MarketLineIC EuropeToysGames 280820 PDF

MarketLine Industry Profile
Toys & Games in Europe

January 2020
Reference Code: 0201-0778
Publication Date: January 2020
WWW.MARKETLINE.COM
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AND IS NOT TO BE PHOTOCOPIED
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Industry Profiles
1. Executive Summary
1.1. Market value

The European toys & games market grew by 1% in 2018 to reach a value of $25.8 billion.
1.2. Market value forecast

In 2023, the European toys & games market is forecast to have a value of $29.4 billion, an increase of 14% since 2018.
1.3. Geography segmentation

The United Kingdom accounts for 20.5% of the European toys & games market value.
1.4. Market rivalry

The fact that this market is fragmented, with a number of large multinational retailers operating alongside smaller
independent retailers, intensifies the rivalry level.
1.5. Competitive Landscape

Overall, the European toys & games market has been growing moderately in recent years and growth is projected
over the forecast period at an accelerated rate. However, Brexit is still taking its toll on retail and the current mood on
the UK high street. Consumer confidence and fluctuations in the pound as a result of Brexit uncertainty would be
major issues for the toy market, alongside technical issues such as traceability requirements on toy manufacturing.
For example, Denmark based Lego, sends products to the UK primarily from its factory in the Czech Republic. It also
has factories in China and Mexico. The company will have to put a number of plans in place with retailers, depending
on the outcome of Brexit.

Industry Profiles
TABLE OF CONTENTS
1. Executive Summary 2
1.1. Market value ................................................................................................................................. 2
1.2. Market value forecast ...................................................................................................................2
1.3. Geography segmentation .............................................................................................................2
1.4. Market rivalry ................................................................................................................................ 2
1.5. Competitive Landscape ................................................................................................................2
2. Market Overview 7
2.1. Market definition ........................................................................................................................... 7
2.2. Market analysis ............................................................................................................................ 7
3. Market Data 9
3.1. Market value ................................................................................................................................. 9
4. Market Segmentation 10
4.1. Geography segmentation ...........................................................................................................10
4.2. Market distribution ......................................................................................................................11
5. Market Outlook 12
5.1. Market value forecast .................................................................................................................12
6. Five Forces Analysis 13
6.1. Summary .................................................................................................................................... 13
6.2. Buyer power ............................................................................................................................... 15
6.3. Supplier power ........................................................................................................................... 16
6.4. New entrants .............................................................................................................................. 18
6.5. Threat of substitutes ...................................................................................................................20
6.6. Degree of rivalry .........................................................................................................................21
7. Competitive Landscape 23
7.1. Who are the leading players?.....................................................................................................23
7.2. What strategies do the leading players follow? ..........................................................................23

Industry Profiles
7.3. Has there been any recent MA activity?.....................................................................................24
7.4. How have online retailers affected traditional bricks and mortar toy stores? .............................24
8. Company Profiles 26
8.1. Amazon.com, Inc........................................................................................................................26
8.2. Carrefour SA .............................................................................................................................. 30
8.3. El Corte Ingles, SA .....................................................................................................................35
8.4. Smyths Toys Ltd.........................................................................................................................37
9. Macroeconomic Indicators 39
9.1. Country data ............................................................................................................................... 39
Appendix 41
Methodology............................................................................................................................................ 41
9.2. Industry associations ..................................................................................................................42
9.3. Related MarketLine research .....................................................................................................42
About MarketLine .................................................................................................................................... 44

Industry Profiles
LIST OF TABLES
Table 1: Europe toys & games market value: $ billion, 2014–18 9
Table 2: Europe toys & games market geography segmentation: $ billion, 2018 10
Table 3: Europe toys & games market distribution: % share, by value, 2018 11
Table 4: Europe toys & games market value forecast: $ billion, 2018–23 12
Table 5: Amazon.com, Inc.: key facts 26
Table 6: Amazon.com, Inc.: Annual Financial Ratios 28
Table 7: Amazon.com, Inc.: Key Employees 29
Table 8: Carrefour SA: key facts 30
Table 9: Carrefour SA: Annual Financial Ratios 32
Table 10: Carrefour SA: Key Employees 33
Table 11: Carrefour SA: Key Employees Continued 34
Table 12: El Corte Ingles, SA: key facts 35
Table 13: El Corte Ingles, SA: Key Employees 36
Table 14: Smyths Toys Ltd: key facts 37
Table 15: Smyths Toys Ltd: Key Employees 38
Table 16: Europe size of population (million), 2014–18 39
Table 17: Europe gdp (constant 2005 prices, $ billion), 2014–18 39
Table 18: Europe gdp (current prices, $ billion), 2014–18 39
Table 19: Europe inflation, 2014–18 39
Table 20: Europe consumer price index (absolute), 2014–18 40
Table 21: Europe exchange rate, 2014–18 40

Industry Profiles
LIST OF FIGURES
Figure 1: Europe toys & games market value: $ billion, 2014–18 9
Figure 2: Europe toys & games market geography segmentation: % share, by value, 2018 10
Figure 3: Europe toys & games market distribution: % share, by value, 2018 11
Figure 4: Europe toys & games market value forecast: $ billion, 2018–23 12
Figure 5: Forces driving competition in the toys & games market in Europe, 2018 13
Figure 6: Drivers of buyer power in the toys & games market in Europe, 2018 15
Figure 7: Drivers of supplier power in the toys & games market in Europe, 2018 16
Figure 8: Factors influencing the likelihood of new entrants in the toys & games market in Europe, 201818
Figure 9: Factors influencing the threat of substitutes in the toys & games market in Europe, 2018 20
Figure 10: Drivers of degree of rivalry in the toys & games market in Europe, 2018 21

Industry Profiles
2. Market Overview
2.1. Market definition

The toys & games market includes retail sales of action figures, activity toys, dolls, games, infant and baby toys,
miniature models, plush toys, puzzles, ride-on model toys, and toy vehicles.
Any currency conversions used in the creation of this report have been calculated using constant 2018 annual average
exchange rates.
For the purposes of this report, the global market consists of North America, South America, Europe, Asia-Pacific,
Middle East, South Africa and Nigeria.
North America consists of Canada, Mexico, and the United States.
South America comprises Argentina, Brazil, Chile, Colombia, and Peru.
Europe comprises Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy,
Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland, Turkey, and the United Kingdom.
Scandinavia comprises Denmark, Finland, Norway, and Sweden.
Asia-Pacific comprises Australia, China, Hong Kong, India, Indonesia, Kazakhstan, Japan, Malaysia, New Zealand,
Pakistan, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam.
Middle East comprises Egypt, Israel, Saudi Arabia, and United Arab Emirates.
2.2. Market analysis

The European toys & games market has been growing moderately in recent years however 2018 saw the market
decelerate slightly. Moderate growth is projected over the forecast period.
The largest market in this region is the UK, followed by France and Germany. These markets are fairly mature. What’s
more, growth in much of Europe is being constrained to an extent by the growing prevalence of digital alternatives
including games consoles, tablets, and mobile phone apps. In 2018, games software for games consoles, tablets, PCs,
and mobile phones generated revenues of $12bn in this region, around 47% of the size of the traditional toys & games
market.
The European toys & games market had total revenues of $25,835.0m in 2018, representing a compound annual
growth rate (CAGR) of 2.1% between 2014 and 2018. In comparison, the German and UK markets grew with CAGRs of
3.1% and 3.1% respectively, over the same period, to reach respective values of $3,802.5m and $5,301.7m in 2018.
There has been a growth in the sale of collectible toys, such as LOL Surprise products and trading cards (including the
Pokémon Trading Card Game), which have seen sales soar. The growth of such products has been aided by the
increasing engagement of children with social media videos, particularly YouTube, which feature the opening of
collectible toys/cards and regularly attract millions of views.
Hypermarkets, supermarkets and Hard discounters account for the largest proportion of sales in the European toys &
games market in 2018, sales through this channel generated $4,049.7m, equivalent to 15.7% of the market's overall
value. Sales through the online pureplay generated revenues of $3,580.2m in 2018, equating to 13.9% of the market's
aggregate revenues.
Contributing to this rise is a shift in retail attitudes, which allows supermarkets to be considered by the consumer for
toys and games where previously the company would be mainly associated with food products. Consumers are now
able to shop for toys whilst buying their groceries and household items.

