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Counterfeit concerns cloud Shein and Temu’s rapid growth in the toy market

The global toy market, a $108.7 billion industry in 2023 (Circana), is witnessing a significant shift. Fast-growing e-commerce platforms Shein and Temu, known for their ultra-low prices and vast selection of primarily unbranded goods, are aggressively expanding into the toy sector, capitalizing on the lucrative holiday shopping season.

While established giants like Amazon, Walmart, and Target remain dominant (holding nearly 70% of the US market, according to D.A. Davidson analyst Linda Bolton Weiser), Shein and Temu are rapidly gaining traction, particularly among budget-conscious consumers.

Shein and Temu’s growing market share

Shein, renowned for its inexpensive apparel, reports double-digit year-over-year growth in toy sales volume.

Meanwhile, Temu is experiencing a surge in toy-related searches.

Kantar data reveals that 13% of US holiday shoppers plan to purchase gifts from Temu this year, a substantial increase from 9% in 2023.

Further supporting this trend, Facteus data shows a rise in US credit card spending on both platforms this month compared to last year.

The influx of shoppers to these platforms is even influencing major toy manufacturers.

MGA Entertainment, the creator of L.O.L. Surprise! dolls, is considering selling its products on Shein and Temu to reach a broader consumer base, as CEO Isaac Larian told Reuters, “We want to reach (all levels) of consumers, not just the people with average incomes.”

This decision highlights the growing appeal of these platforms to budget-conscious shoppers, particularly those earning less than $50,000 annually, a demographic significantly impacted by rising consumer prices since 2021, according to Bank of America credit card data.

European markets show a similar trend, particularly among 18-to-34-year-olds in France, Germany, Italy, Spain, and the UK, with 39% having purchased toys or games on these platforms since the start of 2024, and that number rising to 60% among younger consumers, according to a September study by Circana.

The counterfeit controversy

However, the rapid growth of Shein and Temu in the toy sector hasn’t been without controversy.

Concerns over counterfeit and unauthorized products are prominent.

Mattel, the maker of Barbie, confirmed it does not directly sell to these platforms and its distributors are not authorized to do so, as reported by Reuters.

Yet, listings of Mattel’s Uno cards on Temu and Hot Wheels cars on Shein included claims of authenticity, raising questions about intellectual property rights and product legitimacy.

Responding to these concerns, a Shein spokesperson told Reuters that suppliers are required to certify product authenticity and non-infringement, with a dedicated team ensuring compliance.

Temu, after receiving inquiries regarding the unauthorized Uno listings, promptly removed the products and launched an investigation, stating this is part of their “standard operating procedure for dealing with products suspected of non-compliance or subject of a complaint.”

Addressing concerns

Despite the opportunities, concerns remain regarding counterfeit products, particularly “dupes,” or imitation products.

MGA Entertainment’s CEO, Isaac Larian, expressed concerns about counterfeit versions of its new Miniverse brand, highlighting the potential safety hazards posed by improperly labeled or unsafe imitations.

Spin Master has also voiced concerns about counterfeit versions of its “Ms Rachel” doll on Temu, highlighting the lack of safety testing for these knockoffs.

Temu responded that they investigated and removed these products upon notice from Spin Master.

Fat Brain Toys president Mark Carson remains hesitant, preferring to observe the situation before deciding to sell on these platforms.

The post Counterfeit concerns cloud Shein and Temu’s rapid growth in the toy market appeared first on Invezz

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