How one of the largest toys distributor in KSA expanded their business into the online retail space and acquired a market share of ~3% in the first year of operations​

Background and Challenge
Client’s Background:
  • Client is already into business of distribution of toys. It wishes to foray into new segments such as B2C ( online and offline), and digital gaming and expand the existing product verticals. They want better understanding of major products, brands, challenges faced by stakeholders.
Requirements of the Client:
  • The client wanted better understanding of following markets-

a.Traditional Toys Market

b.Online Toys Market

c.Gaming Market

The client’s  wanted to gain insights into their position as distributors in the traditional toys market. They also seek a deeper understanding of the online toys market to assess their opportunities in the digital space. Additionally, they require a snapshot of the gaming industry to stay updated on the latest trends and developments.

  • Identify growth opportunities and competitive landscape to support strategic decision-making: By analyzing the current market dynamics, trends, and competitive landscape, including the market share of major brick-and-mortar and online players, as well as brands, distributors, hypermarkets, and departmental stores. They aim to identify potential growth opportunities and areas for expansion. This comprehensive understanding will enable them to devise effective strategies to outperform competitors and capitalize on emerging trends.
KSA Toys Market at Glance:
  • KSA Toys Market stands at SAR 6.1 billion and is poised to achieve a growth rate of >9% in the next five years
  • KSA Online Toys Market stands at SAR 1.0 billion and is poised to achieve a growth rate of >15% in the next five years
  • KSA Gaming Market stands at SAR 13.1 billion and is poised to achieve a growth rate of >15% in the next five years
  • Moderately competitive industry with global and domestic players entering the market, increasing the overall competition in the KSA Toys Market

Approach and Recommendations
Inception: Creating ecosystem and identifying stakeholders
  • Kick-off call for detailed discussion on scope of work
  • Creating Ecosystem for distributors, brands and retailers and segmenting ecosystem by brick-and-mortar, hypermarket, online players and departmental stores.
  • Creating initial level hypothesis about the industry
  • Identifying experts from the ecosystem for primary research
Execution: Market Sizing, Segmentation, Cross-Comparison, Cost Analysis and Forecasting
  • A comprehensive and methodical desk research was carried out, focusing on major Toy Distributors in KSA.
  • Public and proprietary databases referred as well as Industry Articles, Analyst Coverage, Annual Reports of companies reviewed.
  • Primary Research and Mystery Shopping conducted with Logistics Head, Marketing Managers, Operations Head and C-Level Executives of existing toys Distributors and Retailers.
  • Through the secondary and primary research, detailed analysis conducted on the segment-wise value chain as well as industry analysis covering latest trends and developments, regulatory landscape of the industry and challenges for new entrants.
  • Market size estimated using bottom-up approach and detailed picture on market segmentation prepared using inputs gathered through secondary and primary sources.
  • Detailed Cross Comparison of the both the industries prepared on the basis of operational and financial parameters of existing players
Closure: Identifying opportunities & providing recommendations
  • Identifying segment-wise potential.
  • TAM, SAM,SOM for KSA Toys Market and for Online Toys Market.
  • Analyzing and recommending how the client can leverage the increasing demand of certain toys categories client  and  how they can tailor their product offerings, marketing strategies, and distribution channels for the same.
  • Providing a recommendation on which distribution channel to utilize in order to increase the sales of the company.
  • Preparing and submitting the report to the client followed by presenting it to their management
Result and Conclusion
Understanding of Segment-wise Value Chain
  • The study conducted by Ken Research will help the client in understanding the market size of Major Distributors, Retailers and Brands in KSA Toys Market. This would help client in assessing offline and online toys markets and which market to target first.

Understanding of Market Attractiveness across Segments
  • Ken Research provided the client with the existing opportunity as well as the future growth potential of toys market. This will help the client in strategizing their business expansion plans.

Competition Scenario
  • Ken Research aided the client with a thorough understanding of the competitive landscape, allowing them to identify areas for differentiation and formulate effective strategies to stay ahead.

Business Impact
  • ~3%

    market share in online retail space

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