Industry Profiles
Moreover, more consumers are purchasing toys and games online. According to Ecommerce Europe, the European
online retail sector continues its growth in 2019, after an increase in turnover by 11.87% to EUR 547bn (approx.
$606bn) in 2018.
The performance of the market is forecast to accelerate, with an anticipated CAGR of 2.7% for the five-year period
2018 - 2023, which is expected to drive the market to a value of $29,449.7m by the end of 2023. Comparatively, the
German and UK markets will grow with CAGRs of 2.8% and 4.6% respectively, over the same period, to reach
respective values of $4,358.2m and $6,622.8m in 2023.
Moderate growth will continue in the European toys & games market driven by more opportunities for franchised and
technology led items and an increase in online shopping. LEGO Fusion, for example, allows players to combine brick
building with digital game play, helping to keep the interest of children that prefer to play digitally.
Moreover, this market will remain in growth driven by new toy releases linked to popular upcoming movies such as
The Incredibles 2, which was released in 2018, Toy Story 4 (2019), Frozen 2 (2019), The Lego Movie 2 (2019), and How
to Train Your Dragon 3 (2019).
However, political turmoil in countries such as Italy and Brexit looming in the UK is still taking its toll on retail and the
current mood on the high street.

Industry Profiles
3. Market Data
3.1. Market value

The European toys & games market grew by 1% in 2018 to reach a value of $25.8 billion.
The compound annual growth rate of the market in the period 2014–18 was 2.1%.
Table 1: Europe toys & games market value: $ billion, 2014–18
Year $ billion € billion % Growth

2014 23.8 20.2
2015 24.4 20.7 2.5%
2016 25.0 21.2 2.4%
2017 25.6 21.7 2.3%
2018 25.8 21.9 1.0%
CAGR: 2014–18 2.1%
SOURCE: MARKETLINE MARKETLINE
Figure 1: Europe toys & games market value: $ billion, 2014–18

Industry Profiles
4. Market Segmentation
4.1. Geography segmentation

The United Kingdom accounts for 20.5% of the European toys & games market value.
France accounts for a further 15.2% of the European market.
Table 2: Europe toys & games market geography segmentation: $ billion, 2018
Geography 2018 %
United Kingdom 5.3 20.5
France 3.9 15.2
Germany 3.8 14.7
Italy 2.4 9.5
Spain 1.4 5.3
Rest of Europe 9.0 34.7
Total 25.8 99.9%
Figure 2: Europe toys & games market geography segmentation: % share, by value, 2018

Industry Profiles
4.2. Market distribution

Hypermarkets, Supermarkets and Hard Discounters form the leading distribution channel in the European toys &
games market, accounting for a 15.7% share of the total market's value.
Online Pureplay accounts for a further 13.9% of the market.
Table 3: Europe toys & games market distribution: % share, by value, 2018
Channel % Share
Hypermarkets, Supermarkets and Hard Discounters 15.7%
Online Pureplay 13.9%
Department Stores 4.6%
Music, Video, Book & Software Specialists 4.1%
Other 61.7%
Total 100%
Figure 3: Europe toys & games market distribution: % share, by value, 2018

Industry Profiles
5. Market Outlook
5.1. Market value forecast

In 2023, the European toys & games market is forecast to have a value of $29.4 billion, an increase of 14% since 2018.
The compound annual growth rate of the market in the period 2018–23 is predicted to be 2.7%.
Table 4: Europe toys & games market value forecast: $ billion, 2018–23
Year $ billion € billion % Growth

2018 25.8 21.9 1.0%
2019 26.5 22.4 2.4%
2020 27.2 23.1 2.9%
2021 28.0 23.7 2.8%
2022 28.7 24.3 2.7%
2023 29.4 24.9 2.4%
CAGR: 2018–23 2.7%
Figure 4: Europe toys & games market value forecast: $ billion, 2018–23

Industry Profiles
6. Five Forces Analysis

The toys & games market will be analyzed taking toys and games retailers as players. The key buyers will be taken as
individual end consumers, and toys and games manufacturers as the key suppliers.
6.1. Summary
Figure 5: Forces driving competition in the toys & games market in Europe, 2018
The fact that this market is fragmented, with a number of large multinational retailers operating alongside smaller
independent retailers, intensifies the rivalry level.
The buyers in this market are end-consumers. This significantly weakens buyer power; the loss of any one buyer’s
custom is unlikely to have a significant effect on a player’s revenues. Additionally, the standing of any individual
customer is diminished because of the sheer volume of potential customers. However, when taken as a collective, the
lack of switching costs and the tendency to switch between whoever provides the best deal increases buyer power,
particularly when it comes to popular toys.
The size of toy manufacturers ranges from smaller companies, specializing in specific toys and/or games, to large
corporations such as Hasbro and Mattel that produce and market a wide variety of products. These larger
corporations experience higher supplier power, as the loss of a contract with such a supplier could affect players’
revenues. A significant feature of the large toy manufacturers in this market is their acquisition of brands. Acquiring a
popular brand can have a huge impact on supplier power, with manufacturers who acquire the most popular brands
possessing significant power.
Low cost switching for buyers and the relative ease of access to both buyers and suppliers makes market entry
relatively simple. However, there exists a high level of product differentiation, so newcomers may find it harder to
attract buyers away from existing incumbents. Additionally, the strength of incumbent brands may prove a difficult
entry barrier to overcome.
The most significant substitute to the toys and games market is digital alternatives including games consoles, tablets,
and mobile phone apps. These substitutes are becoming more prevalent in an increasingly digital age. Children now
have grown up surrounded by digital media. Consoles, PCs, tablets, and mobile phones are playing an ever growing
part in children's lives by providing games, education and entertainment.

Industry Profiles
Some market players, primarily specialized toy retailers, are highly dependent on revenues from toy and game sales.
These players experience increased rivalry, as players must be profitable within that particular market at all times.

Industry Profiles
6.2. Buyer power

Figure 6: Drivers of buyer power in the toys & games market in Europe, 2018
The buyers in this market are end-consumers. This significantly weakens buyer power; the loss of any one buyer’s
custom is unlikely to have a significant effect on a player’s revenues. Additionally, the standing of any individual
customer is diminished because of the sheer volume of potential customers.
Furthermore, the fact that there are many different types of toys for different ages, sexes and interests means the
high degree of differentiation found in the toys and games market works against buyer power, as toy shops can tailor
their offerings regardless of price knowing there is a market for their products.
However, when taken as a collective, the lack of switching costs and the tendency to switch between whoever
provides the best deal increases buyer power, particularly when it comes to popular toys. This is impeded somewhat
by the issue of price sensitivity, which becomes less of an issue when toys and games are purchased during the
holiday season or for special occasions such as birthdays. This is particularly prevalent for ‘must have’ toys which tend
to change year to year. However, generally price sensitivity is high in this market. Consumers have actually become
increasingly price sensitive given the rise of e-commerce and the ability to search online for the cheapest option.
Online pureplay retailers now account for over 13% of sales in this region. Sales through such retailers in the Danish,
Finnish, and German markets are significantly higher than the regional average, standing at 18%, 14.7%, and 19.4%
respectively.
Players can attempt to increase customers’ likelihood to return with loyalty schemes. For example, in Europe,
Carrefour is a leading player of toys & games in this market; Carrefour offers MyCLUB loyalty card. What’s more,
online retailers may encourage consumers through fast delivery. For example, consumers with Amazon Prime
membership, which operates in a variety of European markets including France, Germany, the UK, and Italy, benefit
from fast, free delivery on many items, which is likely to entice such consumers to purchase toys & games from this
retailer. Discouraging movement across retail outlets can reduce consumer mobility which, in the long term, can
weaken buyer power.
The likelihood of end consumers integrating backward and making their own toys is unlikely, although not impossible,
due to the popularity of arts and crafts hobbies and websites, such as Etsy and Pinterest. It is, however, impossible for
market players to forward integrate due to their position in the supply chain. Despite being inherently a part of
childhood, toys and games are not vital goods and this tends to increase buyer power somewhat as customers can
forego the products in times of financial adversity.
Overall, buyer power is assessed as moderate.

