Spielwarenmesse: Toy market Brazil: domestic toys brave the economic recession

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Brasilianische Kinderbetreuung


Toy market Brazil: domestic toys brave the economic recession

from Euromonitor International

Brazilian consumers are eager to follow the newest international trends regarding traditional toys, but with the stronger positions of domestic players and the natural barriers for imported products, many consumers shift to domestic products in place of international brands.

Brazilian consumers in general continue to be generous to their children, although their expenditure per purchase declined during a time of austerity.

Although it is quite common for adults to buy games and puzzles in many countries, especially within the European continent, in Brazil such sales are less common. Brazilian adults and teenagers are not as interested in table games and puzzles, but they are interested in collectibles such as model cars and action figures. Sales in Brazil are specifically concentrated on traditional toys and games for young children (population aged up to six) and pre-teens from 7-12 years old

Difficult economic situation in Brazil hardly affects toys

Distribution of toys and games in Brazil by format
Distribution of toys and games in Brazil by format (Illustration: Spielwarenmesse; Source: Euromonitor International)

Despite many categories containing non-essential products registering both value and volume declines due to the economic situation in Brazil, traditional toys were able to register a fairly good performance and outperformed industries such as consumer electronics, clothing and footwear. The driver behind the healthy performance was a mix of improved local productivity, new licensed products and a more price-focused portfolio.

Construction toys are one of the best-performing categories. Growth comes from a lower base compared to more-mature categories in Brazil, while construction toys registers a higher average unit price increase compared with other categories due to a dependence on imported goods. As a result, the strong value performance is based on price increases rather than higher volume sales in Brazil. The category will continue to benefit due to coming from a low base and is expected to increase in maturity over the forecast period. Despite a higher average price, construction toys are perceived as delivering a great deal of benefits to children regarding motor coordination and creativity, which may continue to encourage parents to purchase such products for their children.

Electronic components in traditional toys are gaining more of a presence in Brazil, and dominate certain categories such as remote control vehicles and scientific/educational toys.

Competitive landscape

Top 5 toy companies in Brazil; market shares in % (Illustration: Spielwarenmesse; Source: Euromonitor International)
Top 5 toy companies in Brazil; market shares in % (Illustration: Spielwarenmesse; Source: Euromonitor International)

[Translate to English:] Mattel do Brasil is one of the leading traditional toy companies in Brazil. Candide Indústria e Comércio continues to be the leading domestic company within traditional toys in Brazil, focusing its efforts on radio/remote control toys, other traditional toys and games, pre-school (3-4 year old) and scientific/educational toys. Candide Indústria e Comércio has agreements for brand usage with major international players such as Mattel, giving the company the advantage of using well-known brands to promote its products in Brazil.

In terms of new launches in Brazil, players within traditional toys continue to invest in stimulating creativity and practical experiences that may help the young generation to develop real life abilities in the near future, such as cooking, sewing and choosing a profession.

There are still opportunities within several product categories of traditional toys, but it is time for many industry players to rethink their strategies regarding product placement, portfolios and communication in order to diminish the impacts of the economic crisis on their overall sales.

Conjoint and cross-channel communication campaigns can be a way for brands of traditional toys and games to increase their presence, and this trend is likely to increase. Most of the top companies within traditional toys have robust communication and advertising campaigns running on the internet, not only through their own websites but also through retail partners and specialized blogs.

Brands & Licensing

Although international brands continue to attract Brazilian consumers, especially for traditional toys, local licenses continue to perform well in Brazil, generating interesting revenues for both the licensee and the licensers. One good example of a local brand performing positively in diverse categories is “O Show da Luna” (“Earth to Luna” in the US), which was initially a television show and then had its brand licensed to actual products. The brand tells the story of a little girl who loves science and develops her adventures in exploring the world.

Galinha Pintadinha continues to be one of the most important brands for young children (up to six years old), with the brand being present in several product categories, including traditional toys, school materials, and clothing and footwear. For pre-teens, international brands are still popular, such as Max Steel from Mattel do Brasil and Hello Kitty.

Actions such as creating and maintaining a page for a brand on Facebook, a YouTube channel and a website not only have an impact on the shopper (children) but also provide information and reinforce the brand’s positioning with the buyer (parents), increasing their security and comfort when purchasing products for their sons and daughters. One of the activities that also generates revenues for local licensed trademarks such as Galinha Pintadinha (Polka Dot Chicken) and Patati Patatá clowns are themed shows and presentations performed by professional actors, which are also advertised through online channels.

This is an extract from Euromonitor International’s Toys and Games in Brazil report. Find the complete report with further market research results here.

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Euromonitor International

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