps with LED bulbs.
Although the Soviet Union had a strong animation culture, virtually no cartoons were produced within its former boundaries during the 1990s. All that is changing, however, with a new wave of animated properties now dominating the screens of TVs and digital devices, resulting in a welter of fresh licensing opportunities.
Acknowledging the recent resurgence of the sector, Irina Mastusova, Managing Director of the Russian Animated Film Association, said: "The licensing market is a relatively new thing in Russia. It is, however, growing at an impressive rate, with animation brands proving to be a key part of it."
Taking an early lead in this field is the Animaccord Animation Studio, the Moscow-based company behind Masha and the Bear. By far the most popular animated series in Russia, the series follows the adventures of Masha, a young mischievous girl, and Bear, her best friend who is forever trying to keep her out of trouble.
Introduced in 2009, the brand's early licensing activity focussed on publishing and toys. By 2013, though, it had more than 100 licensees active across 50 product categories in Russia and many of the former Soviet republics.
Among its licensees is Ferrero, the Italian chocolate and confectionery manufacturer, with the company featuring the brand on its Kinder Surprise and Nutella ranges. Animaccord also appointed Simba Dickie, the German toy-manufacturing giant, as its master toy partner in Europe. This has resulted in the distribution of some 2.6 million Masha and the Bear branded toys across Europe and the MENA (Middle East and North Africa) region, representing sales worth about US$21 million. The series is also currently airing on Netflix in the US.
Providing an update on Annimaccord's current licensing strategy, Ilona Belous, the company's Licensing Manager, said: "Domestically, we're already present in just about every product category, while we're also enjoying strong international growth. At present, we are working with a number of new partners with regard to niche products in several high-tech categories."
Beyond Masha and her ursine accomplice, a number of other Russian animated properties are also starting to make serious headway in the licensing sector. Among the most serious of these new contenders is Fixiki (a family of tiny people who fix household appliances while living in them) Mi-Mi-Mishki (a troupe of animal friends) and Belka and Strelka (the first dogs in space).
To say that Russians are obsessed with early learning is a serious understatement. The current generation of parents, however, wants to do things a little differently, resulting in such terms as "fine motor skills" and "hyperactive syndrome" becoming the new currency at kindergarten gates.
These fresh pre-occupations saw the 2016 event introducing a new zone, one entirely devoted to extra-curricular education. Developed with support from the federal education development programme, this provided a showcase for virtual and augmented reality products, as well as a number of more conventional items. Particularly popular was Lego Education's Café+, which gives kids the opportunity to count and stack hamburger ingredients, as well as the Danish construction toy company's WeDo platform, an innovation designed to bring science to life.
Overall, one of the most high-profile exhibits in the zone's inaugural outing was Kidburg, a virtual town where young visitors can try their hand at a number of different professions. The show provided a taster of the full Kidburg experience, a hugely popular family attraction in St Petersburg.
Over on the showfloor proper, it was all but impossible to miss the array of sensory boards on offer, coming with a choice of locks and laces, colour and shape sorting options, interactive facilities and changeable parts. On the stand of Naivy Mir, a Kirov-based manufacturer, show attendees had the chance to explore the company's range of soft-felt books, including its Who Lives Where? series.
Explaining the concept, Evgenia Bannikova, the company's Co-founder, said: "All of the component parts – animals, trees and every other element – can be attached to a felt page via Velcro straps, making them easy to move around while developing stories. This really helps children when they are learning to speak and interact."
Among the company's top sellers is a series featuring characters of a number of different nationalities, a valuable learning concept in many of Russia's larger cities.
Over on the Cosmic Sand stand, many adults found themselves unable to resist playing with the company's soft and moldable kid-friendly putty, a substance said not to stick to hands and – more importantly – walls. Stanislav Kuklov, a Sales Executive with Volshevni Mir, the St Petersbug manufacturer behind Cosmic Sand, sees this apparently simple product as having a surprisingly wide range of applications.
He said: "Our moldable, quartz-based sand has been on the market for a few years now and we've come up with a number of variations that let parents and kids explore together in new ways. There is, for instance, our Treasure Hunt set, where you have to find special shapes and follow a treasure map.
"Specifically targetted at girls, we recently launched a baking set, complete with pink, strawberry-scented sand. There's also an archeological dig set with assemblable skeletons and an interstellar set featuring glow-in-the-dark sand."
If Cosmic Sand didn't provide a sufficiently tactile experience, the company also had on offer Angel Clay, which has a marshmallow-like texture. One buyer clearly enamored with the product was Olga Timofeeva, the proprietor of an early learning store in the East Russian city of Saratov.
Explaining its appeal she said: "These sensory materials are a boost for the imagination and help children to develop. Equally importantly, kids can safely play with them on their own, something that is always welcomed by parents."
Mir Detstva 2016 took place at the ExpoCenter in Moscow from 26-30 September. The event attracted 528 exhibitors from 26 countries.
Anna Huddleston, Special Correspondent, Moscow