Industry Profiles
6.3. Supplier power

Figure 7: Drivers of supplier power in the toys & games market in Europe, 2018
The size of toy manufacturers ranges from smaller companies, specializing in specific toys and/or games, to large
corporations such as Hasbro and Mattel that produce and market a wide variety of products. These larger
corporations experience higher supplier power, as the loss of a contract with such a supplier could affect players’
revenues. They tend to fuel demand for their toys through extensive marketing activities often resulting in the large
companies producing the ‘must have’ toys.
A significant feature of the large toy manufacturers in this market is their acquisition of brands. Acquiring a popular
brand can have a huge impact on supplier power, with manufacturers who acquire the most popular brands
possessing significant power. The larger manufacturers such as Mattel and Hasbro tend to have the licensing rights to
popular brands made famous by television, film or book, such as Marvel, DC, Star Wars or Transformers.
Hasbro has seen its power surge in recent times, leaving Mattel struggling somewhat. Hasbro managed to win a deal
to manufacture Disney Princess toys in 2014, taking the rights from Mattel. At the time, Mattel had valued its Disney
Princess business at $300m. Hasbro has continued to make key acquisitions. In 2018, the toy manufacturer entered a
$522m agreement to acquire Saban’s Power Rangers and a range of other entertainment brands including My Pet
Monster, Popples, and Treehouse Detectives. Furthermore, Hasbro announced in August 2019, that it has agreed to
buy Entertainment One in a $4 billion deal. The toy giant's takeover of the "Green Book" and "The Hunger Games"
distributor promises to boost its brand portfolio, accelerate its growth, and give it access to a $2 billion content
library. Buying Entertainment One will add children's cartoon franchises such as Peppa Pig and PJ Masks - which
generated $2.5 billion in retail sales last year.
There has been a lot of talk in the past year or two of Hasbro potentially acquiring Mattel, which has suffered
financially in recent times. However, Mattel refused an offer by Hasbro in 2017, but rumors surrounding a potential
deal still persist. As such, at present, Hasbro possesses significant supplier power as major toy retailers would see
their sales drop significantly without Hasbro products.
While toy retailers are reliant on the large toy manufacturers in this market, the situation is similar when reversed.
The likes of Hasbro and Mattel are reliant on the leading players for much of their revenues. This is evident in the
impact that the collapse of toy retailer Toys ‘R’ Us has had on these suppliers. It is estimated that Hasbro generated
around 9% of its revenue from the retailer. asbro Inc. reported a 13% decline in sales during the holiday season, the
latest indication of how toy makers struggled following last year’s liquidation of Toys “R” Us. Rival Mattel Inc. also
reported a drop in sales for 2018’s final quarter, down 5%. As such, supplier power is impeded to an extent in this
respect.

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Many retailers are unlikely to backward integrate into manufacturing toys and games. However this is not impossible,
with now defunct retailer Toys ‘R’ Us being an example. Similarly, retailers Hamleys and The Entertainer manufacture
and sell a range of own-branded toys and games, while Walmart has a range of 1,000 toys that are exclusive to the
retailer. This backward integration significantly impacts supplier power, as does the low switching costs for retailers.
However, suppliers are able to forward integrate, particularly through online sales, and this helps to negate this
impact. A successful example of forward integration includes the Lego stores.
Retailers are dependent on providing popular products and products of high quality and this, coupled with the high
level of product differentiation in the market, boosts supplier power. Government regulation is strict as toys must
pass certain safety tests in order to be sold. Products that have been deemed unsafe after sale are often recalled
which can impact heavily on not only retailers' revenues and brand reputation but also the suppliers. In March 2017,
Kids II recalled 680,000 rattles due to a potential choking hazard. In April 2019, the Consumer Protections Safety
Commission issued the recall of 36 Kids II rocking sleeper models, which affects 694,000 units sold. The move came
just two weeks after Fisher-Price recalled five million of its similar Rock 'n Play sleepers, which were linked to at least
32 baby deaths over the last 10 years.
Supplier power in the toys and games market is assessed as moderate overall.

Industry Profiles
6.4. New entrants

Figure 8: Factors influencing the likelihood of new entrants in the toys & games market in Europe, 2018
Low cost switching for buyers and the relative ease of access to both buyers and suppliers makes market entry
relatively simple. However, there exists a high level of product differentiation, so newcomers may find it harder to
attract buyers away from existing incumbents. Additionally, the strength of incumbent brands, such as Carrefour and
Amazon, may prove a difficult entry barrier to overcome.
Entry on a small scale is achievable – targeting niche markets (i.e. crafts or traditional wooden toys) or stocking the
latest tech-savvy toys for teens can be lucrative options. However, such strategies may prove difficult to compete
effectively with established brands and retailers of considerable size who benefit from economies of scale. Entering
via a cheaper price point is a viable option, particularly if done exclusively online due to lower fixed costs. However, an
additional capital outlay would be required to cover lower profit margins and loss leaders. Relatively high fixed costs
in the form of sales and storage space in shops, staff, and delivery costs can be obstacles to entry and fast expansion;
however, online operations generally tend to involve lower costs and can be an effective alternative strategy.
However, any new players in that arena would need to compete with Amazon, which is a major player in Europe.
In recent years plastic toys have come under scrutiny as many countries are committing to reduce the amount of
plastic waste that they produce. An Ellen MacArthur Foundation report has claimed that, by 2050, there will be more
plastic waste in the sea than fish by weight. Plastic is one of the most widely used materials in the manufacture of toys
and games but unfortunately much of it eventually ends up at a landfill. Certain components in toys and games use
technical plastics like polyamide, polycarbonate or polymethyl methacrylate. These tend to have a short life span and
cannot usually be reused so are thrown away. With the production of toys and games being very plastic heavy,
increasingly strict regulation on its use could be detrimental to the market, especially for smaller companies that
cannot afford to pump money into research of biodegradable materials. Bioplastics, which are made wholly or in part
from organic matter rather than oil, could be one solution in the market and some toymakers are replacing their
traditional materials in order to become more environmentally friendly. One US based company, Green Dot
Bioplastics, is actively working with manufacturers of toys and games to introduce different biodegradable plastic
alternatives into the manufacturing stage of this market. This can however, be costly especially for new entrants.
Hasbro has also claimed that it will start using plant-based bio-polyethylene terephthalate (PET) to produce the
packaging for its products starting from 2019.
One rising distribution channel in recent years has been supermarket and hypermarket retailers, who, because of their
bulk buying power are able to capture an increasingly large section of the market that requires more budget items.
This channel accounted for almost 16% of sales in this market in 2018. Also contributing to this rise is a shift in retail

Industry Profiles
attitudes, which allows supermarkets to be considered by the consumer for toys and games where previously the
company would be mainly associated with food products. Consumers are now able to shop for toys whilst buying their
groceries and household items. This can be enticing especially as there is no need for consumers to go to specialist
retailers because they are able to do their entire shopping under one roof.
The exit of Toys ‘R’ Us from the market opens up possibilities for potential new entrants. The company was a leading
player in this market prior to its demise. However, while this will offer entry opportunities to an extent, it is likely that
many of the leading players will expand aggressively to take the share left by Toys ‘R’ Us.
There are a number of stringent regulations and safety tests that toys must pass and this may act as a deterrent to
new entrants. For example, members of the European Union, manufacturers and distributors must comply with the
EU Toy Safety Directive, published in 2009. This came into force in two phases; physical requirements in July 2011, and
chemical requirements in July 2013. From design and production, to the final product in store, toys must meet and
demonstrate compliance to a complex combination of requirements.
Interactive toys are becoming increasingly popular and new entrants that can utilize the latest technologies are likely
to thrive. Toys that have an extra dimension on an app, for example, are doing well because they bridge the gap
between real life and toys. There is an increasing realization, however, that children are spending too much time on
digital devices so the sale of traditional toys and games can be boosted by parents trying to dissuade their children
away from these.
Advertising through social media, particularly on YouTube, is becoming increasingly popular and items such as
Shopkins and LOL Surprise Dolls are unlikely to have become a hit if it was not for these videos. The top toy review site
on YouTube, ‘Fun Toys Collector Disney Toys Review’, has over 10 million subscribers.
The European market has been growing moderately in recent years, which is likely to entice new entrants. Turkey, the
Czech Republic and Poland are the areas with the highest growth in recent years while the Danish and Dutch markets
have had negligible growth.
Overall, the threat of new entrants is assessed as moderate.

