Hasbro, the world’s second-largest toy maker, opened a Moscow office on Wednesday, calling Russia one of its “key markets” as demand for toys and games grows.
Russia generated about 2 percent of Hasbro’s sales in Europe last year and the company expects that share to “grow significantly,” said John Harper, Hasbro’s president for Europe.
“The reason we can grow business here much faster than in mature markets is that the economy is expanding and because of people’s ability to buy so-called branded toys,” he said.
Russia’s 13.9 trillion ruble ($461 billion) retail industry grew 28 percent last year, fueled by higher wages and consumer spending, according to Renaissance Capital. Growth will slow to 16 percent this year as the credit crunch discourages consumers, the bank said in a Sept. 14 report.
Hasbro estimates that Russia’s annual retail market for toys and games is worth $1.5 billion, of which the company had as much as 3 percent in 2008, said Tomasz Micek, Hasbro’s Russia chief. The global toys and games market is worth about $60 billion a year based on wholesale prices, said Henk Suelmann, the company’s head of emerging markets.
Hasbro “is determined to become the market leader in Russia,” Suelmann said.
The toy maker has run 12 television commercials this spring in Russia and plans another 20 by the end of the year, Micek said.
Besides television, which is Hasbro’s “key communication tool” in the country, the company plans to push magazine and Internet promotions, he said, declining to say how much Hasbro will spend on marketing.
Hasbro has a so-called third-party production facility in the country’s Far East where it has a contract with a local producer to make toys and games, Harper said. The company has no plans for its own plant in Russia “at this stage,” he added.
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