Industry Profiles
6.5. Threat of substitutes

Figure 9: Factors influencing the threat of substitutes in the toys & games market in Europe, 2018
The most significant substitute to the toys and games market is digital alternatives including games consoles, tablets,
and mobile phone apps. These substitutes are becoming more prevalent in an increasingly digital age. Children now
have grown up surrounded by digital media. Consoles, PCs, tablets, and mobile phones are playing an ever growing
part in children's lives by providing games, education and entertainment.
Despite not providing a cheaper alternative on the whole, digital and video games are becoming more popular to the
detriment of traditional toys and games, where customer loyalty is low with minimal switching costs. Smartphone
penetration rates are on the increase in this region with France, Germany, and the UK reaching 76%, 78%, and 82%
respectively in 2018. In Russia, internet penetration rates have risen from 68% in 2013 to 75% in 2018. In 2018, games
software for games consoles, tablets, PCs, and mobile phones generated revenues of $12.1bn in this region, around
47% of the size of the traditional toys & games market. This trend towards video games and electronics will continue
to take consumer spend away from traditional toys & games in the coming years as technology and innovation
continue to develop.
Another option is purchasing second-hand toys from charity shops and internet sites such as eBay or making toys from
scratch. These would likely be a lower cost option. However, children with more affluent parents still provide a stable
source of revenue for more traditional toys and games. Counterfeit toys can be a significant threat to the revenues of
manufacturers with seizures by customs not uncommon. Toys accounted for 14% of goods detained by EU customs
officials, the second largest category behind cigarettes; nearly 3.8 million potentially dangerous fake toys were seized
in 2018.
There is a growing trend towards giving experiences and days out as gifts rather than buying toys & games; however,
this is unlikely to become a complete substitute in this market.
The threat of substitutes is assessed as strong overall.

Industry Profiles
6.6. Degree of rivalry

Figure 10: Drivers of degree of rivalry in the toys & games market in Europe, 2018
The toys and games market is fairly fragmented, with numerous players present, boosting competition within the
market. However, there are some large incumbents, such as Amazon and Carrefour, which operate globally and
benefit from economies of scale, allowing them to compete more intensely on price.
Some market players, primarily specialized toy retailers such as Smyths, are highly dependent on revenues from toy
and game sales. These players experience increased rivalry, as players must be profitable within that particular market
at all times. One particular retailer that has fallen victim to this is Toys ‘R’ Us. This retailer was the leading player in
this market but closed down all of its stores in the UK in 2018 following bankruptcy. The exit of Toys ‘R’ Us from the
UK market eases competitive pressures on other retailers to an extent. However, the existing leading players in the UK
market are keen to seize the share of the market left behind by the demise of this retailer. The Entertainer in
particular has benefitted from the demise of Toys ‘R’ Us; for its financial year ending January 28 2019, the toy retailer
recorded a 31% year-on-year surge in profits. Its online platform reported a 38% year-on-year sales increase.
In other parts of Europe, such as France and Spain, Toys ‘R’ Us is still in operation due to buy outs from investment
firms. However, the toy retailer in these countries has been significantly affected by the collapse of its parent
company and is not as competitive as it once was. In April 2018, Irish toy retailer Smyths Toys signed a deal to acquire
all Toys ‘R’ Us stores in Germany, Austria and Switzerland. This has involved the company taking over 93 stores and
four online stores, giving the company a significant competitive advantage as it enters mainland Europe.
In the UK price is a key point of competition, with many consumers being price sensitive. This is evidenced by the rise
in sales of toys through discount chains in this market such as B&M, Aldi, The Works, and Home Bargains. B&M has
now entered the top 10 leading toy retailers in the country, growing its share to almost 3% of the market. Conversely,
for retailers that do not wish to compete on price, focusing on customer experience can be a key strategy. For
example, Hamleys – while not amongst the leading retailers – sees success through this strategy in various European
countries. The retailer offers an exciting and engaging experience for children, resulting in consumers spending longer
in the store.
The dominance of Amazon in this market is hard to compete with. This retailer sees significant customer loyalty,
largely driven by its Amazon Prime offering. The broad range of toys & games available from the retail giant, along
with its competitive pricing and delivery subscription makes for a formidable incumbent.
In Russia, the dominance of two major online retailers, Wildberries and Ulmart, in this market makes it hard for other
online pureplay retailers to compete with. These retailers are dominant in Russia; Ulmart operates in 240 cities.

Industry Profiles
Ulmart has invested in 46 urban fulfilment centers located in the major Russian cities that stock the most popular
products, enabling the company to offer efficient delivery, which other retailers will struggle to compete with.
Similarly, Wildberries has heavily invested in logistics to overcome the difficulties with operating in such a large
country.
Turkey is currently seeing a number of international retailers enter its toys and games market, which has the potential
to significantly increase the rivalry level. For example, Lego opened its first store in Turkey in 2018, while Amazon
began e-commerce operations in the country in the same year.
Department stores, supermarkets and retailers such as Carrefour and Tesco, being less dependent than specialized
stores due to the wide variety of goods they stock, experience decreased rivalry as variations in the performance of
one market are easier to cope with. These players are also able to reduce their profit margins, competing largely on
price, creating a significant threat to specialized toy stores and further increasing rivalry.
Exit barriers are not a huge issue in this market due to the relative ease with which players can divest their assets,
such as retail units and fixtures and fittings, which can be used across a number of industries. The tendency for
customers to move between toys and games vendors coupled with low switching costs, also serves to increase
competition. Furthermore, 'Black Friday', sees retailers slash prices on a variety of goods including toys and games in
the run-up to Christmas, leading to chaotic scenes at retailers. As a result, it is easy for customers to move from one
retailer to another based on price and this boosts the intensity of rivalry. The popularity of many toys and games is
short-lived and/or seasonal, which means the retail market is subject to rapid change, further boosting rivalry.
Overall, the degree of rivalry is strong.

Industry Profiles
7. Competitive Landscape
Overall, the European toys & games market has been growing moderately in recent years and growth is projected
over the forecast period at an accelerated rate. However, Brexit is still taking its toll on retail and the current mood on
the UK high street. Consumer confidence and fluctuations in the pound as a result of Brexit uncertainty would be
major issues for the toy market, alongside technical issues such as traceability requirements on toy manufacturing.
For example, Denmark based Lego, sends products to the UK primarily from its factory in the Czech Republic. It also
has factories in China and Mexico. The company will have to put a number of plans in place with retailers, depending
on the outcome of Brexit.
Moreover, the most significant threat to the toys and games market is digital alternatives including games consoles,
tablets, and mobile phone apps. These substitutes are becoming more prevalent in an increasingly digital age.
Children now have grown up surrounded by digital media. Consoles, PCs, tablets, and mobile phones are playing an
ever growing part in children's lives by providing games, education and entertainment. In 2018, games software for
games consoles, tablets, PCs, and mobile phones generated revenues of $3.5bn in the UK, around 66% of the size of
the traditional toys & games market. This trend towards video games and electronics will continue to take consumer
spend away from traditional toys & games in the coming years as technology and innovation continue to develop.
7.1. Who are the leading players?

Amazon.com, Inc. is an online retailer. The company offers a range of products and services through its trademark e-
commerce site, amazon.com. It is the world’s largest retailer with nearly 200 million unique monthly visits. The online
giant has a strong foothold in the UK and many specialist retailers such as Toys R Us have felt the effects of Amazon’s
expansion into the UK market. Amazon amassed £7 billion (approx. $9bn) in UK turnover in its two decades in the UK.
Carrefour S.A. (Carrefour) is a French based international retailer, operating a network of hypermarkets,
supermarkets, convenience stores, and cash and carry stores. The Group will invest €2.8 billion over five years, six
times more than the investments currently made to change the dimensions in its digital and Omni channel.
Carrefour's aim is to become a key player in food e-commerce, with € 5 billion in revenue for the Group and a food e-
commerce market share of over 20% in France by 2022.
Established in 1977, Ludendo SA is one of Europe’s largest toy retailers. The company provides a range of toys, games,
and leisure products for children of all ages. In September 2012 Groupe Ludendo, bought Hamleys for a reported
£60m (approx. $78.8m). In May 2019, Indian retail company, Reliance Retail, announced that it has acquired Hamleys
for £67.96m (approx. $ 89m) in an all-cash deal.
Smyths Toys is an Irish multinational chain provider of children's toys and entertainment products and has a strong
presence in Europe. Group revenues for 2019 are on course to be close to €1.4bn. The company only entered the UK
market in 2007 and its business has grown exponentially since and in 2018 the company opened a further six outlets.
According to Smyth Toys, Brexit could potentially impact adversely on its group supply chains due to changes in tariffs
and customs arrangements.
El Corte Inglés, S.A. is a Spanish conglomerate group. It mainly operates as a chain of department stores in Spain and
Portugal through the El Corte Ingles brand. It is the biggest department store group in Europe and ranks third
worldwide. The store's goods, including many of its own labels, are now being sent all over the world, to shoppers'
homes or other department stores working in partnership. This allows it to compete with Amazon. 2018 was a tough
year for the retailer, it had to refinance a debt which ascends up to EUR3.65bn; letting former Prime Minister of Qatar
take a stake in the company, the first shareholder that comes from outside the familiar nucleus. The debt-riddled
Spanish retailer posted turnover of EUR15.9 billion ($18 billion) last year, with consolidated net profits of EUR202
million, a 25% increase over the previous year.
7.2. What strategies do the leading players follow?

Industry Profiles
Players use a variety of strategies to continue thriving in the market and many retailers are entering the toy and
games market to gain market share. For example, one rising distribution channel, particularly in the European market
in recent years, has been supermarket and hypermarket retailers, who, because of their bulk buying power are able to
capture an increasingly large section of the market that requires more budget items. This channel accounted for over
15% of sales in this market in 2018. Also contributing to this rise is a shift in retail attitudes, which allows
supermarkets to be considered by the consumer for toys and games where previously the company would be mainly
synonymous with food and grocery products. Consumers are now able to shop for toys whilst buying their groceries
and household items. This can be enticing especially as there is no need for consumers to go to specialist retailers
because they are able to do their entire shopping under one roof. Carrefour has used this to its advantage and has
become the ‘go to’ for an array of products especially toys and games.
Carrefour group operates 12,300 stores in more than 30 countries and has a strong international presence. In January
2018, Carrefour agreed to acquire a 17% stake in online fashion retailer Showroomprive.com for EUR79 million from
furniture chain Conforama. According to the chief executive of Carrefour Alexandre Bompard “This partnership is a
new step in the acceleration of our digital strategy, in an omni-channel approach”. The Company has been keen to
increase its digital presence as it is facing increased competition from online retailers.
7.3. Has there been any recent MA activity?

In 2018, Spanish department store chain El Corte Inglés entered into a cooperation agreement with Chinese online
giant Alibaba. The partnership covers e-commerce, physical retail, cloud services and payment systems. El Corte Inglés
will open digital flagship stores on Alibaba platforms such as Tmall Global and AliExpress to reach a worldwide
audience with its Spanish products. Moreover, El Corte Ingles has also signed a cooperation agreement with AliPay to
allow Chinese shoppers to conveniently shop at its stores in Spain in their own currency using their mobile phone. This
strategy will allow the company to increase its consumer base and reach an online market which the company has not
yet fully established its position in. Using Alibaba’s platform will enable El Corte Inglés to directly compete with online
giants such as Amazon.
El Corte Ingles also launched Click & Express, an instant order service that delivers products within two hours. This
provides the company with a competitive advantage over Amazon. El Corte Ingles is able to deliver so fast because its
stores including its supermarket and fashion chains are increasingly functioning as warehouses.
7.4. How have online retailers affected traditional bricks and mortar
toy stores?
In September 2017 the US-based parent company of Toys R Us announced that it had entered into bankruptcy
protection proceedings and planned to close more than 10% of its US stores and a quarter of its UK stores. During
2018, the company had closed all of its stores in the UK and the US. Hamleys, Woolworths and Hawkins Bazaar all
suffered from the onslaught of internet shopping, plus the discounters and supermarkets before them, but Toys R Us
didn't learn from their example. When it comes to toys, brand loyalty is to the manufacturer however, it doesn't
matter who you buy from. This makes the market on and offline fiercely price-competitive.
The Smyths toy chain agreed to buy Toys R Us stores in Germany, Switzerland, and Austria for $96.7m. It already has
90 stores across Britain and Northern Ireland, as well as 21 shops in the Republic of Ireland where it is based, but this
will mark its first foray into mainland Europe. In October 2019, it was announced that profits at Smyths Toys soared to
more than EUR35 million last year as a result of very strong performance by the toy retailer’s European operations.
The company has been on a steady upwards trajectory across the UK and Ireland. Its European operations felt a boost
following its purchase of 93 Toys R Us. The retailer now operates over 110 stores across Ireland, the UK and Europe.
Its European network contributed EUR339 million in sales and EUR13.7 million in profits within seven months.
Moreover, companies such as Amazon have made billions in profit by utilizing the power of the internet and have
shifted consumer shopping habits away from physical stores and onto the internet. Toys R Us ultimately failed

Industry Profiles
because it lagged behind more dynamic companies. Amazon’s two-day free shipping and a widespread availability of
products has seen the online retailers cut into the market share of traditional toy retailers.
Other toy stores are in danger of following the same fate if consumer habits continue to change. Companies that are
unable to compete with the likes of Amazon in terms of price will likely lose their customers. For example, in May
2018, specialist in games and toys La Grande Récré’s parent company, Ludendo, announced the closure of 53
integrated, unprofitable La Grande Récré stores. The company, which generated EUR460m (approx. $510m) in sales
for the year ending February 2017, has kept 109 stores open from a total of around 250. Moreover, a disappointing
Christmas season saw the company sales down 5.6%. Ludendo, has had a series of expensive acquisitions in recent
years, including that of the British Hamleys which it bought for £60m (approx. $78.8m) back in 2012, which was then
resold. Ludendo, which was finally released by its creditors, was struggling under a debt of EUR105m, a situation that
forced the company’s owner, Jean-Michel Grunberg, to announce the search for a new investor in late 2017.
Similarly, in June 2019, Carrefour, the second-largest retailer worldwide sold 80% of the share of its Chinese stores to
Suning International, part of the Suning Group. The retailer was once known for being China’s largest and fastest
growing foreign retail stores. However, with China’s increased digitalization Carrefour, has failed to adapt with the
changing consumer and market behavior which led to its exit in one of the world’s largest e-commerce markets.

Industry Profiles
8. Company Profiles
8.1. Amazon.com, Inc.
8.1.1. Company Overview
Amazon.com, Inc. (Amazon or 'the company') is a retailer that offers its products through online and physical stores.
The company offers a range of merchandise, including books, apparel, electronics, home and garden tools, toys and
baby games, sports and outdoor products, automotive and industrial products and other general merchandise
products. It also provides services that includes web services, order fulfillment, publishing, advertising and co-branded
credit cards services. The company manufactures and sells electronic devices, including Kindle e-readers, Fire tablets,
Fire televisions (TVs) and Echo. Amazon markets its products through its website, www.amazon.com. Amazon also
operates through various international websites. It has business presence across North America, Europe and Asia-
Pacific. The company is headquartered in Seattle, Washington, the US.
The company reported revenues of (US Dollars) US$232,887 million for the fiscal year ended December 2018
(FY2018), an increase of 30.9% over FY2017. In FY2018, the company’s operating margin was 5.3%, compared to an
operating margin of 2.3% in FY2017. In FY2018, the company recorded a net margin of 4.3%, compared to a net
margin of 1.7% in FY2017.The company reported revenues of US$63,404.0 million for the second quarter ended June
2019, an increase of 6.2% over the previous quarter.
8.1.2. Key Facts
Table 5: Amazon.com, Inc.: key facts
Head office: 410 Terry Avenue NorthSeattle, Washington, United States

Number of Employees: 647500
Website: www.amazon.com
Financial year-end: December
Ticker: AMZN
Stock exchange: NASDAQ
SOURCE: COMPANY WEBSITE MARKETLINE
8.1.3. Business Description
Amazon.com, Inc. (Amazon or 'the company') is an online retailer. The company offers a range of products and
services through its physical stores and e-commerce site, amazon.com. . The company offers a range of merchandise,
including books, apparel, home and garden tools, toys and baby games, sports and outdoor products, automotive and
industrial products and other general merchandise products. It also sells electronic devices, such as Fire tablets, Kindle
e-readers, Echo devices and Fire TVs. Moreover, it offers a membership program called Amazon Prime, which provides
customers unlimited free shipping option on over 100 million items, access to unlimited streaming of thousands of
movies and TV episodes, and other benefits. The company also provides advertising services and order fulfillment
services to its consumers.
The company operates through three business segments: North America, International and Amazon Web Services
(AWS).
The North America segment focuses on retail sales of consumer products (including from sellers) and handles
subscriptions through North America-focused online and physical stores. This segment also includes export sales

Industry Profiles
generated from the online stores. In FY2018, the North America segment reported revenue of US$141,366million,
which accounted for 60.7% of the company's revenue.
The International segment includes the retail sales of consumer products (including from sellers) and subscriptions
from internationally focused online stores. This segment also includes export sales from international online stores
(including export sales from their respective sites to customers in the US, Canada and Mexico), but excludes export
sales from North American online stores. In FY2018, the International segment reported revenue of US$65,866
million, which accounted for 28.3% of the company's revenue.
The Amazon Web Services (AWS) segment includes global sales of compute, storage, database, and other AWS service
offerings for start-ups, enterprises, government agencies, and academic institutions. In FY2018, the AWS segment
reported revenue of US$25,655 million, which accounted for 11% of the company's revenue.
Amazon serves four primary customer sets: consumers, sellers, developers and enterprises, and content creators. The
company also develops and produces media content. Amazon fulfills customer orders through its fulfillment centers
and delivery networks that it operates in North America and other foreign countries; co-sourced and outsourced
arrangements in certain countries; and digital delivery. Amazon serves sellers by offering programs that enable them
to sell their products on their websites and also on Amazon's websites. The company earns fixed fees, per-unit activity
fees and interest on such transactions. The company serves developers and enterprises through AWS, which provides
a broad set of global compute, storage, database, and other service offerings. Amazon serves content creators such as
authors and independent publishers through Kindle Direct Publishing, an online platform that allows independent
authors and publishers to select a royalty option and make their books available in the Kindle Store. The company also
offers its own publishing arm, Amazon Publishing. It also offers programs that allow authors, musicians, filmmakers,
application developers, and others to publish and sell content.
Geographically, the company classifies its operations into five regions: the US, Germany, Japan, the UK, and Rest of
the World. In FY2018, the US accounted for 68.8% of the company's revenue, followed by Germany (8.5%), the UK
(6.2%), Japan (5.9%), and Rest of the World (10.5%).

Industry Profiles
Table 6: Amazon.com, Inc.: Annual Financial Ratios
Key Ratios 2015 2016 2017 2018 2019

Growth Ratios
Sales Growth % 20.25 27.08 30.80 30.93 20.45
Operating Income Growth % 1154.49 87.46 -1.91 202.51 17.07
EBITDA Growth % 585.52 81.76 -0.02 188.37 17.14
Net Income Growth % 297.82 27.92 232.11 15.04
EPS Growth % 292.06 -7.08 335.70 15.93
Working Capital Growth % -43.85 8.09 17.76 189.97 27.00
Equity Ratios
EPS (Earnings per Share) USD 1.25 4.90 4.55 19.83 22.99
Book Value per Share USD 28.42 40.43 57.25 88.69 124.62
Profitability Ratios
Gross Margin % 33.04 35.09 37.07 40.25 40.99
Operating Margin % 2.09 3.08 2.31 5.33 5.18
Net Profit Margin % 0.56 1.74 1.71 4.33 4.13
Profit Markup % 49.34 54.07 58.90 67.36 69.46
PBT Margin (Profit Before Tax) % 1.47 2.86 2.14 4.84 4.98
Return on Equity % 4.45 12.29 10.95 23.13 18.67
Return on Capital Employed % 7.24 10.57 5.59 13.18 10.58
Return on Assets % 1.00 3.20 2.83 6.85 5.97
Return on Working Capital % 122.83 213.03 177.44 185.11 170.63
Operating Costs (% of Sales) % 97.91 96.92 97.69 94.67 94.82
Administration Costs (% of Sales) % 19.07 20.06 21.92 22.40 22.93
Liquidity Ratios
Current Ratio Absolute 1.05 1.04 1.04 1.10 1.10
Quick Ratio Absolute 0.75 0.78 0.76 0.85 0.86
Cash Ratio Absolute 0.58 0.59 0.54 0.60 0.63
Leverage Ratios
Debt to Equity Ratio Absolute 1.06 1.06 1.59 1.13 0.83
Net Debt to Equity Absolute -0.13 0.06 0.85 0.40 0.25
Debt to Capital Ratio Absolute 0.51 0.51 0.61 0.53 0.45
Efficiency Ratios
Asset Turnover Absolute 1.79 1.84 1.66 1.58 1.45
Fixed Asset Turnover Absolute 5.52 5.34 4.56 4.21 3.51
Inventory Turnover Absolute 7.73 8.13 8.14 8.38 8.79
Current Asset Turnover Absolute 3.19 3.34 3.36 3.44 3.27
Capital Employed Turnover Absolute 3.47 3.44 2.42 2.47 2.04
Working Capital Turnover Absolute 58.86 69.20 76.87 34.71 32.92
SOURCE: COMPANY FILINGS MARKETLINE

Industry Profiles
Table 7: Amazon.com, Inc.: Key Employees
Name Job Title Board

Andrew R. Jassy Chief Executive Officer Amazon Web Services Senior Management
Brian T. Olsavsky Chief Financial Officer Senior Management
Brian T. Olsavsky Senior Vice President Senior Management
Daniel P. Huttenlocher Director Non Executive Board
David A. Zapolsky General Counsel Senior Management
David A. Zapolsky Secretary Senior Management
David A. Zapolsky Senior Vice President Senior Management
Indra Nooyi Director Non Executive Board
Jamie S. Gorelick Director Non Executive Board
Jeffrey A. Wilke Chief Executive Officer Worldwide Consumer Senior Management
Jeffrey M. Blackburn Senior Vice President Business Development Senior Management
Jeffrey P. Bezos Chairman Executive Board
Jeffrey P. Bezos Chief Executive Officer Executive Board
Jeffrey P. Bezos President Executive Board
Jonathan J. Rubinstein Director Non Executive Board
Judith A. McGrath Director Non Executive Board
Patricia Q. Stonesifer Director Non Executive Board
Rosalind G. Brewer Director Non Executive Board
Business Development Executive, EMEA-
Sahar Baghery Senior Management
Amazon Prime Video
Sameer Batra Director Mobile Business Development Senior Management
Shelley L. Reynolds Controller Senior Management
Shelley L. Reynolds Principal Accounting Officer Senior Management
Shelley L. Reynolds Vice President Senior Management
Thomas O. Ryder Director Non Executive Board
Tom A. Alberg Director Non Executive Board
Wendell P. Weeks Director Non Executive Board

Industry Profiles
8.2. Carrefour SA
Carrefour SA (Carrefour) is one of the largest global consumer goods retailers. The company operates multi-format
and omnichannel retail platforms. It operates through a network of hypermarkets, supermarkets, convenience stores,
and cash and carry stores across the world. Carrefour also retails merchandise through various e-commerce website
Carrefour.fr. The company provides an extensive portfolio of food and non-food products, including fresh, produces,
local specialties, consumer goods, clothing, consumer electronics, home furnishing goods, cultural goods. Carrefour
also offers various services such as ticket booking, floral service, home delivery, photo printing and track rental
services. The company’s operations spread across Europe, Latin America, and Asia. Carrefour is headquartered in
Boulogne-Billancourt, France.
The company reported revenues of (Euro) EUR77,917 million for the fiscal year ended December 2018 (FY2018), a
decrease of 3.8% over FY2017. In FY2018, the company’s operating margin was 1%, compared to an operating margin
of 0.9% in FY2017. The net loss of the company was EUR560 million in FY2018, compared to a net loss of EUR531
million in FY2017.
8.2.2. Key Facts
Table 8: Carrefour SA: key facts
Head office: 93 avenue de Paris, Massy, Picardie, France

Telephone: 33141042600
Fax: 33155633901
Website: www.carrefour.com
Financial year-end: December
Ticker: CA
Stock exchange: Euronext Paris
8.2.3. Business Description
Carrefour SA (Carrefour) operates a network of hypermarkets, supermarkets, convenience stores, and cash and carry
stores. It retails products through drive-in-points and online at Carrefour.fr. The company, through its stores, offers a
variety of fresh produce, locally sourced products, fast-moving consumer goods, essential non-food products, and
retail services. Carrefour sources its fresh produces directly from farmers, breeders, and producers. Under the local
products, the company offers products that are sourced from the country in which they are sold. Under the fast-
moving consumer goods, it offers daily use products such as grocery, liquid and hygiene/beauty. The company’s non-
food product includes household goods and general merchandise, apparel, and home appliances. Under the retail
services, the company offers a variety of value-added services ranging from financing solutions and entertainment to
pharmacy products and petrol. It offers ticket booking, photo printing, floral service, and truck rental services.
Carrefour also offers its customers finance, savings, and insurance services through over 1,000 agencies. These
agencies provide payment card and extended warranties. Carrefour also created Market Pay, an authorized payment
institution. It is also involved in the business of property management.
The company operates stores under four formats: Hypermarkets, Supermarkets, Convenience stores, Cash and carry
stores.

Industry Profiles
Under the hypermarkets' format, Carrefour operates 1,384 stores including 452 stores in the Rest of Europe, 372
stores in Asia, 189 in Latin America, 247 stores in France, and 124 stores in other countries. These stores are
established within the sales area of 2,400 sq. m. to 23,000 sq. m., under the Carrefour banner. These hypermarkets
offer 20,000 to 80,000 products and involved in offering both food and non-food products such as groceries,
tableware, home decor products, consumer goods, gourmet foods, clothing, electronic goods, decorative products,
and cultural goods.
The company operates 3,319 supermarkets under the Market, Bairro and Supeco banners, which cover a retail space
of 1,000 to 3,500 sq. m. It operates 1,776 stores in the rest of Europe, 1,056 supermarkets in France, 147 in Latin
America, 267 stores in other countries and 73 stores in Asia. These supermarkets offer a wide range of fresh produce,
local products, and non-food categories.
Under the convenience store format the company operates 7,029 stores including 3,918 in France, 2,511 in the rest of
Europe, 516 in Latin America, 29 in Asia and 55 in other countries., under Carrefour city, Carrefour contact, Carrefour
express, Carrefour Bio, Carrefour Easy, 8 à Huit, Proxi and Carrefour Montagne banners, which cover a retail space of
60 sq. m. to 900 sq. m. These stores meet the daily needs ranging from budget meals to everyday essentials besides
providing home delivery services.
The cash and carry formatted stores offer a broad selection of food and non-food products at wholesale prices, along
with a package of customized services to restaurants and shop owners. It operates 379 cash and carry retail outlets
including 173 in Latin America, 144 in France, 49 in the rest of Europe and 13 in other countries.
The company also sells food and non-food products through various e-commerce websites including carrefour.fr,
carrefour.eu, carrefour.cn, carrefour.com.tw, carrefour.es, and ooshop.com. It develops e-commerce and m-
commerce solutions to enable its customers to shop anytime and anywhere, from a laptop computer and a
smartphone. Carrefour offers home-delivery services. It also offers multiple collection options to the customers
including ordering the products online and collecting the products in-store.
Geographically, the company classified its business operations into four segments: France, Rest of Europe, Latin
America and Asia.
As of December 2018, the company operated 12,111 stores of which 5,365 stores in France, 4,788 in Rest of Europe,
1,025 in Latin America, 474 in Asia and 459 in other countries with a total sales area of 17.6 million sq. m., across
France, Belgium, Spain, Italy, Taiwan, Poland, Romania, Argentina, Brazil and China. It also has partnerships in several
other countries.

Industry Profiles
Table 9: Carrefour SA: Annual Financial Ratios
Key Ratios 2014 2015 2016 2017 2018

Growth Ratios
Sales Growth % 3.33 -0.11 2.79 -3.78
Operating Income Growth % -13.22 -12.95 -63.97 8.29
EBITDA Growth % -6.45 -7.33 -34.29 -0.58
Net Income Growth % -21.52 -23.96 -171.18
EPS Growth % 1.63 -9.70 -55.34 9.03
Working Capital Growth % -9.05 18.80 -28.40 5.50
Equity Ratios
EPS (Earnings per Share) EUR 1.67 1.35 1.06 -0.70 -0.34
Dividend per Share EUR 0.68 0.70 0.70 0.46 0.46
Dividend Cover Absolute 2.46 1.93 1.52 -1.52 -0.73
Book Value per Share EUR 12.92 13.24 13.96 13.19 11.76
Profitability Ratios
Gross Margin % 22.34 22.85 22.83 22.49 21.90
Operating Margin % 3.37 2.83 2.47 0.86 0.97
Net Profit Margin % 1.64 1.24 0.95 -0.66 -0.72
Profit Markup % 28.76 29.62 29.59 29.02 28.05
PBT Margin (Profit Before Tax) % 2.63 2.18 1.81 0.31 0.64
Return on Equity % 13.60 10.18 7.16 -5.28 -6.11
Return on Capital Employed % 11.31 9.80 8.18 2.83 3.13
Return on Assets % 5.46 2.16 1.59 -1.10 -1.18
Return on Working Capital % -46.73 -44.59 -32.67 -16.44
Operating Costs (% of Sales) % 96.63 97.17 97.53 99.14 99.03
Administration Costs (% of Sales) % 17.40 17.89 17.96 18.08 17.54
Liquidity Ratios
Current Ratio Absolute 0.76 0.78 0.76 0.82 0.81
Quick Ratio Absolute 0.49 0.49 0.48 0.53 0.54
Cash Ratio Absolute 0.16 0.14 0.14 0.16 0.19
Leverage Ratios
Debt to Equity Ratio Absolute 1.11 0.99 0.96 1.01 1.11
Net Debt to Equity Absolute 1.17 1.05 0.97 0.93 1.04
Debt to Capital Ratio Absolute 0.53 0.50 0.49 0.50 0.53
Efficiency Ratios
Asset Turnover Absolute 3.33 1.74 1.68 1.68 1.64
Fixed Asset Turnover Absolute 12.44 6.48 6.18 6.11 6.06
Inventory Turnover Absolute 19.08 9.68 9.07 9.14 9.49
Current Asset Turnover Absolute 8.70 4.52 4.32 4.27 4.16
Capital Employed Turnover Absolute 3.36 3.46 3.32 3.27 3.22

Industry Profiles
Table 10: Carrefour SA: Key Employees

Abilio Diniz Director Non Executive Board
Alexandre Bompard Chairman Executive Board
Alexandre Bompard Chief Executive Officer Executive Board
Director Customers, Services and Digital
Amelie Oudea-Castera Senior Management
Transformation, E Commerce, and Data
Aurore Domont Director Non Executive Board
Charles Edelstenne Director Non Executive Board
Director Customers, Services and Digital
Claudia Almeida e Silva Senior Management
Transformation
Director Communication for the Group and
Dominique Benneteau-Wood Senior Management
France
Flavia Buarque de Almeida Director Non Executive Board
Francois Melchior de Polignac Director Merchandise, Supply and Formats Senior Management
Frederic Haffner Director Strategy and MandA Senior Management
Gerard Lavinay Director Italy Senior Management
Director Northern and Eastern Europe
Guillaume de Colonges Senior Management
(Belgium, Poland and Romania)
Director Assets, International Development
Jacques Ehrmann Senior Management
and Innovation
Jean-Laurent Bonnafe Director Non Executive Board
Director Human Resources for the Group and
Jerome Nanty Senior Management
France.
Lan Yan Director Non Executive Board
Laurent Vallee Secretary Senior Management
Director Financial Services and Hypermarkets
Marie Cheval Senior Management
France
Marie-Laure Sauty de Chalon Director Non Executive Board
Martine Saint Cricq Director Non Executive Board
Mathilde Lemoine Director Non Executive Board
Matthieu Malige Chief Financial Officer Senior Management
Nicolas Bazire Director Non Executive Board
Noel Prioux Director Latin America (Brazil and Argentina) Senior Management
Pascal Clouzard Director France Senior Management
Patricia Moulin Lemoine Director Non Executive Board
Philippe Houze Director Non Executive Board
Rami Baitieh Director Spain Senior Management
Stephane Courbit Director Non Executive Board

Industry Profiles
Table 11: Carrefour SA: Key Employees Continued

Stephane Israel Director Non Executive Board
Thierry Breton Director Non Executive Board
Thierry Faraut Director Non Executive Board
Thierry Garnier Director Asia (China and Taiwan) Senior Management

Industry Profiles
8.3. El Corte Ingles, SA
El Corte Ingles, SA (El Corte) operates multi format retail stores. The company’s product portfolio includes fashion
apparel, sporting goods, accessories, cultural products, electronics, household goods and food items among others. El
Corte also manages Hipercor hypermarket chain offering a broad selection of national, international and regional
products including food, toiletries, textiles and household goods. It also operates Supercor, bannered convenience
store chains. El Corte is headquartered in Madrid, Spain.
8.3.2. Key Facts
Table 12: El Corte Ingles, SA: key facts

Website: www.elcorteingles.es
Financial year-end: April

Industry Profiles
Table 13: El Corte Ingles, SA: Key Employees

Carlos Martinez Echavarria Director Non Executive Board
Carlota Areces Galan Director Non Executive Board
Cristina Alvarez Guil Director Non Executive Board
D. Florencio Lasaga Munarriz Director Non Executive Board
Fernando Becker Zuazua Director Non Executive Board
Jesus Nuno De La Rosa Chairman Executive Board
Manuel Pizarro Moreno Director Non Executive Board
Marta Alvarez Guil Director Non Executive Board
Paloma Garcia Pena Director Non Executive Board
Shahzad Shahbaz Director Non Executive Board
Victor Del Pozo Gil Chief Executive Officer Executive Board
Victor Del Pozo Gil Director Executive Board

Industry Profiles
8.4. Smyths Toys Ltd
Smyths Toys Ltd (Smyths Toys) is a provider of baby products. The company’s product portfolio includes toys, video
games, outdoor, baby, and pre-school products. It also offers drones and flying toys, arts, music and partyware,
feeding, jumpers and walkers, go karts, pedal cars, sports tables, smart watches, PC accessories and other sports
equipment. Smyths Toys markets its products through retail stores and online. It has operational presence across
Ireland, Germany, Austria and Switzerland. Smyths Toys is headquartered in Londonderry, England, the UK.
8.4.2. Key Facts
Table 14: Smyths Toys Ltd: key facts
Unit 2 Unit 3 and 4, Lesley Retail Park, Strand Road, Londonderry, England, United
Head office:
Kingdom
Website: www.smythstoys.com
Financial year-end: April

Industry Profiles
Table 15: Smyths Toys Ltd: Key Employees

Tony Smyth Director Senior Management

Industry Profiles
9. Macroeconomic Indicators
9.1. Country data
Table 16: Europe size of population (million), 2014–18
Year Population (million) % Growth

2014 318.9 0.8%
2015 321.4 0.8%
2016 323.8 0.8%
2017 326.3 0.8%
2018 328.9 0.8%
Table 17: Europe gdp (constant 2005 prices, $ billion), 2014–18
Year Constant 2005 Prices, $ billion % Growth

2014 14,799.6 2.4%
2015 15,276.3 3.2%
2016 15,739.0 3.0%
2017 16,161.3 2.7%
2018 16,559.0 2.5%
Table 18: Europe gdp (current prices, $ billion), 2014–18
Year Current Prices, $ billion % Growth

2014 17,420.2 3.9%
2015 18,313.5 5.1%
2016 19,223.8 5.0%
2017 20,145.1 4.8%
2018 21,077.3 4.6%
Table 19: Europe inflation, 2014–18

Industry Profiles
Year Inflation Rate (%)

2014 1.8%
2015 2.0%
2016 2.1%
2017 2.3%
2018 2.3%
Table 20: Europe consumer price index (absolute), 2014–18
Year Consumer Price Index (2005 = 100)

2014 121.5
2015 123.9
2016 126.4
2017 129.3
2018 132.2
Table 21: Europe exchange rate, 2014–18
Year Exchange rate ($/€)

2014 0.7535
2015 0.9013
2016 0.9040
2017 0.8855
2018 0.8475

Industry Profiles
Appendix
Methodology
MarketLine Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, cross-
checked and presented in a consistent and accessible style.
Review of in-house databases – Created using 250,000+ industry interviews and consumer surveys and supported by
analysis from industry experts using highly complex modeling & forecasting tools, MarketLine’s in-house databases
provide the foundation for all related industry profiles
Preparatory research – We also maintain extensive in-house databases of news, analyst commentary, company
profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market
overview
Definitions – Market definitions are standardized to allow comparison from country to country. The parameters of
each definition are carefully reviewed at the start of the research process to ensure they match the requirements of
both the market and our clients
Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and
trends
MarketLine aggregates and analyzes a number of secondary information sources, including:
- National/Governmental statistics
- International data (official international sources)
- National and International trade associations
- Broker and analyst reports
- Company Annual Reports
- Business information libraries and databases
Modeling & forecasting tools – MarketLine has developed powerful tools that allow quantitative and qualitative data
to be combined with related macroeconomic and demographic drivers to create market models and forecasts, which
can then be refined according to specific competitive, regulatory and demand-related factors
Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date

Industry Profiles
9.2. Industry associations
9.2.1. Toy Industries of Europe (TIE)
Rue des Deux Eglises, 20, 1000 Brussels, BEL

Tel.: 32 2 227 53 01
Fax: 32 2 250 00 19
www.tietoy.org
9.2.2. Federation Française des Industries du Jouet-Puériculture
4 Rue de Castellane, 75008 Paris, FRA

Tel.: 33 1 5343 0910
Fax: 33 1 4006 9305
www.fjp.fr
9.2.3. Deutscher Verband der Spielwaren-Industrie e.V. (DVSI)
Heinestr. 169, 70597 Stuttgart, DEU

Tel.: 49 0711 976580
Fax: 49 0711 9765830
www.toy.de
9.2.4. International Council of Toy Industries
1115 Broadway, 4th Floor, New York NY 10010, USA

Tel.: 1 212 675 1141
www.toy-icti.org
9.2.5. British Toy and Hobby Association
80 Camberwell Road, London, SE5 0EG, GBR

Tel.: 44 20 7701 7271
Fax: 44 20 7708 2437
www.btha.co.uk
9.3. Related MarketLine research

Industry Profiles
9.3.1. Industry Profile

Toys & Games in Asia-Pacific
Global Toys & Games
Toys & Games in the United Kingdom
Toys & Games in France

Industry Profiles
About MarketLine
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you can absorb key facts in minutes, not hours.
What we do
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MarketLine Industry Profile

Toys & Games in Europe

Reference Code: 0201-0778

Publication Date: January 2020

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 1

1.1. Market value

1.2. Market value forecast

1.3. Geography segmentation

1.4. Market rivalry

1.5. Competitive Landscape

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 2

1.1. Market value ................................................................................................................................. 2

1.2. Market value forecast ...................................................................................................................2

1.3. Geography segmentation .............................................................................................................2

1.4. Market rivalry ................................................................................................................................ 2

1.5. Competitive Landscape ................................................................................................................2

2.1. Market definition ........................................................................................................................... 7

2.2. Market analysis ............................................................................................................................ 7

3.1. Market value ................................................................................................................................. 9

4.1. Geography segmentation ...........................................................................................................10

4.2. Market distribution ......................................................................................................................11

5.1. Market value forecast .................................................................................................................12

6. Five Forces Analysis 13

6.1. Summary .................................................................................................................................... 13

6.2. Buyer power ............................................................................................................................... 15

6.3. Supplier power ........................................................................................................................... 16

6.4. New entrants .............................................................................................................................. 18

6.5. Threat of substitutes ...................................................................................................................20

6.6. Degree of rivalry .........................................................................................................................21

7.1. Who are the leading players?.....................................................................................................23

7.2. What strategies do the leading players follow? ..........................................................................23

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 3

7.3. Has there been any recent MA activity?.....................................................................................24

8.1. Amazon.com, Inc........................................................................................................................26

8.2. Carrefour SA .............................................................................................................................. 30

8.3. El Corte Ingles, SA .....................................................................................................................35

8.4. Smyths Toys Ltd.........................................................................................................................37

9.1. Country data ............................................................................................................................... 39

9.2. Industry associations ..................................................................................................................42

9.3. Related MarketLine research .....................................................................................................42

About MarketLine .................................................................................................................................... 44

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 4

Table 5: Amazon.com, Inc.: key facts 26

Table 6: Amazon.com, Inc.: Annual Financial Ratios 28

Table 7: Amazon.com, Inc.: Key Employees 29

Table 8: Carrefour SA: key facts 30

Table 9: Carrefour SA: Annual Financial Ratios 32

Table 10: Carrefour SA: Key Employees 33

Table 11: Carrefour SA: Key Employees Continued 34

Table 12: El Corte Ingles, SA: key facts 35

Table 13: El Corte Ingles, SA: Key Employees 36

Table 14: Smyths Toys Ltd: key facts 37

Table 15: Smyths Toys Ltd: Key Employees 38

Table 16: Europe size of population (million), 2014–18 39

Table 17: Europe gdp (constant 2005 prices, $ billion), 2014–18 39

Table 18: Europe gdp (current prices, $ billion), 2014–18 39

Table 19: Europe inflation, 2014–18 39

Table 20: Europe consumer price index (absolute), 2014–18 40

Table 21: Europe exchange rate, 2014–18 40

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 5

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 6

2.1. Market definition

2.2. Market analysis